Adopt National Competition Policy: CUTS Petition to Lok Sabha

New Delhi (India), November 28, 2013

Leading policy research and advocacy group: CUTS International has petitioned the Lok Sabha Petitions Committee, supported by BJD Parliamentary Party’s Chief Whip, Shri Bhartruhari Mahtab, MP, to ask the government to adopt and implement the draft National Competition Policy (NCP).

The NCP was prepared after hectic consultations with state governments, central ministries and key stakeholders including business groups and civil society organisations in November, 2011 more than two years ago.

NCP is a set of government measures, policies, statutes, and regulations including a competition law, aimed at promoting competitive market structure and behaviour of entities in an economy.

“The government has enacted several statutes and policies with intent to promote competition. The benefits have been substantial and manifested in various segments of economy, e.g. telecom, civil aviation, etc. However, the progress across sectors has been somewhat uneven, and so also the trickledown effects on the common man”, said Mr Pradeep S Mehta, Secretary General of CUTS International.

“There have been residual restraints and anti-competitive impact of policies and laws in several areas of the economy. Such competition distortionary policies hurt the most and act as an impediment for speedy economic recovery. The Competition law, adopting a post-mortem approach, is not sufficient to tackle this situation”, Mehta asserted.

“Growth, development and poverty reduction are the most important challenges that our governments have to face. To meet these challenges, governments look for a sound architecture of policy in which beneficial effects of markets can be maximised by action to prevent market failure. The development of a sound Competition Policy is an essential element of such an architecture”, said Dr Manmohan Singh, Prime Minister of India while opening the 3rd BRICS Competition Conference on 21st November.

Speaking at the same event, Mr. Sachin Pilot, Minister of Corporate Affairs, in his keynote address noted: “The Government of India has also been pursuing the idea of a National Competition Policy in order to promote economic democracy, entrepreneurship, employment, higher standards of living and an all-round development of the economy benefiting both consumers and businesses. The Competition Policy focuses on ensuring competitive neutrality, cooperation in competition advocacy and enforcement as well as establishing a complementary relationship between the CCI and other sectoral regulators. The National Competition Policy also proposes a competition assessment of all the government laws, policies and regulations. This is expected to instil a competition culture in all sectors.”

Speaking at a CUTS event on NCP: 2nd Wave of Economic Reforms in Delhi on 10th October, 2013, CCI Chairman, Ashok Chawla said the competition policy is important to tackle entry barriers that are inbuilt into the system and in larger sense the policy will lead to more robust economic welfare and provide governance to the country.

“The policies prior to 1991 have been institutionalised and it is difficult to demolish such institutions. Thus, we need independent agencies to review such policies to make them competition compliant and more relevant,’’ he said.

Former chairman of the National Competition Policy committee Dhanendra Kumar was of the view that while competition in markets will be monitored by the CCI, anti-competitive outcomes of government policies, rules and regulations need to be reviewed through implementation of the competition policy. The policy broadly refers to government measures, policies and regulations aimed at controlling the behaviour of enterprises and structure of markets.

Consequently, in order to herald a new wave of reforms unshackling and unleashing the full growth potential of Indian economy and entrepreneurship, a broad based, overarching competition culture promoting coherence in the reforms and establishing uniform competition principles across different sectors is necessary.

CUTS International has been vociferously advocating adoption of an NCP from quite some time. It has been part of various expert committees on competition and NCP, and also undertakes assignments and organises conferences/seminars to the further the cause of adoption of NCP.

Given that the NCP has the potential to unlock economic potential of the country and introduce transparent, non–discriminatory and pro–competitive policies and practices in the country, CUTS has petitioned the Lok Sabha Committee on Petitions, requesting immediate adoption and implementation of NCP

For more information, please contact:

Mr. Udai S Mehta, Associate Director, CUTS, +91-98292-85926,