February 01, 2005, New Delhi, Press Release

Though, India has had a long experience of a competition law, it has never had a competition policy to address the relevant issues in a systemic and comprehensive manner. It is now time to adopt a National Competition Policy, particularly in the present liberalised regime, said Dr. Kirit Parikh, Member, Planning Commission.

He was delivering the keynote address at an International Conference, “Moving the Competition Policy Agenda in India”, organised by CUTS International at Hotel Claridges from 31st January – 1st February, 2005. The conference is being organized to release the project report on “Towards a Functional Competition Policy for India” undertaken by CUTS. The conference is being attended by about hundred national and international experts and practitioners, working on competition policy issues in various parts of the world. The conference is slated to suggest a draft National Competition Policy for India.

Dr Parikh also emphasized the need for introducing competition wherever possible, even in services provided by the government, free of cost or at highly subsidized rates. Taking the example of education, he suggested that subsidies need not be given to the schools directly, rather students can be given vouchers, which the schools should be able to encash. This would provide incentives to the schools to improve quality and attract more students, in order to get more vouchers.

Speaking on the occasion, Dr Frederic Jenny, Judge in the French Supreme Court, noted that one of the most important challenges, India would be facing in terms of implementing its new competition law, is the turf war between the judiciary and the executive. This has been manifest in the recent Supreme Court case on the new competition law. Such challenges exist in other countries as well, including France. Other challenges that India would face in moving its competition policy agenda are, lack of awareness, resistance from labour unions, resistance from business, etc.

Mr V K Dhall, Member, Competition Commission of India, appreciated the present study by CUTS noting that, it is a unique contribution to the cause of promoting competition in the country and would help CCI immensely in achieving its objectives. He further noted that India is possibly the only major country, which does not have a functional competition authority. This situation, however, has been created by the Supreme Court case, which would now require amendments in the competition law. This might further delay the process. Nevertheless, the CCI is engaged in advocacy and capacity building activities, including commissioning various research studies to understand the competition problems in the country. This would help in effective implementation of the law, whenever it becomes operational.

Outlining the benefits of competition policy on economic development, Roger Nellist, Senior Economic Advisor, DFID, UK, mentioned that a functional competition policy would lead to a congenial business environment for entrepreneurship development. This will create jobs and help in poverty reduction.

Even in the current liberalized policy regime, there are various policies of the government, which distort the market process. On this, S Sundar, Distinguished Fellow, TERI suggested that there should be `competition audit’ of all government policies, both at federal as well as state level.

Refering to the challenges of creating awareness as mentioned by Frederic Jenny, Pradeep S Mehta, Secretary General, CUTS International informed about the outreach seminars (roadshows), CUTS is going to organize in several places of the country in the coming months.