Competition advocacy is a key to take the reform agenda forward: M. Veerappa Moily

Competition advocacy is a key to take the reform agenda forward: M. Veerappa Moily

New Delhi, India, August 21, 2012

If competition succeeds, everyone is a winner, said M. Veerappa Moily, Minister for Power and Corporate Affairs while addressing a meeting on National Competition Policy and Economic Growth in India organised by CUTS International, an economic policy think-tank working on competition and regulatory issues. Thanking CUTS for its efforts on competition advocacy, he urged the participants to take the reform agenda forward. He also said that there should be a holistic approach to take the economic reforms agenda forward. He expressed hope that the Cabinet will approve the National Competition Policy soon.

More than 50 participants representing government, regulatory agencies, consumer groups, business associations, media and other stakeholders took part in the launch of the project which will conduct competition impact assessment in three sectors: pharmaceuticals, electricity, and the marketing of agriculture products.

Welcoming the participants, Pradeep Mehta, Secretary General of CUTS International, talked about studies which were conducted for 13 sectors as part of the work done under the Committee on framing the National Competition Policy and related matters constituted under the Ministry of Corporate Affairs, Government of India. The project would deepen these studies to propose specific regulatory changes to be implemented in identified sectors in order to enhance competition resulting in dynamic gains to producers and consumers.

Andrew Jackson, Counsellor (Knowledge Economy) of the British High Commission in New Delhi said that the main reason for supporting this project is to enable a more informed debate on Indias reform agenda and learn from the same.

Ajay Chhibber, Assistant Secretary General of the United Nations Development Programme and Regional Director for Asia and the Pacific, talked about how the sharp decline in Indias growth over the past few years is also a result of lack of competition reforms at micro and meso level. There are several hurdles in starting business in India, taxation policies, etc. serve as bottlenecks in its path to growth and many of them can be tackled by an effective competition policy.

Baijayant Panda, Member of Parliament, deliberated on possible hurdles in the implementation of competition policy. One of the major hurdles to overcome implementation challenges of the economic reform agenda lies in local politics, he said. The need of the hour is to modernise our polity and what we need right now is new and good politics.

Arun Maira, Member of the Planning Commission of India further emphasised on political-economic challenges in implementing a policy. He said that redesigning of institutions is needed to address these challenges and generating growth which is what the Planning Commission is attempting at the moment.

According to Dhanendra Kumar, Principal Adviser of the Indian Institute of Corporate Affairs and former Chairman of the Competition Commission of India, said that it is necessary to proactively promote competition in the Indian economy. While competition in markets will be monitored by the Competition Commission of India, anti-competitive outcomes of government policies, rules and regulations need to be reviewed through implementation of the competition policy. He also said that it is very important to bring competition reforms to the state level so as to broad-base the contours of economic democracy through a culture of competition.

Concluding the event, Nitin Desai, President, CUTS Institute for Regulation & Competition and former Under Secretary General of the United Nations, said that quantification of gains from competition reforms will set the agenda for completion advocacy. He hoped that the project will come out with case studies showing conditions necessary for competition reforms to succeed in India and identify sources of gains to producers and consumers.

With support from the British High Commission under its Prosperity Fund, the project will look at emerging challenges to move the competition policy agenda forward in India. It will look into political economy constraints of creating an enabling environment for the adoption of necessary regulatory reforms and will quantify possible economic gains to consumers and producers that are expected to flow from enhanced competition as an outcome of reforms.