Over 500 acts, policies to come under scanner

Financial Chronicle, December 23, 2009

500 government acts, legislations and policy initiatives may come under scrutiny if the government accepts a Competition Commission (CCI) proposal that seeks review of all legislations to check monopoly and cartelisation. This proposal is part of the Planning Commission initiative to draw up a national competition policy.

“We are looking at adopting the Australian model. The competition appellate body there had proposed a competition audit of over 1,700 acts and regulations,” a CCI official said on conditions of anonymity.

Secretary general of CUTS International, Pradeep S Mehta told Financial Chronicle, “Policies with potential anti-competitive outcomes could be the Motor Vehicle Act, the purchase preference given to state-owned companies and anti-dumping policies followed by the government.” The Motor Vehicle Act restricts inter-state carriage to only state transport undertakings. “This created a big black market hindering competition,” Mehta said.

CUTS International is an independent body that looks into issues involving competition practices in India. In 1995, the Australian government ordered a review of all acts and regulations. This was proposed by the Australian Competition and Consumer Commission to strengthen competition laws. “Over the next one year, overall GDP of Australia increased,” the official said.

Estimates given by the Australian Commission said that GDP in Australia would increase by 5.5 per cent and households could benefit up to $1,500 per year if phasing out anti-competition laws was done properly. “It has been a huge success in Australia. We hope it can do the same in India,” the CCI official said.

Arun Maira, member of the Planning Commission, told Financial Chronicle that the CCI had approached them with suggestions. He, however, refused to elaborate.

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