India Competition & Regulation Report (ICRR) III Cycle
(India Competition Perception Survey)
Background (Why the Survey?)
India embarked on the path of economic reforms in early 1990s by shifting to market-driven economic policies. The thrust of economic reforms has been to allow for more competition resulting in better quality, lower prices and adequate levels of consumption.
Regulation of markets is however needed under certain circumstances to ensure that their working is not impeded through barriers created by market players i.e. markets continue to offer wide choice, with enough supplies available. Accordingly, changes are being made in the economic governance system of the country. This includes changing government policies/ measures; amending existing legislations or enacting new ones such as a new competition law,Indian Competition Act 2002, amended in 2007 (ICA); establishment of sector regulatory bodies in telecom, electricity, etc. All such measures are designed to ensure that markets function well in the new economic policy regime and yield desired results.
Now that the country is following a policy of market-oriented economic reforms for the past two decades, there is a need to assess the perception of stakeholders about the competition and regulation regimes prevailing in the country and also on the quality of regulation. Accordingly, a questionnaire has been designed to get feedback from stakeholders on the following four broad issues:
Awareness/knowledge regarding competition and regulatory Issues
Assessment of the quality of regulation
Assessment of the level of competition and nature of practices that prevail in the economy
Opinion about the nature and impact of government policies/measures
The questionnaires consist of 58 (objective-type, multiple choice) questions .We thank you in advance for your valued cooperation and assure you of strict confidentiality. Neither your name nor the name of your organisation will be revealed in any document based on this survey.
*Please identify the stakeholder group you belong to, by clicking the radio button against relevant category:
Each question below has various options. We request you to please give your response by selecting the most appropriate option. Please select only one response by clicking the radio button unless otherwise mentioned.
I. Level of Competition that Prevails in the economy
1. How important do you think is the role of competition in reducing price of the following products?
2. Suppose, you wish to switch suppliers, how easy is to do so? Answer this question for all the services listed below:
Consider the manufacturing sector in India; please tell us if any of the following issues are a problem for starting a manufacturing unit. Please indicate a separate response for small-scale and large-scale units.
4. Consider the manufacturing sector; please tell us if any of the following issues are a problem for the operation/running of a manufacturing unit. Please indicate a separate response for small-scale and large-scale units.
II. Nature of practices that prevail in the market place
5. Sellers run promotional schemes to attract customers. It seems to have become a competitive necessity to run such schemes to realise sales, profits and market share objectives. Please indicate your opinion on such schemes:
6. We often face the practice of ‘Tied selling’ (viz., doctors asking patients to get diagnostic tests done from prescribed laboratories/schools asking students to buy uniforms from prescribed shops/sellers). It is argued that this is a way to ensure quality. Do you think that this practice is appropriate?
7. Presently certain professions (medical,accounting, legal etc.) are restricted from advertising their members/services. Do you think that such restrictions are justified?
8. Certain industries in the country are characterised by one or two dominant firms. Please indicate if you think that such dominance is a matter of concern.
9.In certain product categories, there are complaints of excessive pricing by users of the intermediate inputs. How often do you think business face anti-competitive practices while purchasing raw materials or intermediate inputs?
10. In products like pharmaceuticals or FMCG goods, there are often complaints that producer have to concede sizable profit margins to retailer seller to get their products sold. Do you feel such practices raise the final price for consumers?
III. Awareness/Knowledge on competition and Regulatory Issues place
11. In case a monopolistic supplier increases the service charges/price of products sold, significantly, do you feel that the Competition Commission of India is empowered/will be able to investigate such anti-competitive actions.
12. There exist cartels in several sectors of the economy. Do you think that the existing mechanisms (e.g. competition authority, consumer forums, any other agency at state/sub-state level) for addressing such practices are effective?
13. Are you aware of regulators in telecom, electricity sectors?
14. There may exist several tariff/regulatory orders of independent regulators (viz. TRAI). that require enforcement at the local level. Do you think that the regulators have been effective in enforcing orders at the local level?
15. What according to you is the role of a regulator?
16. Have you or your fellow stakeholders ever been invited to participate in stakeholders’ meetings organised by regulators?
17. If yes, was the meeting participatory?
18. The attributes of quality of regulation are independence, accountability, transparency and integrity. How can the quality of regulation be improved? Please rank these measures on a scale of 1-4 (choose only 1, 2, 3 or 4) in order of increasing importance.
19. How would you rank the quality of regulation in India on a scale of 0-4 (Very poor=0 and Excellent=4)? Choose only among numbers 0, 1, 2, 3 or 4.
IV. Nature and Impact of Government Policies/measures
20. Government is considering a proposal to bring all essential drugs under price control in order to make them affordable and accessible, especially to poor people. Do you think that controlling the price of all essential drugs is the right way?
21. India has experimented with price control of select patented products. Do you think that such action of fixing prices is the right way to protect consumer interest?
22. There are several instances of intervention in pricing of essential commodities to make them affordable to ordinary consumers/farmers; while the overall objective behind such intervention may be desirable, please indicate if you think the manner of government intervention is right?
23. Is the government neutral among bidders (public and private) when granting public contracts?
24. Do you think that the number of procedures (on an average) needed for an entrepreneur to start a business has come down within the past five years?
25. Government often gives purchase preference to public sector units in government procurement in order to ensure their viability in the long run. Do you think such a preference policy is right?
26. There is presently a trend to appoint retired/retiring bureaucrats and judges as regulators. Do you think it is right to appoint them as regulators?
PART B: SECTORAL REGULATION
V. Competition from Abroad
27. Are cheap imports from overseas undermining the product standards/quality of products available in India?
28. Do you think there exists unfair production practices in some competitor countries that distort the level playing field for the domestic suppliers/industries both in the domestic and third-country markets?
29. If yes, how should this be regulated/contained? Indicate your priorities on a scale of 1-3 by using only integers (1, 2 or 3).
30.The Indian government and industry has been using safeguard measures to level the playing field of domestic producers’ vis-à-vis emerging market competitors. Do you think that this is a desirable/sustainable measure?
VI. Micro Finance Institution (MFI)
31. Do you think that the MFI sector in India needs to be regulated?
32. Do the sector/consumers only suffer from problems emanating from coercive practices and high interest rates?
33. Rate the state of competition between government-sponsored and private MFIs? Indicate your priorities on a scale of 1-5 [1=Very poor and 5=Very good
34.The MFIs in India give multiple loans to borrowers, leading to over-borrowing and unsustainable debt. How significant is this for debt default problems?
VII. Natural Gas
35. Are existing regulations adequately addressing the infrastructure issues transportation to supply of gas to consumers?
36. Can you on the basis of ‘priority to address’, rate, on a scale of 1-5 (1 for highest) the issues related to the natural gas supplies
37. The lack of expansion of private capacity in the gas sector, even after various efforts, can be attributed to:
VIII. Real Estate
38. Are the existing regulations adequately addressing the regulatory and competition issues in the sector?
39. Do you think that the regulatory requirements in India (esp. multiplicity of regulations, lack of consistency among regulations in different states) are a critical factor undermining the sector’s growth?
40. If you think that there is an absence of organised sector participation in the real estate sector, what has been the reason for it?
41. Will the strong arm of regulation (as proposed under the Model Real Estate Management Bill) and long outreach of regulators and bureaucrats improve
governance and reduce corruption in the
IX. Retail Distribution
42. There are intermediaries in retail markets at different stages of the retail supply chain. Poor infrastructure and isolated markets imply that there is a lack of competition at the different intermediary stages before the purchase by the final consumer. Intermediaries exploit such lack of competition to generate high profit margins; the result is a higher retail price than the level at the farm gate. Regulation and reduction in the number of intermediaries is essential for fair prices to farmers and consumers. In your opinion how can the chain of intermediaries be reduced? Please rank the following measures in terms of increasing effectiveness (choose numbers 1, 2, 3 or 4),
43. Are the perceived problems for small retailers and consumers a function of lack of independent central regulator/formal two-tier regulatory structure or do they largely result from malpractice/ corruption and lack of planning?
44. By introducing requirements of licensing for traders, regulated markets have restricted entry for many traders. Such licensing requirements, if disallowed, could have increased the competition and helped consumers for getting a better price.
45. Are predatory prices (excessively low prices), a serious problem in the sector?
46. Are there government regulations/policies that explicitly work against the small retailer?
47. Has the relaxation of the FDI cap (upper limit) introduced more choices for the Indian consumer?
48. Are there any ex-ante (pre-existing) mechanisms to assess the effects of potential competition concerns in Indian retail sector?
If yes ,the interviewer to please get an explanation for this qualitative query.
49. How damaging are exclusive rights given in concession agreements to concessionaire (necessary to enhance project viability) for leading to possible abuse of dominance? Indicate your priorities on a scale of 1-3 [1=Very damaging and 3=Not damaging]
50. How important a concern is the right given to charge tolls, necessary to maintain the infrastructure, for leading to possible abuse of authority? Indicate your priorities on a scale of 1-3 [1= Not important and 3= Very important]
51. Are the present regulations adequately promoting competition in this sector while addressing the demand for road infrastructure?
52. Is the limitation imposed by the absence of an independent regulator for the sector serious?
XI. Telecommunication Services
53. How restrictive are the prequalification processes and requirements for bidding for licenses?
54. How damaging/debilitating has been the deterioration of functional and financial independence of TRAI over time?
55. How damaging/debilitating has been the lack of regulatory certainty in the sector from the perspective of its growth?
56. Can the slow growth of broadband penetration in the country regulation induced or technology/purchasing power induced?
57. The Government recently approved sharing of all the physical network infrastructure components by multiple operators. This has the potential of reducing costs for telcos and also forces the operators to use the same technology and features, i.e. encourage interoperability. [You may select more than one option for this question]
58. Is the mandated infrastructure sharing (as discussed above) facilitating competition?
THE SURVEY ENDS HERE.
THANK YOU VERY MUCH FOR YOUR COOPERATION