Need to mainstream competition in India’s economy: Rajeev Kher

KNN India, January 13, 2017

There is a need to mainstream competition in India’s economy to help it grow and to be able to deal with technological disruptions, said Rajeev Kher, former Commerce Secretary of India and Member, COMPAT.

He was speaking at a panel discussion on “Politics of Competition Reforms in India”, organised by CUTS International in the national capital on Thursday.
The panel constituted of renowned experts in the field of competition such as Allan Fels (Former Chairman, Australian Competition and Consumer Commission), Frederic Jenny (Chairman, OECD Competition Committee) and Augustine Peter (Member, Competition Commission of India).
CUTS Secretary General and a trade & competition expert, Pradeep Mehta moderated the panel, while Ashley Bell, Minister-Counsellor (Economic) of the Australian High Commission, as co-sponsors, welcomed all the guests and spoke of the importance of competiton reform in Australia.
The event saw participation from government institutions, practitioners, lawyers, academia, media, research institutions and consumer organisations.

In his opening remarks, Pradeep Mehta spoke about the impact of competition on various legislations, giving examples of the high costs associated with anti-competitive practices.
“However, the government has introduced many competition-enhancing measures such as the goods & services tax (GST), claiming it to be one of the biggest competition reforms in the country” said Mehta.
Mehta added: “Many other competition reforms and business-facilitating measures are also being promoted, but we still need a competition policy statement, which has been drafted by the Ministry of Corporate Affairs in 2011”.
“Competition is imperative for the economic and social growth of a nation, as well as to ensuring consumer welfare. After realising the benefits emanating out of healthy competition in the market, many countries, across the globe, have adopted a competition policy to their framework”, said Allan Fels.

The conversation at the panel discussion yielded important perspectives on reforming the state of competition in India, which may aid in propelling India’s growth. Owing to a level playing ground for all players, healthy competition will facilitate industrial growth and inflow of investments.
Fels also spoke highly of the GST, claiming it to be pro-competitive. He claimed that the increasing digitisation of the economy will fuel competition issues in the future. He also emphasised the need for a strong and inclusive political will to achieve competitive neutrality.

“The main roadblock to the acceptance of policy reforms, is that they are being tried to be sold as dynamic macroeconomic reforms, whereas they are needed to be sold as static microeconomic policies,” said Frederic Jenny.
Jenny asserted that effective competition law in a country may result in a rise in productivity as well as economic growth. He stated that though competition may not ensure poverty alleviation, but anti-competitive practices cause adverse impacts on the poor, who are hit the worst.
Rajeev Kher rooted for competition at the municipal level and claimed that the competition in the future will be defined by technology changes.
Finally, Augustine Peter claimed that many of the existing policies and regulations are the biggest obstacles to a healthy competition. He spoke about the proposal of CCI to carry out competition impact assessments of such policies using the OECD and CUTS toolkits.
The discussion was followed by a round of questions from the participants, which made the session information rich. “Owing to the advent of disruptive technologies, it is critical to ensure competitive neutrality, so as to realise the advantages of the newer models, while optimising the benefits of the former. This may only be achieved through devising optimum policies and regulations, assisted by a strong and dedicated political will”, said Mehta.
Dr Arvind Mayaram, former Finance Secretary of India and Chairman, CUTS Institute for Regulation & Competition, proposed the vote of thanks and spoke about the way forward, stressing on how the Government should mainstream competition in its economic policy making.

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