Strengthening Regulatory Agencies The policy on industrial tariffs is of fundamental importance. A rise in tariffs would lead to some reduction in output. This in turn will reduce revenues from the manufacturing sector which contributes to 70 percent of FBR revenues. In net terms the overall revenues from the sector will decline. Therefore, NEPRA should be pushing for lower electricity tariffs especially in the industrial sector which will contribute to faster growth and lower inflation. This will justify the big expansion in capacity in the last five years for electricity generation. 4.4. Strengthening Regulation • Regulatory Agencies should be more autonomous and stronger : For example, the SBP should be able to set limits on domestic bank borrowing by the Government. However, it should aim for the inflation target set by the NEC. Other regulatory agencies should be distanced more from concerned Ministries. This must be the case especially with NEPRA and OGRA. The CCP should be endowed with stronger legal powers. An up-to-date information system should be set up to quickly detect violations of a competitive market. CCP should also examine the pricing policy of SOEs which are natural monopolies. • Appointment of Members of Boards : should not be by Ministries but by a confirmation process in a Select Committee of the Senate of Pakistan. Serving civil servants should not be members of Regulatory Boards. • Annual Reports: of all Federal Regulatory Agencies must be presented in the CCI, which in turn should present a report to the Parliament. CCI meetings must be held on a quarterly basis as highlighted elsewhere. • Provincial representatives : All Boards of Regulatory Agencies must have representation from each Province. • Improvement in the image of NAB: As highlighted above there is a strong perception of a biased role. This perception must change. The amended NAB act should also be placed before the National Assembly. The performance of Provincial and local regulatory agencies also needs to be substantially improved, especially in the areas of environment protection, land and building regulations and operation of wholesale and retail markets of essential food items. 41