1. Competition law not a ‘panacea’ or substitute for ‘good governance,’ says Sikri
2. Focus of regulator on efficient market practices, creating level playing field for all
3. Agency engages with sector regulators, but frictions caused by overlaps exist
India’s Competition Act was enacted to ensure the growth and expansion of the market, not to bring about an equitable distribution of growth, chairman of the country’s antitrust authority said.
Speaking at the International Conference on Competition and Development, organized by CUTS International in New Delhi on Monday (19 March), Devedra Kumar Sikri, chairman of the Competition Commission of India, said economic growth does not produce a ‘trickle-down effect’ that benefits those at the bottom of society.
At his presentation ‘Competition Policy—A critical link to inclusive growth,’ Sikri said the virtue of the competition law is in its intent on ensuring growth of the market through effective market practices. Competition laws are not a panacea or a substitute for good governance, Sikri said, adding that robust socio-economic welfare schemes are required to foster equitable growth and development.
The antitrust agency’s mandate is to enforce laws that level the playing field and enhance the quality (of goods and services), reducing costs by improving market efficiencies, he said.
Sikri however noted that different jurisdictions had varying priorities, and that for some, equitable growth was at the forefront.
India, the world’s seventh largest economy, is also one of the fastest growing markets, he said, noting that it is the twelfth largest in terms of purchasing power parity.
Yet, stark inequalities exist within society, he said.
Competition law, noted the chairman, only addresses supply-side factors and not demand-side bottlenecks that have arisen due to low levels of disposable income.
Economic privation is prevalent in other Organization for Economic Co-operation and Development states as well, he said, with roughly half of the world’s population living on a mere USD 2.5 per day and some 1.3bn people subsisting on USD 1.25 per day.
Political posturing
Meanwhile, Sikri played down any frictions between the antitrust body and the Telecom Regulatory Authority of India (Trai), noting that while there were certain overlaps in regulatory authority, it was incumbent upon both entities to respect each other’s territory.
Such regulatory overlaps were common across industry sectors. Yet, said the chairman, the competition commission makes a point of engaging with sector-specific regulators while investigating companies in their area.
Sikri has in the past criticized the telecom regulator for issuing measures on predatory pricing.
Last month, Trai came out with new pricing rules after established telecommunications players, including Bharti Airtel, Vodafone and Idea Cellular, alleged that Reliance Jio was indulging in predatory pricing.
by Shivendra Kumar, Freny Patel, Indra Budiari in New Delhi
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