February 02, 2005, Business Standard
New Delhi
Our Economy Bureau

Frederic Jenny, Judge at the French Supreme Court, today said funding would be the key issue for ensuring independence of the Competition Commission. “No amount of details in the law can ensure independence as ultimately it’s the resources which matter.” Jenny said at a conference here today on Moving the Competition Policy Agenda in India.

Jenny said the “battle for resources” was very important in this context and added as far as he could recollect, only Turkey had a system where the competition authority was not dependent on government grants but was funded by a tax on shares traded on the stock exchange.

The issue was raised by S. Chakravarthy, consultant on Competition Policy and Law and a former member of the Monopolistic and Restrictive Trade Practices Commission. He said that the commission’s independence could suffer as it would have to depend on government grants. “It’s an arm that can be twisted.” He said.

V.K.Dhall, member (Administration) of the Commission, however, refused to go into a debate on the issue of independence, and said the government should re-examine whether there was a need for a two-year transition period before corporate merger related cases could be taken up by the Commission.

International experts at the conference also felt that the transition provisions did not serve much purpose. “Nobody prepares for the law if there is no fear. “ Albert Heimler from the Italian Competition Authority said. Earlier in the conference, Kirit S. Parekh, member, Planning Commission, said that there was a need to introduce competition in services being provided by the government free of cost or at subsidised rates.

“Subsidies need not be given to the schools directly. Instead students can be given vouchers which the schools can encash. This would provide schools the incentive to improve quality and attract more students, “ he said emphasising the need for competition

“It is now time to adopt a National Competition Policy” Parekh said adding that India never had a Competition Policy to address relevant issues in a systemic and comprehensive manner. A draft Competition Policy prepared by a committee headed by S Sundar, fellow, The Energy and Resources Institute was also presented at the conference.