Abstract
The TRAI released its first tariff order in March 1999 at the end of a consultation process beginning in November 1997. This paper analyses the tariff order in the context of economic principles of tariff regulation and regulatory practice. The order achieves its basic objective of ‘tariff rebalancing/ However, it is not possible to evaluate the rebalancing in terms of ‘cost-orientation’ and ‘operator viability’ as there is little information on costs and profitability of the Department of Telecommunication (DoT). This information problem is likely to persist and hamper effective regulation as long as DoT is not corporatized and given a commercial orientation.