April 30, 2005, Jaipur, Press Release
When India decided to remove all non-tariff barriers from 1st April 2001 due to its commitments at the WTO, the entire Indian industry feared that this would lead to an invasion of cheap Chinese products in the Indian market and closure of Indian businesses. As per data available, the bilateral trade between India and China is presently about $14billion. Interestingly, India has a trade surplus with China, informed Yashwant Sinha, former Finance Minister and MP, dispelling the fear that foreign competition will weed out Indian industry. “Indian industry has the capability, and there is no need to fear from foreign competition”, opined Sinha.
Sinha quipped that while we adopted a democratic set up, which made political parties compete with each other and even entry to civil services is through a competitive process. However, surprisingly we did not follow the same principle while framing our economic policies. Instead, adopted a licence-permit-quota raj, which was anti-growth, anti-consumer and anti-industry. This distortion in policy was changed in 1991 when we adopted a liberalized regime. Anyhow, this does not mean giving a free play to market forces, which may jeopardize the entire reform process. Instead, proper rules and regulations, and regulators are required to ensure that the market players work in a rule-based framework.
Sinha was speaking at a seminar jointly organised by the Consumer Unity & Trust Society (CUTS) and PHD Chamber of Commerce & Industry (PHDCCI) on “Developing Markets through Competition for Growth and Equity”. The seminar was organised to disseminate the findings of a research report recently brought out by CUTS, which highlights several anti-competitive practices prevailing in the economy that impede the growth.
Pradeep Mehta, Secretary General, CUTS presented the main findings of the report. He opined that even in the liberalised regime, the state needs to play a pro-active role in promoting fair and orderly market, as distortions and failures in markets are quite ubiquitous. It needs to be realised that competition law is not a luxury of the developed world, but one of the necessary tools for developing countries in their fight against poverty, added Mehta.
Among other speakers were Prof TCA Anant from Delhi School of Economics and a renowned competition expert in the country; Dr V S Vyas, Institute of Development Studies, Jaipur; Mr D R Mehta, Former Chairman, SEBI and M C Mehta, Co-Chairman, PHDCCI.
Prof Anant opined that in a democratic set up, Parliament should have a supervisory role over all institutions. In the current era, where independent regulators are being set up such as in telecom, electricity, etc. there is need to draw a boundary of this ‘independence’ and develop mechanisms such as these institutions are accountable to the Parliament, which represents the will of the people.
Dr Vyas was of the opinion that competition policy should not be the sole preserve of only one agency, and it should permeate through all government departments and agencies. D R Mehta expressed dissatisfaction at the government’s interest in consolidation of banks. According to him, government should not interfere in commercial decisions and should allow the market process to work.