New national competition policy on the anvil

Business Standard, November 19, 2010

India would soon have a national competition policy that defines the larger landscape within which the country’s competition laws would function, Corporate Affairs Minister Salman Khurshid said.

The policy would be prepared in consultation with the Planning Commission and the Prime Minister’s Office, he added.

Speaking at a conference on “Global Competition Law” organised by the Centre for Law, Economics and Society here today, Khurshid said the larger policy framework would be essential after the ministry amended the current competition law to turn merger and acquisition scrutiny more industry-friendly.

The Centre was expected to introduce the amendment to competition law and also notify the merger and acquisition rules under Section 5 and 6 of the Competition Act soon, he said.

Law Minister Veerappa Moily said the “competition policy” should address the concerns of the small and medium industries on the impact of competition laws on heir businesses.

Referring to the Organisation of Economic Cooperation and Development’s (OECD)’s internationally accepted definitions of competition regulations, Moily said similar categorizations could help reduce conflicts of interests in competition rules.

Senior government officials said the policy would define the government’s approach towards competition at various levels, especially the ones involving international acquisitions and mergers in sensitive sectors such as drug manufacturing or the defense sector.

Incidentally, the Planning Commission had in 2007 commissioned a working group to prepare a report on the Competition Policy. The group, headed by Vinod Dhall, a former member of the Competition Commission of India (CCI), had made its recommendations for a comprehensive policy framework based on international practices.

One of the terms of reference for the group was to recommend ways of enhancing the role of competition and competitive markets in the government’s policymaking at the central and state levels and to advise on the most effective and workable institutional mechanism for a synergized relationship between sectoral regulators and CCI.

Pradeep S Mehta, secretary general of civil society organization Consumer Unity and Trust Society and a member of the Planning Commission working group, said the document provided by them would form the basis of the current discussion for a national competition policy.

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