GENERAL QUESTIONNAIRE-ICRR09

Biennial review of Competition & Regulations Scenario in India to promote effective markets
ICRR-II Cycle(2009)

Publications

March 28, 2009, New Delhi

India
Competition & Regulation Report
(ICRR) IInd Cycle
GENERAL-QUESTIONNAIRE
(India Competition Perception Survey)

*Mandatory Fields

*Name:

*Organisation:

Address:

*City/State:

*Email:

*Please
identify the stakeholder group you belong
to, by clicking the radio button
against relevant category:

Policy-maker/Government official (parliamentarians, central or state government officials, regulators)
Business (manufacturers, service providers, representative of business chamber, business associations, service provider’s association)
Civil society organisations (consumer organisations, advocacy groups)
Academia (academic staff at universities/business schools, researchers, representative of research institutes)
Media (economic journalists, editors of newspapers and business magazines)
Other experts/practitioners (please specify)

Each
question below has various options.
We request you to please give your response
by selecting the most appropriate option:

PART:A

I.
Level of Competition that Prevails in
the economy

1)
Is there enough choice in the following
products?

2)
As a consumer, how easy it is to get
following utilities?

3)
Suppose, you wish to switch suppliers

, how easy it
is to do so? Answer this
question for all the services listed
below:

4)
How good is the quality of service
under the
following heads?

II.
Nature of Practices that prevail in
the market place

5)
These days sellers are running several
promotion schemes to attract customers.
For example, ‘gift assured with every
purchase’, ‘buy 2 and get 1 free’, ‘summer
bonanza’, ‘monsoon hungama’, and the
list goes on. 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:

They are in the interest of consumers	They do not deliver promised rewards and are designed to dupe consumers	Some schemes are good, some are designed to dupe consumers	Can’t say/don’t know

6)
Often doctors’ ask patients to get diagnostic
tests done from prescribed laboratories.
Doctors argue that this is a way to
ensure authenticity and quality. Do
you think this practice (also called
‘tied selling’) is appropriate?

Yes, such advice is an effective way to ensure quality, since reliability of diagnostic tests is a matter of concern
No, this is just a means to make easy money and shuts out choice for patients who end up paying higher prices
Not always, some doctors do it to ensure quality, while others do it to make money
Can’t say/don’t know

7)
Often schools ask students to buy uniforms
from prescribed shops/sellers. Schools
argue this is done to maintain uniformity
and quality. Do you think this practice
(also called ‘tied-selling’) is appropriate?

Yes, this helps schools in maintaining uniformity and makes the items easily available to students
No, this is just a means to make profit and shuts out choice for students who end up paying prices higher than that prevailing in the open market
Not always, some schools do it to ensure uniformity and quality, while others do it for making extra money
Can’t say/don’t know

8)
Presently certain professions (medical,
accounting, legal) restrict advertising
by their members. Do you think such
restrictions are justified?

Yes, such restrictions protect the public from misleading information
No, restrictions on advertising favours established firms, restricts entry and has anti-competitive effects
No, instead of outright bans, clear parameters should be defined for truth in advertising, ruling out inducements, misleading claims, etc.
Can’t say/don’t know

9)
Certain industries in the country are
characterised by one or two dominant
firms. For example, Reliance holds more
than 50 percent market share in polyester
staple fibre, Grasim holds about 90
percent market share in Viscose Staple
Fibre. Please indicate if you think
such dominant status is a matter of
concern

Yes, emergence of dominant position is a matter of concern	No, there is nothing to worry; market forces provide enough competitive threat	Can’t say/don’t know

10)
The two products mentioned above: polyester
staple fibre and viscose staple fibre
are key intermediates in cotton textiles.
There are complaints of excessive pricing
by users of these intermediates. Similarly,
builders’ complain of excessive pricing
by cement manufacturers. How often do
you think businesses face anti-competitive
practices while purchasing raw materials
or intermediates?

There are many such cases of anti-competitive practices faced by business	There are occasional cases of such anti-competitive practices faced by business	There are no such cases	Can’t say/don’t know

11)
In pharmaceuticals, there are often
complaints that pharmaceutical companies
have to give a huge margin to druggists
to get their products sold. How often
do you think businesses face anti-competitive
practices while selling their goods
or services?

There are many such cases of anti-competitive practices faced by business	There are occasional cases of such anti-competitive practices faced by business	There are no such cases	Can’t say/don’t know

III.
Awareness/Knowledge on Competition and
Regulatory Issues

12)
Suppose the Department of Posts is
granted a monopoly in carrying letters
less than 300 grams (which is presently
under discussion). After acquiring this
monopoly, suppose the Department
increases significantly the charges for
carrying such letters. Please indicate
if the Competition Commission of India
is empowered to investigate such action
by the Department of Posts or for that
matter any Departmental Enterprise that
behaves in an anti-competitive manner.

Yes	No	Can’t say/don’t know

13)
Suppose Dr Reddy’s Laboratories Ltd and
Ranbaxy Laboratories Ltd enter into a
joint venture to manufacture a
particular drug, which is not produced
by any other company in the country.
Both companies fix the price of the drug
and claim efficiency in production.
Suppose there are complaints that the
drug price is high. Do you think that
this practice comes under the purview of
the Competition Act?

Yes	No	Can’t say/don’t know

14)
Suppose you want to transport goods
from one town to another. You find that
all booking agents in your town are
quoting the same price, which you consider
to be on the higher side. There are
similar practices prevalent at the local
level: cartelisation in car rentals/auto
rickshaw, high tariffs charged by private
transporters to ply in certain areas,
truck operators’ cartel, etc. Do you
think the mechanisms (e.g. competition
authority, consumer forums, any other
agency at state/sub-state level) that
exist to address such practices are
effective?

Yes, always	Yes, sometimes	No, never	Can’t say/don’t know

15)
Are You
aware of regulators in telecom,
electricity?

Yes	No

16)
What do
you think the role of a regulator is?

To develop and implement rules that create a competitive enviornment in the market	To implement the Competition Law	To facilitate business arrangements	Can’t say/don’t know

17) TRAI has passed a tariff order
freezing cable TV tariffs to that
prevailing as on 26th December 2003
(excluding taxes). Subsequently, it
twice allowed an inflation-linked hike
in tariffs. There are several other
tariff orders of TRAI that require
enforcement at the local level. Do you
think TRAI has been effective in
enforcing its orders at the local level?

Yes, always	Yes, sometimes	No, never	Can’t say/don’t know

18)
Have you
or your fellow stakeholders ever been
invited to participate in stakeholders
meetings organised by regulators?

Yes	No

19)
If yes,
was
the meeting participatory?

Not at all	Somewhat	Fully

20) The
attribute 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.

By making regulatory bodies more independent	Allocating more budget	Good quality personnel	Reducing political interference

21)How
would you rank the quality of regulation
in India on a scale of 0-4 (very poor-
excellent)? Choose only among numbers
0,1,2,3 or 4.

Very poor	Poor	Satisfactory	Good	Excellent

IV.
Nature and Impact of Government policies/measures

22) Some state government
have issued
an order that every person who buying
a two-wheeler has to buy a helmet from
the same vehicle distributor/seller.
The government argues that this mechanism
would ensure proper enforcement of its
order and serve its objective of public
safety. Do you think, this is a right
way to ensure public safety:

Yes, this would make people compulsorily buy a helmet
No, the mechanism adopted is not right; the order actually shuts the market for other helmet suppliers and is anti-competitive in nature
No, the government should instead focus on other means to ensure public safety, e.g. strengthening enforcement on the streets, organise public awareness campaigns, etc.
Can’t say/don’t know

23)
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 controlling the price of
all essential drugs is the right way?

Yes, controlling the price of all essential drugs is the best option considering that normal market forces do not operate in drug delivery, as consumers do not make choice for medicines; it is the doctors and retailers that play important role in purchase decisions
No, price control is not required at all; government should instead encourage competition with appropriate monitoring of prices
No, price control should instead be restricted to only a few medicines that have seen excessive price increase, and others should be put on a watch list
Can’t say/don’t know

24)
Monsanto-Mayhco holds a patent for genetically
modified BT cotton seeds. The state
government of Andhra Pradesh has charged
the company of extracting unreasonably
high royalty fees from user farmers
and has made a complaint to the MRTP
Commission. The company claims that
it is within its rights to charge a
price for its invention. In order to
protect its farmers from abusive practices,
the state government of Andhra Pradesh
has fixed a maximum price for BT Cotton
seeds sold by the company. Do you think
state government’s action of fixing
prices is the right way to protect interest
of farmers?

Yes, fixing prices will help the state government protect the interest of its farmers
Yes, the MRTP Commission would not have been effective in curbing abuse due to IPRs, and fixing prices was the best available option with the government
No, price control by government is anachronistic in a market economy; the government should have entrusted the task of fixing prices for patented goods to a specialised body such as the patents authority
No, the government should have instead pursued the Central government to allow more players to produce GM cottonseeds to break Monsanto’s monopoly and encourage competition
Can’t say/don’t know

25)
The above instances show the way in
which government seeks to intervene
in the functioning of markets to uphold
public interest. There are several other
instances (e.g. intervention in pricing
of essential commodities to make them
affordable to ordinary consumers;
giving free power to farmers to provide
support in irrigating fields). While
the overall objective behind such intervention
may be desirable, please indicate if
you think the manner of government
intervention is right?

Yes, always	Yes, sometimes	No, never	Can’t say/Don’t know

26)
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 preference policy is the right
way?

Yes, it compensates PSUs for social objectives they are required to achieve and enables them to compete with private companies
No, it creates uneven field for the private sector players and distorts the market process
No, the government should instead give PSUs autonomy and allow them to operate on purely commercial basis
Can’t Say/Don’t know

27)
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?

Yes, given India’s political-economy (where line ministers have a tendency to intervene in regulator’s functioning), such appointments allow regulators to maintain a congenial relationship with the government and enhances regulatory effectiveness
No, this precludes appointment of professionals and undermines regulatory effectiveness
Can’t say/don’t know

28)
A few years ago, Department of Telecom
had wanted to issue a policy directive
to TRAI on certain tariff matters (relating
to Access Deficit Charges, interconnection
usage charges, etc). Around the same
time, Minister for Communications announced
his one-India tariff scheme. Do you
think such actions by Minister/Department

Interferes in the functioning of the regulator i.e. TRAI and undermines regulatory autonomy
Gives policy direction for development of a sector and enhances effectiveness of regulatory regime
Sometimes it amounts to interference and sometimes it helps in the development of a sector
Can’t say/Don’t know

PART B:SECTORAL
REGULATION

V. Higher
Education

29) One of the recommendations of
National Knowledge Commission (NKC) of
India is that a university can only be
set up through legislature. Do you think
that this recommendation, if adopted,
will work as an entry barrier for new
universities?

Yes	No

30) Do
you think that free entry and a level
playing field for the private, public
and foreign universities is desirable
for enhancing the access and quality
of higher education?

Yes	No

31) If yes, how
should the quality of education be regulated?
Indicate your priorities on a scale of
1-3 by using only integers(1,2 or 3).

Strict monitoring of physical infrastructure such as buildings, libraries, sports facilities, teacher- student ratio etc
Introduction of exit examinations, testing students, especially those in professional courses, on the output side
By leaving it to market forces — the survival of the institution will depend on the employability of its students

32) In your opinion the
overall quality of technical education on a scale of 0-4 (very poor-
excellent) is:

Very poor	Poor	Satisfactory	Good	Very Good

33) The accreditation of
educational institutions also sends the signal of quality to the market. At
present the National Assessment and Accreditation Council (NAAC), created by UGC,
does the accreditation. In your opinion who (choose integer values 1, 2 or 3
where a larger magnitude denotes greater suitability) should be given the
authority to accredit the institutions?

NAAC should continue
Private accreditation agencies of international repute which are to be short listed by the regulator
Institution can hire any credit rating agency of its choice

34) For good quality education
we need good infrastructure and highly paid faculty that involves heavy cost. To
recover such costs the institutions have to charge higher fees. But the
government regulates fees to render more equitable access and does not provide
much leeway to the institution. In your opinion what is the best way for
achieving the right balance among the issues of access, quality and cost? Use
numbers 1, 2 or 3 to indicate suitability, with a greater magnitude implying
greater suitability

The institutions should be allowed to charge fees of their choice from non-poor students. However, the poor students should be charged lower fees, as decided by the government, and the difference in fees should be recovered from the students with higher capacity to pay
Make subsidized education loans to needy students easily available
Same fees should be charged from all students. The students can choose the institutions according to their paying capacity

VI Power
Sector

35)
The lack of expansion of private
capacity in the power sector, even
after various efforts, can be
attributed to

Lack of level playing field in public sector and private sector power generating companies
The state governments are neither allowing the rise in tariffs of subsidized categories such as agriculture and domestic, nor they are releasing adequate subsidies to cover up the deficits of SEBs
Industrial consumers are increasingly adopting captive generation which impacts the revenue from a distribution licensee
All the above

36)
The provision of open access in the Electricity Act, 2003 is expected to encourage competition in the
bulk power market and in retail supply but the implementation is very slow and
very few cases of open access actually exist. What you think is the reason
(choose integer values 1, 2 or 3, where a larger magnitude denotes greater
importance of the reason) for this?

The consumer opting for open access has to pay a surcharge for the loss of cross subsidization and wheeling charges which are quite high and act as disincentive for open access
Uncertainty in power supply and inadequate back up support provided by states
Both

37)
The network of power supply usually has
the attributes of a natural monopoly as
the costs of setting up multiple
networks are greater than the likely
gains of competition among multiple
operators. What are the ways according
to you (choose integer values 1, 2 or
3,, where a larger magnitude denotes
greater suitability of the method) of
checking monopoly power?

Subject them to close regulation by an independent regulator who must fix the access charges and ensure non-discriminatory open access for enabling effective competition in the content segment
Develop small power plants in the local vicinity of housing complexes so that distance of transmission is reduced
Both

38)
We have examples of successful
regulators such as TRAI, SEBI as well
as others that could not perform as
expected. In your opinion what are the
probable reasons for this lack of
success? Please rank the following
reasons in increasing order of
importance (choose integers 1, 2, 3 or
4).

Publicly owned utilities are not adapting well to the new operating environment where they are accountable to regulators for keeping costs under control and improving services
The regulators can only propose the tariffs but finally it is a political decision to decide on the tariffs to be charged from the consumers
Politicians are motivated by vote politics in their decisions
All of the above

VII Ports

39) Do
you think that inter-port and
intra-port competition is absent in
India?

Yes	No	Don’t know

40)
If you think that there is an absence
of competition in the port sector, what has been the reason for it?

Poor inland connectivity	Policy regime of protecting domestic ports against competitive pressures	Both

41)
The Tariff Authority for
Major Ports (TAMP) was set up in 1997 to fix and revise various port charges to
be collected by private providers of port facilities. It has comprehensive
powers for fixing tariffs in major ports but does not have jurisdiction over
minor ports or private ports. It has no other regulatory functions or powers.
All other powers are vested in the various Ports Trusts. Do you think there
should be one regulator exercising all regulatory functions, including tariff
setting?

Yes	No	Don’t know

VIII
Agricultural Produce Markets

42)
There are intermediaries in
agricultural produce markets at different
stages between the farm gate and final
buyer. Poor infrastructure and isolated
markets imply that there is a lack of
competition at the farm gate and at other
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 on intermediaries be reduced?
Please rank the following measures in
terms of increasing effectiveness (choose
numbers 1, 2, 3 or 4)

Encourage competition among intermediaries through better infrastructure for physical connectivity which removes geographical isolation of markets and can help bring the farmer closer to the consumer and through infrastructure for storage and credit which improves the bargaining position of the farmer and enables him to invite competition for his produce
Contract farming which entitles the farmer to sell a fixed quantity of a product at a stipulated time and price to a buyer
Direct farming or the direct interaction between farmers and final buyers at the retail or wholesale level
All

43) The Agricultural Produce Market
Regulation Act (APMRA) was adopted to
introduce regulated agricultural markets
so that producers get higher prices for
their product. To what extent (choose
numbers 1, 2, 3 or 4) have the regulated
markets succeeded in reducing the chain
of intermediaries and enhancing
competition?

The markets have not succeeded at all in ensuring effective competition and guarding the producer’s interest due to inadequate infrastructure
The markets have succeeded partially in regulating the conduct of intermediaries but have not paid any attention to diminishing the long chain of intermediaries
By introducing requirements of licensing for traders, regulated markets have restricted entry for many traders. Such entry, if allowed, could have increased the competition for farm produce and led to farmers getting a better price
All of the above

44) Does licensing for agricultural
traders in agricultural markets actually
harm the farmers by lowering prices?

Yes	No	Don’t know

45)
Could farmers benefit from computer
kiosks which provide information about
prices in various agricultural markets?

Yes	No	Don’t know

THE
SURVEY ENDS HERE…
THANK YOU VERY MUCH FOR YOUR COOPERATION!

Biennial review of Competition & Regulations Scenario in India to promote effective markets ICRR-II Cycle(2009)

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Biennial review of Competition & Regulations Scenario in India to promote effective markets
ICRR-II Cycle(2009)