• Taking India Forward in 2013

    By Pradeep S Mehta

    This month (December 2012) we saw some sanity revert in our law making process when law makers passed laws and pushed the reforms agenda. Thanks to the adroit handling of cantankerous issues and dissonance by the new Parliamentary Affairs Minister Kamal Nath. Whether, we agree with everything that the government has done well or not, we look forward to a resolute and smart government to take the growth agenda forward in 2013 as well…considering the nature of our fractious polity, the Central Government will need to become a true union government. More…

    Economic Times, December 31, 2012

  • Why regulation of organised retail is important

    By Pradeep S Mehta

    The winter session of Parliament witnessed another chaotic period on several issues, including foreign direct investment in the multi-brand retail sector. What is surprising is that the main opposition party, when in power in 2002, wanted to allow FDI in retail and the incumbent ruling party labelled it as anti-national. Now the tables have been turned around, quite funnily. Perhaps, the game plan appears to be bigger than the retail policy. On the other hand, domestic large organised retailing has already entered into our economic space, and no one seems to be worried about how they are running their business. The large retail sector has its own peculiarities and needs to be regulated in a sui generis fashion, as many countries have also done. Better late, than never. More…

    Financial Express, December 18, 2012

  • India’s uneven playing fields

    By Pradeep S Mehta

    Competitive neutrality is a minimum condition for effective mixed markets, for which the government needs to adopt and implement the National Competition Policy quickly. Despite being an essential ingredient for a successful competition regime, India is seeing several instances of distortion of this principle across its various sectors. In the recent past, there have been many such cases. The application of competitive neutrality and any deviation from these principles, therefore, should always be subject to the condition that the benefits outweigh the associated costs. For this to happen soon, the government needs to adopt the National Competition Policy and implement it. More…

    Business Standard, December 14, 2012


  • Policies to allocate natural resources should be dynamic and transparent

    By Pradeep S Mehta

    The Supreme Court is rightly peeved that the government did not auction the entire spectrum vacated as a consequence of the cancellation of the dirty licences in February, and so are the people of India. But even if the government had done so, the heroic recommendations on a high reserve price might have had the same result. More…

    Economic Times, November 26, 2012

  • PSUs cartelising in insurance?

    By Pradeep S Mehta

    Government is expected to encourage competition as it creates efficiency in the economy. Following the 1990s reforms, the insurance sector was deregulated and private sector firms were allowed to operate in India. Until the 1972 law on nationalisation of the insurance business, many private players did operate in India. Then the government nationalised the insurance sector. Now that there is a healthy competition in the sector, thanks to the arrival of many private players, the finance ministry wishes to turn the clock back. In a recent directive, the ministry asked the heads of four government insurance companies not to compete against each other, but to coordinate their activities. This is a retrogressive measure and needs to be reversed. More…

    Financial Express, November 06, 2012


  • Restore Trust for Economic Growth

    By Pradeep S Mehta

    Industrial progress is not the only key to creating economic wealth, but there are several other flanking and fundamental areas that need to be reformed. These include, but are not limited to, governance and administrative reforms, and, most crucially, restoring trust of people in government. Only then the National Investment Board proposal will earn people’s confidence. Should the government also not set in motion a process that can identify and list reform and remedial measures and report to people periodically? The checklist could begin with crony capitalism, corruption in the polity and administrative reforms. Even if we take one step at a time, it can be done. More…

    The Economic Times, October 29, 2012

  • Equity is Good for Growth

    By Pradeep S Mehta

    Competition policy promotes economic equity and democracy, which is a building block for political democracy. While macro reforms have to be followed, micro reforms with effective meso-level institutions are as important to ensure that markets function well. In fact, the poor suffer more when markets do not function well. Businesses benefit from competition reform, so do the poor, as it leads to more equitable growth. The current buzzword for economic planning and management is ‘inclusive growth’. More…

    The Economic Times, October 08, 2012

  • CCI needs to pull up its socks

    By Pradeep S Mehta

    Recently, CUTS published a round-up on the performance of the Competition Commission of India called “CCI through the lens of media”. The media scan captures CCI’s reported activities from 2009 in an attempt to assess how it has performed since it became active in enforcement. We think that though still evolving, CCI has been very active in its role as the competition watchdog. Notwithstanding this, some deficiencies, such as a lack of sound economic reasoning in its case analyses and a desired level of consistency in its orders which is partly attributed to this, continue to mar its functioning. To do this better, CCI needs to pull up its socks. More…

    The Financial Express, October 08, 2012

  • The two per cent conundrum

    By Rijit Sengupta

    The implementation of public policies in India is often characterised by lack of convergence of ideas and processes, resulting in unnecessary duplication of efforts and loss of public resources. Such discordant policy processes not only baffle their implementers, but also reduce the anticipated benefits considerably. The development and implementation of the government’s “corporate social responsibility” (CSR) strategy seem to have followed this trend. As a result, there is a lot of confusion and misgivings about how to make it operational. More…

    Business Standard, October 06, 2012

  • East Africa should reassess stand on EPAs

    By Fredrick Njehu

    Only 36 countries within the ACP group have concluded some sort of agreement. Eight of them are yet to sign, and 15 have not even started the ratification process. The rationale of the deadline is clear: if any African or Pacific country wants to continue benefiting from duty-free and quota-free EPA market access, it must conclude the negotiations before 2014. More…

    Business Daily Africa, October 04, 2012


  • CCI will remove policy hurdles that distort markets and hurt economic growth

    By Pradeep S Mehta

    Every new policy proposal is greeted by apprehension coupled with ignorance and turf issues. The proposed National Competition Policy (NCP) formulated by the Ministry of Corporate Affairs too may become a victim of this phenomenon. The Department of Industrial Policy and Promotion (DIPP) has reportedly picked holes in the draft policy when it should, in fact, be the strongest supporter. Looking at our dismal economic scenario, one of the contemporary and important policy prescriptions by the government is to adopt competition reforms through an NCP. The NCP, when implemented, will usher in the second big wave of economic reforms after 1991. In the medium term, it will also curb inflation that is currently a big issue in India. More…

    Economic Times, September 20, 2012

  • Green implications of compulsory licensing

    By Pradeep S Mehta

    The Rio+20 summit was a disappointment for many, but it is pertinent to keep repeating its larger sustainable development agenda for the safe future of humankind. Nation states need to continue taking steps to mitigate adverse environmental effects, and learn about successes and failures from each other, from different fields. One such learning is from the recent grant of a compulsory licence to a cancer drug in India. One of the three grounds on which compulsory licence was granted to Natco for the drug Nexavar was that Bayer, the patentee, had failed to ‘work the patent’ in India. This provision has the potential to facilitate unused patents, covering Environmentally Sound Technologies, as well as provide a way forward for their transfer, dissemination and diffusion. More…

    Financial Express, September 10, 2012


  • Cross the red tape Rubicon

    By Pradeep S Mehta

    The origin of the term ‘red tape’ lies in an old British Indian practice of tying all files with red tape while being carted on mules and donkeys from Delhi to the summer capital Shimla.This is perhaps an apocryphal story, nevertheless revealing. While the British left India, the system got much worse than the hardy animals that carried the files to the hills. More…

    Economic Times, August 23, 2012

  • Global movement to raise awareness about cartels

    By Pradeep S Mehta

    Cartels are considered the most egregious of anticompetitive practices. As always, it is the poor who suffer the most. In many countries cartelisation or collusion is treated as a criminal activity under the law. While companies have paid heavy fines, senior executives have even undergone jail sentences. Further, consumers do not have access to and cannot freely select the quality and variety of goods and services they desire at reasonable prices, and especially if they do not have a choice. The only option is to not to buy, but when it comes to essential items like food or fuel, boycott is not an option. More…

    Financial Express, Bangladesh, August 04, 2012


  • States need to follow a non-partisan approach for better governance

    By Pradeep S Mehta

    Not many know that the words ‘Central government’ does not exist in our Constitution, but we have ‘Union government’ and states. Our founding fathers had envisioned the idea of a true federal political structure. However, due to fears of fissiparous tendencies, which have been a part of India’s history, the practice has been that all our laws define the Federal government in New Delhi as the Central government and not Union government. More…

    The Economic Times, July 30, 2012

  • ‘Good citizen’ IKEA turns its back on SMEs

    By Riji Sen Gupta

    The story about IKEA’s discussions with the government for relaxing the “local sourcing” clause for it to invest in India has come as a surprise to many of us. IKEA, the Swedish home-furnishing multinational — the world’s largest — wants to enter the Indian market with an investment worth euro 1.5 billion (Rs 10,500 crore). At a time when the government’s coffers are strained, it is quite likely that it will give in to IKEA’s demand over reducing dependence on local small and medium enterprises (SMEs) in the first 10 years of its operation. India requires all single-brand retail firms to source 30 per cent of the merchandise they sell locally from small vendors. IKEA has indicated that it will need the whole period of 10 years to meet this requirement, and hence requested the government to relax this stipulation on a yearly basis. More…

    Business Standard , July 22, 2012

  • A policy coherence unit can resolve turf wars among ministries, helping businesses

    By Pradeep S Mehta

    Policy incoherence in our governance system is serious. It is spurred by turf claims, some of which are simply irrational. In the exercise of reforming business regulations, another major effort by the Planning Commission is to ensure policy coherence mechanisms so that all the horses drawing a coach, even when blinkered, can trot in unison. Even if we have very good policies, they exist in silos – developed and administered by different branches. Or sometimes, a very good policy is rejected by some branch because it would curtail its own discretionary and rent-seeking powers. More…

    The Economic Times, July 19, 2012

  • Unhealthy abuse of dominance

    By Pradeep S Mehta

    The Competition Commission of India (CCI), since its establishment, has already taken action against many firms for abusing their dominant positions such as the famous DLF case. However, the health sector is more critical, given the extent to which the poor are vulnerable to abusive behaviour by the firms. In addition to particular cases, it is also critical for CCI to inter alia invest heavily in getting acquainted with the whole rubric of the interface between competition and IPR, which would prove useful in dealing with abuse of dominance in the health and similar sectors. More…

    Financial Express, July 09, 2012

  • Healthcare industry is a rip-off

    By Pradeep S Mehta

    The absence of regulatory oversight in the health industry needs urgent attention. A standard pricing policy is required in the healthcare sector to reduce costs. A proper regulatory system with strong enforcement mechanisms needs to be introduced to improve the quality of service delivery and keeping unscrupulous elements at bay. Local authorities at the State level should be properly empowered to ensure that minimum standards of services are offered across healthcare institutions. A speedy adoption of Clinical Establishment (Registration and Regulation) Act 2010, by the States would bring some uniformity in quality of healthcare services across private and public sectors. More…

    The Hindu Business Line, July 02, 2012


  • Action for India’s Renewal

    By Pradeep S Mehta

    The world is in turmoil and so is India, but for different reasons. The common denominator is that bad governance everywhere is the main reason for the apocalypse. In India, we have an elected government, but rudderless, and an Opposition that is suffering from sclerosis. There is severe polity paralysis and policy stasis, sprinkled with a dose of profligacy. While many politicians are busy in making money in partnership with civil servants and businessmen, most of our people are suffering from the adversity. Not all politicians or civil servants or businessmen are crooked, so it would be unfair to use a paintbrush. It is time for every citizen to be counted in the peaceful campaign to tackle corruption and kickstart stalled policy. More…

    Economic Times, June 25, 2012

  • India needs to press ahead on Road Safety

    By Pradeep S Mehta

    The road safety scenario in India is terrible and no serious attention is being paid. The Sunder committee recommends a National Road Safety Board to oversee road safety issues and to evolve strategies for policy implementation. India’s dismal record in road safety is, among others, due to involvement of multiple government departments and ministries at the central and state levels. It is in the interest of the nation and its citizens that the National Road Safety and Traffic Management Board Bill, 2010, for creation of a centralised agency is passed at the earliest. Prior to that, the Road Ministry should undertake an intensive and extensive consultative process to ensure that shortcomings are addressed and that the Bill has enough teeth. More…

    Live mint, June 23, 2012

  • Inland water transport sector susceptible to anti-competitive practices

    By Pradeep S Mehta

    In April 2013, the Haryana government transferred senior IAS officer Ashok Khemka for the second time in six months (44th time in his 22-year career). The use of transfers and postings in States as a means of harassing officers who are inconvenient because of their professional independence or because they are perceived to be close to an outgoing chief minister is a well-known phenomenon. Articles 310 and 311 of the Constitution make it impossible for civil servants to be dismissed or demoted by elected representatives. However, politicians exert control over policy outcomes by reshuffling the bureaucracy across posts of varying importance. The “politicisation” of the bureaucracy has become a major public policy issue in India. More…

    The Financial Express, Bangladesh, June 21, 2012

  • Untangling Regulatory Overlaps

    By Pradeep S Mehta

    Nowhere in the world are banking mergers outside the remit of competition laws. The only exception is Turkey, where the central bank oversees banking mergers, but it is empowered to do so under their competition law and not banking laws. But exemptions do not prove the rule. Because competition enforcement and sector regulation are complementary instruments, and aim at ensuring that markets functions well. But ambiguities and overlapping jurisdiction often create confusion, as is happening in India currently. There are two proposals before the government to boost the competition culture in the country. First, to amend the Competition Act to ensure coherence and efficiency. Second, to address a huge number of policy-induced competition distortions through a National Competition Policy. More…

    Financial Express, June 19, 2012

  • Parallel Imports: Trademarked vs. Copyrighted

    By Pradeep S Mehta

    If we look at India, Hindustan Lever Ltd was able to get a stay order from the Bombay High Court a few years ago on import of Lux soaps by Indian traders from Indonesia. It was cheaper there because of the huge depreciation of their Rupiah. In jargon, this type of trade is termed parallel imports, which is basically a competition policy instrument and does not violate intellectual property laws. Alas, there has been much confusion about parallel imports, which has now been settled by the government. But the catch is that while trademarked or patented goods can pass through the filter, copyrighted goods (books, DVDs etc.) may not, due to bad politics and policy incoherence. More…

    The Financial Express, June 12, 2012


  • Improving Investment Sentiment

    By Pradeep S Mehta

    When Coca Cola, among other foreign consumer goods manufacturers, was allowed to return to India in 1990s, it was not because we needed Coke, but to send the right signal to the world that we were interested in doing business with the whole world. Other than promoting healthy competition, our domestic capital availability was limited. We need foreign investment to meet our growing needs, for example, in the infrastructure sector. We would need over a trillion-dollar capital in the near future to sustain our growth. The problem is that many cannot see the big picture, or myopically pursue their self-interests. More…

    Economic Times, May 28, 2012

  • Unlevel playing field is wasteful

    By Pradeep S Mehta

    India is fraught with examples of distortion of competitive neutrality and wasteful subsidies and bailout packages. It is time we looked into the regulation of such grants as well, and wherever possible to provide cash support to the poor. The way forward is through the proposed National Competition Policy, which has addressed all these issues in depth. It is hoped that it will be adopted by the government sometime in not too distant a future. More…

    The Financial Express, May 21, 2012

  • Will RBI be a better judge for banking mergers?

    By Pradeep S Mehta

    Ever since the Competition Commission of India (CCI) started taking baby steps to regulate the jungle of competition abuses in the country, and some very successful cases, many started howling for an exemption from its bite. The latest one is from banking circles asking for an exemption from CCI’s remit to review mergers under the Competition Act, 2002, in that sector. Other strong contenders include the Department of Telecommunications seeking an exemption for the telecom sector. These moves are tragic and will affect the integrity of our economic governance system, and should be discouraged as strongly as the demand being made for exemptions. More…

    Business Standard, May 09, 2012

  • Cartels & Information Exchange

    By Pradeep S Mehta

    In India, it also appears as if the Competition Act, 2002, has not provided for justifiable reasons for exemption, as Section 3 generally describes all such agreements as void. Since there are some information exchange platforms that can yield pro-competitive outcomes, there might also be a need for Competition Commission of India (CCI) to take a lead in calling for necessary amendments to ensure that, as is the case in other jurisdictions, only those information exchange arrangements that have an appreciable adverse effect on competition are prohibited. More…

    The Financial Express, May 02, 2012


  • The Regulatory Chakravyuh

    By Pradeep S Mehta

    The Planning Commission is seriously addressing problems. In order to weed out or rationalise useless regulations, the plan body’s strategy also speaks about undertaking scientific regulatory impact assessments. The catch is that states will need to be involved in this exercise closely, as much of the regulatory chakravyuh exists locally. A consensus can evolve through a dialogue and the plan body will have to market it to states, like a skin fairness cream, to demonstrate to them that revenues will rise and new jobs created. More…

    Economic Times, April 30, 2012

  • Looking to Central Asia

    By Faisal Ahmed, M Absar Alam

    India’s foreign trade policy puts utmost attention to exploring new markets for exportable products and offshore investments. At a time when India’s look-East policy is exploring new modules of engagement in East and Southeast Asia, and its look-West policy has already been emphasising on broad-based engagements with the Persian Gulf region, it is high time to look at the geography in the Northwest as well. Amidst such efforts of engagements, the missing link is the Central Asian region, which has immense strategic importance. More…

    The Financial Express, April 27, 2012

  • The WTO needed now more than ever

    By Pradeep S Mehta

    WTO approval of new measures in favour of the least developed countries has shown a way forward, both through the haze of global economic uncertainty and against the risks of increasing protectionism. More…

    Global Briefing Magazine, April 2012

  • Wanted: A National Sarpanch

    By Pradeep S Mehta

    India has accepted the Westminster model of parliamentary democracy, which is now proving to be an unworkable method of running a government smoothly.
    Now is the opportune time to kick off a debate for changing over from a Westminster model to a presidential system. Electing a national sarpanch to get rid of the cantankerous and retrogressive coalition political system. Our children will never forgive us if we do not start the process now, knowing that it will still take a few years to bring about the change. More…

    Economic Times, April 19, 2012

  • Indo-Pak engagement needs strategic depth

    By Pradeep S Mehta and Abid Suleri

    With Pakistan’s cabinet approving the negative list approach with a commitment to grant the much-hyped most-favoured-nation (MFN) status to India by late 2012, bilateral trade and economic relations are all set to get a boost. With expanding bonhomie, is it not time for both to join up to look at international trade issues with third countries that affect them both, even if at varying intensities? This is important because, after a long era defined by conflicting cohesiveness and cohesive conflicts, both countries are now willing to identify and remove the deterrents to their bilateral relations. More…

    TThe Financial Express, April 10, 2012


  • Bad Politics Means Bad Economics

    By Pradeep S Mehta Sacking the then-railway minister Dinesh Trivedi after he presented a reformist rail budget is one of the darkest chapters in our recent chaotic economic history. One can understand the compulsions of coalition politics…This idea was not radical because fares had not been raised over the last decade. After all, bad politics leads to bad economic outcomes, which the country can ill-afford in the current situation of an alarming fiscal deficit, obstinate inflation and unusual policy paralysis. More…

    Economic Times, March 26, 2012


  • Catch the Signal of Change

    By Pradeep S Mehta

    Is India a banana republic or a dirigisme economy? Neither. Firstly, we are not a small country with a single export item, and we are neither a state-controlled economy. However, there is a preponderance of both elements in our governance system. In a colloquial sense, we are no better than a banana republic, where public interest is given the short shrift and crony capitalism rules. The state does control a large part of our economy, particularly natural resources, and has failed in allocating them in a fair manner to the best possible bidder, whether it is minerals or oil or spectrum. And private interest overrides public interest, coupled with unjust enrichment of the polity, babus and businesses. More…

    Economic Times, February 27, 2012

  • Why we must normalise Indo-Pak trade

    By Pradeep S Mehta and Faisal Ahmad

    The Indian commerce minister’s visit to Pakistan is likely to help develop a sustainable model of bilateral trade. In order to have a comprehensive and deeper engagement, both countries need to focus on several issues besides tariffs that act as impediments to bilateral trade and regional integration. A bilateral cooperation package covering transport and connectivity, harmonising standards in pharma, textile, cement, food products etc, streamlining financial institutions and banking facilities, and working for a common competition regime in South Asia has become a highly desirable goal. We thus need maintain the momentum of optimism of smoother business relations, taking it towards a peak. Here, two vital ideological considerations need continuous attention. One is political willingness, and the other is the effort to eliminate the trust deficit through change of hearts on both sides!. More…

    The Financial Express, February 14, 2012

  • A step for Indo-Pak trade normalisation

    By Pradeep S Mehta

    The forthcoming visit of Indian Commerce Minister to Pakistan on February 13 is likely to make way for developing a sustainable model of bilateral trade. The Maldives SAARC Summit has already asserted the vitality of bilateral cooperation as a necessity not only for the region, but for all their trading partners as well. The Pakistan’s Cabinet nod for grant of Most Favoured Nation (MFN) status to India and the Indian Prime Minister’s optimism for gradually moving toward Preferential Trade Agreement (PTA) are defining the baselines of trade normalisation. The visits by the two commerce secretaries: Rahul Khullar and Makdhoom Amin Fahim to Pakistan and India have generated an atmosphere of optimism. This has been resonated by not only the business community on both sides but also echoed by policy honchos as more than baby steps. Further, Makhdoom Fahim’s declaration that they now have the mandate from their establishment to move ahead in this direction reflects the hubris. More…

    The News, Pakistan, February 05, 2012


  • Overhauling Our Steel Frame

    By Pradeep S Mehta

    In one of our seminars on regulatory issues, a gentleman suggested that we should have a regulator of retail corruption who would set standards of ‘fees’ and timelines to deliver what the system should have done ab initio. He was of course referring to simple issues like ration cards which cause a public pain. Some laughed but I think there was merit in the suggestion because corruption will not disappear, whether we have empowered Lokpal or Lokayuktas in our States. It is like a man eating tiger, who having tasted the human blood, will not stop at doing so even if it is faced with the threat of being eliminated. Many of our babus are like man eating tigers, and not even afraid of being eliminated. The way forward is to tackle the causes of the corruption so that the menace is curbed More…

    Economic Times, January 30, 2012

  • Global problems & solutions

    By Pradeep S Mehta

    Interactions between trade and competition could not be more intimate than they are today, when countries the world over are getting severely affected by the volatility of trade in primary commodities. The major commodity spike of 2007-08 sent alarm bells ringing when the prices of many primary goods doubled from what they had been not so long ago. Much of this fluctuation may be explained through the simple economics of demand and supply, while managing supply side failures is critical to restore some sense in the market. One such management issue is that of the inability of trading nations to deal with rampant anticompetitive practices, especially when the importing countries pay heavily for anticompetitive practices exempted by exporting countries’ competition laws. A case in point here is the global potash fertiliser export cartel. More…

    The Financial Express, January 13, 2012