Any fresh sector or a subsector will be included in the master list if it has six characteristics namely natural monopoly, high sunk costs and asset specificity, non-tradeability of output, non-rivalness in consumption, possibility of price exclusion, and presence of externalities.
Experts welcomed the decision, but said the government should have framed tighter rules.
"The initiative is laudable but the outcome is not every effective as it leaves inclusion and exclusion wide open not vastly different from current practice," said Vinayak Chatterjee, chairman, Feedback Infra.
The government said it consciously avoided a rigid framework.
"It has consciously been decided not to have a rigid and inflexible listing of sub-sectors, to be made universally applicable to all agencies," an official statement said here on Thursday.
Lack of consistency in definition of what constitutes infrastructure prompted the finance ministry to undertake the exercise after the issue was pointed out by the Prime Minister's office. Different regulators, ministries and policies have a different definition.
The RBI, perhaps, has the widest definition of infrastructure that includes construction of educational institutions and hospitals. The income-tax law has its own definition of infrastructure.
The new master list will serve as a guidepost for all the agencies responsible for supporting infrastructure in various ways.
Hope it helps :)
May 5th, 2015
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