Need for Cooperation, Coordination and Competition Reforms
New Delhi (India), October 10, 2015
“India needs cooperation and coordination reforms as much as it needs competition reforms”, said Arun Maira, President, CUTS International while speaking at the opening session of a national seminar entitled, “Making Competition Reforms work for People”. This event was organised to share the findings of a CUTS project entitled, “Competition Reforms for Enhancing Social and Economic Welfare in Developing Countries” (CREW project, www.cuts-ccier.org/CREW). Mr. Maira urged the gathering to also start thinking about ways to foster better cooperation and coordination, in addition to competition reforms. Mr M S Sahoo, Member, Competition Commission of India stressed on the need for expanding the frontiers on competition reforms, as it is difficult to expect that the Competition Commission of India by itself would be able to promote competition across the country.
The CREW project is being implemented by CUTS in four countries: Ghana, India, The Philippines and Zambia across two common sectors – Staple Food and Bus Transport, with support from DFID (UK) and BMZ (Germany) facilitated by GIZ (Germany). The objective of the project is to better demonstrate implications of competition reforms on producer and consumer welfare.
In the staple food sector, CUTS highlighted that competition in the seeds sector has had significant impact on users (farmers) through improved quality at low cost and better access in the state of Bihar. While, entry barriers in agriculture produce marketing in Rajasthan seem to have had negative implications on private players due to the excess documentation, security deposit and other factors. The envisaged way forward was improving access to competitive and organised market for farmers and enabling easier entry and better engagement of private sectors.
In bus transport, the project found that monopoly rights in ‘state carriage’ conferred to state owned operator in Gujarat (Gujarat State Road Transport Corporation) has had negative implications on private operators. In Madhya Pradesh, while the public transport sector has been liberalised, market failure has resulted in low quality of services and consumer grievances. The recommendations in this sector include constitution and effective operation of State Road Transport Regulatory Body in Madhya Pradesh and Gujarat.
In addition to findings of CREW project, the possibility of replicating CREW methodology for exploring pro-competition reforms in other sectors was discussed at the seminar. Representatives from TERI, Nielsen India and CUTS International made presentations on railways, tourism and digital finance markets in this regard.
Mr. M.S. Sahoo, Member, Competition Commission of India and Dr. Subir Gokarn, Director (Research) Brookings India, were distinguished discussants at this session. Mr. Sahoo highlighted the need for effective regulation for ensuring competition reforms work for people. He highlighted the issue of independent regulation, the need for building regulatory capacity and effectiveness. Dr. Gokarn highlighted the need to consider regulatory overlaps while introducing competition reforms in these sectors: railways, digital finance and tourism. One of the common issues, Dr Gokarn asserted was to provide considerable importance towards safety. While in tourism sector it is safety of the environment, it’s personal safety in railways and financial safety in case of digital finance.
The event saw participation from stakeholders from civil society, research institutions, academia, media, consultancy etc. A lively floor discussion followed the presentations. Some of the points raised by the floor included need for drastic reforms, sunset clause in regulations, systematic withdrawal of government from operations, first mover’s advantage, and introduction of public-private partnerships.
Mr. Pradeep S. Mehta, Secretary General, CUTS International mentioned in his concluding remarks that normative standards are required to ensure level playing field, address regulatory deficits and need of ‘whole of government approach’ for reforms to work for people.
For more information, please contact:
Vijay Singh, vs@cuts.org
Neha Tomar, nt@cuts.org
