India Competition and Regulation Report (ICRR I Cycle 2007)

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REPORT

CUTS C-CIER has undertaken the project on India Competition and Regulation Report (ICRR) against the background that while India has embraced market-oriented economic reforms, there is, as yet, no periodic review to assess functioning of markets in the country. This is desirable given the existence of distortions in economic management of the country that impede realisation of competitive outcomes. Considering the important role of market forces in a liberalised economic regime, there is a need to do periodic assessment of competition and regulation scenario in the country. ICRR is an attempt to fill this vacuum. It would highlight various distortions in economic management of the country and provide inputs on a periodic basis to policy community as well as other stakeholders for taking necessary actions to promote well-functioning markets.

The project has been supported by The British High Commission, New Delhi

Duration: First issue of ICRR (ICRR,07) will be released in June 2007

Backgrounder

Since 1991, wide-spread market-oriented economic reforms and liberalisation measures have been undertaken in India to promote competition and ensure efficient utilisation of resources. Consequently, there has been a paradigm shift in the approach to economic management in the country.These efforts towards ensuring a competitive economy have got a further impetus with the Government of India making ‘competition’ a serious policy issue. This is reflected in the National Common Minimum Programme of the present coalition government.

In spite of the various efforts, there exist distortions in the economic management of the country that impede the realisation of competitive outcomes. A research study recently brought out by CUTS, “Towards a Functional Competition Policy for India” highlights the existence of several anti-competitive practices and outcomes that emanate from policy/practices of business as well as government (central as well as states). Besides there are cases of regulatory failures, at national as well as sub-national level. Some of these distortions are also highlighted in the Mid-term Appraisal of 10th Five Year Plan brought out by the Planning Commission of India. All these factors impede the process of achieving a sustained high economic growth, generating employment opportunities and eradicating poverty.

Economic reform is an evolving process, which seeks to facilitate the market process to achieve desirable outcomes. India is following a policy of market-oriented economic reforms for the past one and a half decade. However, as yet there is no periodic review to assess the functioning of markets and provide relevant inputs to the policy community. Considering the important role played by the market process, there is a need to periodically review the competition and regulation scenario in the country. This review would highlight the various market-related distortions in the economy, and provide relevant inputs to the policy community as well as other stakeholders for taking necessary actions to ensure well-functioning markets.

It is in this context that CUTS has undertaken to bring out a biennial report, christened as “India Competition and Regulation Report” (ICRR).

The first biennial issue of ICRR is scheduled for June 2007

Objective

• Serve as an important tool for doing an independent monitoring and evaluation of competition and regulation scenario in the country
• Provide comprehensive and contemporary assessment of the state of competition and regulation in India
• Provide necessary inputs to Government (Central as well as States), Competition Commission of India (CCI), sectoral regulatory authorities, other governmental agencies, civil society organisations, business, academia, media, professionals, etc
• Serve as a useful source of data and well-researched information on competition and regulatory issues in the country

Scope

• various policies/practices of Government (Central as well as States) in terms of their impact on competition
• working of the Competition Act and sectoral regulatory legislations
• competition issues in regulated sectors and competitive sectors
• impact of competition on various stakeholders (in particular, consumers and business)

Activities

• Form National Reference Group (NRG) comprising of eminent experts and policy makers to guide in implementation of ICRR
• Finalise structure and contents of ICRR,07
• Computation of India Competition Perception Index
• National Seminar in Delhi for public release of ICRR,07
• Policy brief (summary of ICRR findings and recommendations) for reaching out to stakeholders
• Meeting of Parliamentarians’ Forum (hosted by CUTS) in Delhi to present key findings of ICRR,07

Output

• Biennial issues of ICRR (first one in June 2007)
• Data/statistics and well-researched information on competition and regulatory issues in the country
• List of policies/practices that affect functioning of markets in the country, and actions required
• India Competition Perception Index (summarising the perception of various stakeholders on competition and regulation scenario in the country)

Structure of ICRR

• Theme Section : For each biennial issue, a theme will be selected and issues relating to the theme will be covered in this section. The section would carry out an impact assessment of competition regime prevailing in India by considering certain attributes of the impact of competition that reflects precise outcomes e.g. access/availability, price, employment generation, etc. The objective is to analyse one important dimension of competition in detail, independent from other sections and draw specific policy recommendations.
• Sectoral Analysis: This part would be a descriptive evaluation of competition and regulation issues at sectoral level and will focus on the process of competition by looking at one regulated industry and one competitive sector.
• Competition Regime and Stakeholders: This part will evaluate the overall impact of competition regime on consumer welfare and business welfare. In addition there would be a perception survey to summarise perception of various stakeholders on competition and regulation in the country.
• Conclusion: This chapter will outline specific prescriptions for government and various stakeholders that emerge from each issue of the report. It would also map out progress made between two issues of ICRR relating to competition and regulation scenario in India. Further, the chapter will bring together all divergent findings from other sections of the report and analyse them appropriately.

Contact Person and Implementing Organisation
Udai Mehta
Consumer Unity & Trust Society (CUTS)
Centre for Competition, Investment & Economic Regulation (C-CIER)
D-217 Bhaskar Marg, Bani Park
Jaipur 302 016, India
Tel: 91.141.228 2821, Fax: 91.141.228 2485
Email: c-cier@cuts.org
Website: www.cuts-international.org