Only a statutory regulator can depoliticise allocation of natural resources

Rule-based regulation becomes necessary when there are natural monopolies, or when markets fail to deliver efficient pricing for consumers, or when there are externalities like threats to the environment. Considering that India’s coal and natural gas reserves are limited, their markets are riddled with imperfections and that their extraction and end-uses involve threats to the environment, their extraction, end-use and pricing need to be regulated.

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