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Competition Policy for India
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2 Contents Background Key Policy Objectives Present Scenario: The Policy Vacuum Need for National Competition Policy for India The Nine Principles of Competition Policy Key Elements of Competition Policy Competition Policy vis-à-vis Competition Law Countries with Competition Policy What Next? Docsity.com 5 Key Policy Objectives & requirements Sustained economic growth of 7-8% Competition, contestability intrinsic to ensuring efficiency, productivity and thereby sustained high growth Employment generation Enabling environment required to unleash creative energies of entrepreneurs, and productive forces of society Poverty eradication Well-functioning markets required to expand opportunities for the poor, and to provide value for money Inflation control Competitive pressure key to checking inflationary elements Docsity.com 6 Present Scenario: The Policy Vacuum Market-oriented economic reforms undertaken to stimulate competition and efficiency But, government policies continue to be framed and implemented without acknowledging the market process (please refer Dossier) => Achievement of policy objectives thwarted Guiding principles to formulate policies and practices in a liberalised regime - - missing => There is a lack of coherence in government policies Therefore…policy vacuum exists Docsity.com 7 Need for National Competition Policy for India To complete the process of liberalisation and deregulation by having a competition policy; To provide a declared intent to the government’s resolve of promoting competition in the market; To rationalise the role of the government, so that it’s intervention facilitates functioning of markets; To provide guiding principles to different branches of the Government for an effective competition assessment of policies and practices. Docsity.com 10 The Nine Principles of Competition Policy 7. Notification and Public justification for deviation from competition principles ‘Free Power’ policy to farmers Access Deficit Charge (ADC) to BSNL 8. Ensure transparent, predictable and participatory regulatory environment Involve stakeholders, make decisions public, etc. Practice followed by TRAI (open house discussions, consultation papers, all decisions made public) 9. Respect for international obligations Contd… Docsity.com 11 Key Elements of Competition Policy Competition Law (enacted but in limbo) Restructure & reform public monopolies (in progress) Conduct periodic ‘Competition Audit’ of all policies and regulations Reform policies, legislations and regulations that distort market process Establish effective and credible regulatory framework Docsity.com 12 Competition Policy vis-a-vis Competition Law Competition Law Competition Policy All Government Policies that affect the functioning of markets FDI Policy Trade Policy Industrial Policy Disinvestment Policy Fiscal Policy IPR Policy Labour Policy … others … Competition Policy – a broad concept that seeks to harmonise all government policies Docsity.com 15 National Policies and Related Legislations: Cross-cutting Policy Legislation National Environment Policy 2004* Environment Protection Act 1986; Water (Prevention & Control of Pollution) Act 1974; Air (Prevention & Control of Pollution) Act 1981; etc. National Consumer Policy** Consumer Protection Act 1986; Prevention of Food Adulteration Act 1954; Standards of Weights & Measures Act 1976; Bureau of Indian Standards Act 1986; etc. National Competition Policy (?) Competition Act 2002; Sectoral Regulatory laws; Intellectual Property Rights laws, etc. * Draft prepared; encompasses all existing national policies for environmental management ** under development Docsity.com 16 Countries with Competition Policy Australia National Competition Policy adopted in 1995 by federal and provincial governments throughout Australia Consists of a set of policy reforms ensuring that the same competition principles and rules apply throughout the economy Gain of 5.5% in the GDP estimated from effective implementation of competition measures (Unctad, 1997) Hong Kong Comprehensive Competition Policy Framework adopted in 1997 Government bureaus required to state competition implications of major policy submissions; and review existing regulations Docsity.com 17 Countries with Competition Policy Mexico National Programme for Economic Competition 2001-06 Cooperation mechanisms established to facilitate coordination of competition policy with industrial, regulatory, trade, and consumer protection policies Botswana Draft Competition Policy presented to Parliament Seeks to ensure coherence between Competition Policy and other Government policies and laws Fiji Uzbekistan India (?) Contd… Docsity.com