Key
Issues and Draft Recommendations
1.
Background
The
Government of Rajasthan has constituted a Committee to examine
the proposal to establish a State Competition and Regulatory Agency
(SCoRA) to regulate service sectors that largely remain either
unregulated of inadequately regulated. The first meeting of the
Committee was held on March 31, 2005. As outcome of the meeting,
it was decided to organise a workshop and consult representative
stakeholders.
The
workshop was jointly organised by CUTS, and the Department of
Food and Civil Supplies, Government of Rajasthan, at Harish Chandra
Mathur-Rajasthan Institute of Public Administration (HCM-RIPA),
Jaipur, Rajasthan, India, on April 30, 2005. Participants constituted
of representative stakeholders including consumer groups, service
providers, government officials, and media. Follows the outcome
of the workshop. Education, Health and Medical, Cable TV, and
Transport were identified for detailed group discussion.
General
Recommendations
The
State Competition and Regulatory Agency (SCoRA) should take up
systemic issues rather than addressing individual grievances in
the identified service sectors. This is needed for the reason
that in several sectors there are no standards to comply with
and monitoring mechanisms are not effective at all. By and large,
service providers are not competing with each other to perform
better and offer competitive prices to the consumers. Hence, regulation
is required.
The
Agency will not function only in a reactive manner, i.e. waiting
for consumer abuse to happen and then seeking/applying redress.
Instead, the proposed body would work proactively to raise industry’s
benchmarks vis-à-vis quality of service and consumer satisfaction.
This would be done through making service providers compete with
each other for better performance and greater consumer satisfaction.
Standards
for performance should be prescribed and service providers should
be rated and categorised based on conformity level with those
standards. The task of performance evaluation, rating, and categorising
can be outsourced to expert agencies of repute.
In
those sectors where regulatory agencies already exist, SCoRA will
proactively work to bring the systemic flaws to the notice of
the competent authority. In such case the role of SCoRA would
be that of a watchdog.
On
behalf of consumers, the Agency can file class-action petitions
before the appropriate authorities, including consumer courts,
or the electricity/telecom regulator, as and when required.
The
Committee will work in a time bound manner towards drafting the
legislation and establishing the proposed Agency soon.
1.
Education
Private
Schools
-
Once
a school is opened and gets accreditation, there is practically
no control over the way it charges fees, the quality of education
being offered, and anti-competitive practices such as tied
sale of book, dresses, and other things.
-
Though
there are several service providers (schools), the market
is not competitive. Almost all of them follow similar practices
to lure students (consumers).
-
The
proposed agency should provide a reliable criterion to rank
and categorise these institutions based on the quality of
education they offer, the value for money to consumers, overall
consumer satisfaction, and so on.
-
The
proposed Agency (SCoRA) should fix a ceiling on the fee that
a particular category of school could charge to students.
This will work as an incentive to the school administration
to improve its rating and jump to the upper category and become
eligible to charge higher fee.
-
The
Agency need not act upon individual complaints. However, it
would encourage students/parents to file a complaint in case
of non-compliance with rules and regulations. Complaints received
against a particular institution in last one year should be
looked into, while reviewing the rating. The review and rating
exercise should be done once in two years so that adequate
time is available for improvement.
-
Based
upon the performance of a particular school over the years,
the Agency should provide feedback to the authorities it has
got accreditation from (government, CBSE, Rajasthan Board,
etc). This will bring additional pressure on the institutions
to maintain the terms and conditions they had agreed upon
at the time of getting accreditation.
-
SCoRA
should also ensure that in each school minimum numbers of
seats are kept reserved for students from poor sections of
the society. They should be charged with a nominal fee. If
such a regulation does not exist, the Agency should frame
one.
Institutions
for Technical Education
-
National
Board of Accreditation (NBA) was constituted by the All India
Council for Technical Education (AICTE) as an autonomous body
under Section 10(u) of the AICTE Act, 1987, to periodically
conduct evaluation of technical institutions and/or programmes.
This signifies the need for having such an agency for other
sectors as well.
-
SCoRA
would coordinate with the NBA and act as a consumer advocate.
It would help NBA in conducting evaluation and categorisation
in the State.
-
NBA’
evaluation relies entirely on the information received from
the service provider only and does not count the feedback and
opinion of other stakeholders, including the students. Therefore,
it is proposed that the SCoRA would do the rating and categorisation
taking into account the performance of a particular institution
under NBA’s evaluation, and the feedback received from other
stakeholders as well.
-
The
state agency should also undertake intensive market research
and measure the compliance with agreed upon quality norms. The
feedback received should be shared with the NBA and other concerned
authorities, on a regular basis.
Coaching
Centres/ Computer Institutes
Presently,
the sector is entirely unregulated, without any mechanism to ensure
that these institutions actually deliver what they promise.
The
SCoRA should rate and categorise these institutions based on the
infrastructure and faculty they have, the value for money to students,
and other relevant criteria.
Presently,
there is no basis to charge fee. A ceiling should be imposed on
the fee to be charged by each category of institution.
So
often, many of such institutions publish misleading and tall claims
about their performance in the print media. The SCoRA should check
this practice as well.
2.
Health and Medical
Private
Hospitals and Nursing Homes
-
Presently,
private hospitals and nursing homes are almost unregulated.
There is no way by which minimum infrastructure and quality
standards could be ensured. Offering poor services and charging
irrationally is common.
-
The
associations of these service providers have never looked into
these issues, and since no accreditation is required to open
a private hospital, there is virtually no check on the quality
of services and their rates.
-
Several private hospitals are functioning in the state even
without having a basic infrastructure. An appropriate regulatory
body is required to check such practices and prescribe the standards
for performance.
-
SCoRA
should establish benchmarks and performance standards and categorise
service providers, based on their performance.
-
SCoRA
should keep a watch on the compliance and conformity with the
prescribed standards, and put a cap on the price that can be
charged for various services by a particular category of hospital,
which is based on the comparative rating.
-
Several
private institutions have got land allotted on a nominal price,
with a promise to treat a certain number of poor patients every
year at nominal rates or without any charge. However, in practice,
this has not been followed, by and large. SCoRA should ensure
compliance of such agreements.
-
The
sector is entirely unregulated and hardly any accreditation
is required to run a diagnostic clinic. There is no mechanism
to check and ensure that the machines being used for diagnosis
are accurate and calibrated regularly, the process for conducting
tests is properly followed, and the staff of the laboratory
is qualified and trained to perform the job.
-
Even
the district administration and/or medical officers are not
empowered to regulate their conduct and take appropriate action
when required.
-
It
is evident that most of the diagnostic clinics operate in collusion
with doctors. For each referral the doctor is paid a handsome
amount of commission, resulting into consumers (patients) being
charged excessively.
-
Despite
mushrooming of diagnostic clinics, hardly any competition exists
for quality of services being offered and rates being charged
to patients, which signifies a market failure.
-
To address thismalady, it should be made mandatory for these
labs to get registered with the SCoRA. The Agency should also
set the ‘standards for performance’, and based upon the degree
of compliance, the service providers should be rated and categorised.
-
Consumer
abuses by private travel operators are rampant in the entire
state. Consumer safety is being compromised heavily, particularly
in remote areas. Aged vehicles are running on roads and there
is no basis to charge the fare to passengers.
-
It is responsibility of the State Road Transport Department
to regulate the sector. Anyhow, it has not been able to do so
effectively. The SCoRA should work as a watchdog and take up
these issues with the concerned authorities.
-
Truck
operators’ unions often work as a cartel. They fix the freight
charges collectively and do not allow outsiders to operate.
As a result, users end up paying more. Thus, their behaviour
is un-competitive.
SCoRA
should ensure that the market works in a competitive manner. In
case of non-compliance, SCoRA should take up such matters with
the competent authorities and pursue them effectively till these
are resolved.
-
Though
the law provides for the state government to fix the cargo fares,
this has never been exercised. SCoRA should ensure that there
is some rationale for setting the fare.
4.
Cable TV
Considering
the size and nature of the cable TV market, the Telecom Regulatory
Authority of India (TRAI) has opined for regulating the sector
at the local level.
Following that, SCoRA should take up the task of regulating the
sector. After getting each operator registered, the Agency should
set the norms and benchmarks for each stage of business, so as
to ensure the consumers’ protection.
Based
on the criterion, such as quality of services, infrastructure,
manpower, and consumer satisfaction, these operators should be
ranked annually. In case there is no improvement in the relative
performance of a particular operator for consecutive two years,
the Agency should fineher/him.
-
SCoRA
should ensure that no operator (MSO/LSO) is able to abuse its
dominance in a given market. Wherever required, the Agency should
coordinate with the TRAI and the Competition Commission of India.
-
To
start with, the SCoRA can frame a code of conduct and a consumer
charter in consultation with the service providers, and make
them comply with these.
-
Tariff
should be capped, and any revision should be made by the Agency
as per the broad guidelines released by the TRAI. This should
be performed in a consultative manner, with an opportunity provided
to stakeholders to express their views.
-
Since
cable operators have a monopoly at the consumers’ end, the Agency
should monitor the compliance of standards by organising market
research periodically.
-
In case of violation of TRAI’s orders, the Agency should be
able to take up the matter with the Central regulator.
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