Need to adopt National Competition Policy, which is need of the hour”: Ashok Chawla, Chairman, Competition Commission of India

New Delhi, India, October 11, 2013“When we have a law? Then why do we need a policy? If at all, the policy should have come before the law? So why discuss about the need for Competition Policy for India?” said Ashok Chawla, Chairman, Competition Commission of India.

Chawla was speaking at a seminar on “National Competition Policy; Second Big Wave of Reforms”, organised by CUTS International at Delhi on 10th October.

Chawla emphasised that the competition law is an essential tool for enforcement against anti-competitive practices but the policy is much larger. It is important for countries such as India, where States play a major role in the economic sectors and the policy paradigm in the liberalised still tilts towards State control, it is important to adopt National Competition Policy (NCP) for India.

According to Mr Chawla, the competition policy is important to tackle entry barriers that are inbuilt in the system and leads to more robust economic welfare and provide governance to the country.

However, there are challenges to adopt the NCP and the reasons are not difficult to seek, because the baggage that we are carrying i.e. policies prior to 1991 have been institutionalised and it is difficult to demolish such institutions. Thus, we need independent agencies to review such policies to make them competition compliant and more relevant for today’s time.

Arun Maira, Member, 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 of India is attempting at the moment.

Maira emphasised the need for minimal number of rules/regulations, while referring to regulatory burden and cost of doing business in India. He also mentioned that in order to improve the quality of coordination and implementation of the Plan, they have constituted the Indian Backbone Implementation Network (IBIN).

IBIN proposes to deal with contentious issues through a wide consensus building approach. Maira added that many policy reforms do not happen because of confusion and ignorance, and therefore the need to use innovative tools to move the reforms agenda forward.

Speaking earlier, Pradeep S Mehta, Secretary General of CUTS informed that the government has shown interest in developing a competition culture in the country, by kick-starting the development and adoption of a National Competition Policy (NCP). Many countries have adopted such policies which has resulted in higher growth and thus public welfare enhanced.

He also invited attention to the resolve of the Minister of Corporate Affairs, Sachin Pilot, who has been advocating for the adoption of the NCP at many platforms, including while delivering the CCI Annual Day lecture in May, 2013.

Mehta gave an overview of a recent study that CUTS has undertaken to highlight issues that have implications for evolving a level-playing field in three key sectors of the economy: pharmaceuticals, electricity and agriculture product marketing.

The CUTS study advocates for certain interventions that can help remove competition distortions that exist in some of these markets, thereby helping derive benefits from these markets for producers and consumers.

This current CUTS research is a sequel to a series of research studies that had been undertaken for the Ministry of Corporate Affairs (Government of India) in certain key sectors to assess policy impediments to competition in them.

Andrew Soper representing British High Commission, New Delhi, which has supported this study, indicated that their interest in this project and specifically in the competition reforms agenda stems from their interest on trade and investment issues as part of the larger economic reforms agenda.

Soper added that UK firms are increasingly interested in India from a trade and investment perspective, and hence it was necessary for British High Commission to get a better understanding of the prevailing business environment in some of these key sectors.

According to Dhanendra Kumar, Chairman, Ministry of Corporate Affairs’ Committee on National Competition Policy and allied matters, and Principal Adviser of the Indian Institute of Corporate Affairs said that it is necessary to proactively promote competition in the Indian economy.

He stressed that, while competition in markets will be monitored by the CCI, 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.

Dr Pronab Sen, Chairman, National Statistical Commission shared his experience from the Planning Commission days where he had worked as Principal Adviser. He said that a strong recommendation to adopt a Competition Policy was made in the 9th Plan and reiterated in 10th and 11th Plan documents, but it is languishing because policy makers do not want to adopt full market reforms in India.

In the following panel discussion comprising of representatives of MSME’s, Chambers of Commerce such as ASSOCHAM, PHD Chamber of Commerce & FISME, CCI and all the relevant speakers were of the opinion that there is a need to adopt NCP for India. One important point was raised with reference to the need for tailoring the application of the NCP in specific sectors in India.

There were over 50 participants in the seminar, drawn from the government, academia, regulatory agency, media, business and civil society. The purpose of this seminar was to gather comments/feedback from key participants on the need for adoption of NCP in India.

Post the seminar, CUTS International would prepare a ‘Memorandum on the need for NCP in India’ to be submitted to Ministry of Corporate Affairs (MoCA), followed by three advocacy seminars at State levels to increase awareness on issues pertaining to NCP.
The author is secretary general of CUTS International

For more information, please contact:
Udai S Mehta, +91-98292-85926,