Auction not the only way for natural resources allocation: CCI

A panel headed by Chawla, a former finance secretary, had submitted its report on natural resources to the government last year.

Updated: Oct 21, 2012, 17:39 PM IST

New Delhi: Amid continuing debate over ways to award scarce natural resources, Competition Commission chief Ashok Chawla has said auction is not the only method for their allocation, but is a preferred way to ensure transparency.

A panel headed by Chawla, a former finance secretary, had submitted its report on natural resources to the government last year.

"Our committee has nowhere said that the auction is the only method for allocation, our general philosophy was, transparency (is) paramount at whatever you do. Whatever resource you allocate through whatever method, transparency cannot be compromised," Chawla said in an interview.

"...Auction is preferred mode for auction of natural resources but it cannot be and shouldn't be the only way of allocation because there are natural resources where the public policy considerations would be more prominent and strong than commercial," he noted.

Recently, the government had said that the Group of Ministers (GoM) and not the government, has accepted 69 recommendations of Ashok Chawla Committee on Allocation of Natural Resources.

Chawla is the chairman of the fair trade regulator Competition Commission of India (CCI), that keeps a tab on anti-competitive practices in the market. Among others, the Commission has slapped a penalty of over Rs 6,000 crore on 11 cement makers for alleged cartelisation.

According to Chawla, entities involved in cartelisation should be handed out "exemplary" punishment.

In response to a query on cartelisation, he said that once the evidence is adequate, then it is important and necessary that the punishment awarded is exemplary.

"Not all cartel activity can be captured by regulatory committee but where it gets noticed and there is punished then punishment needs to be exemplary so that's not just industry but various segments of business which are prone to cartelisation do not indulge in that activity freely," he noted.

PTI