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Economic Reforms & Competition Regime

Benefits of Competition

The Competition Act, 2002

National Competition Policy

Going Forward

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Scheme of Presentation

1991 – heralded unshackling of Indian Economy, unleashing competitive spirit of Indian entrepreneurs, raising growth

A series of reforms ensued-in trade, industry, licensing, monetary and fiscal policies, etc

Competition Act 2002 – however, enforcement commenced in May 2009

Reforms – a continuing process – still on

Now National Competition Policy on anvil.

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Competition Act – lays the legal framework, Competition Commission to enforce it.

Competition Commission of India - fully functional with enforcement, in May 2009

Section 3 (agreements) and 4 (abuse of dominance) notified in May 2009

Section 5 and 6 (mergers and acquisitions) notified in March 2011, effective 1st June 2011, and Regulations after consultations also notified.

CCI also undertakes Competition Advocacy

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Competition Ushers Static and Dynamic Efficiency

Competitive Markets

Enhanced productivity, Innovation

Higher Economic Growth

Wider Choice, Better Quality, Lower Prices

of products/servc

es

Fruits of Growth

reach the Aam Admi

Higher Purchasing

Power

Competition Laws and

Policy

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Competition Policy – an overarching policy framework to infuse competition principles across Government measures, statutes etc.

More positive and proactive Relatable more to Govt. Departments/ PSUs,

encourages them to adopt competition principles, correct policies with anti-competitive outcomes.

Committee on National Competition Policy Report submitted to Govt, after consultations

with stakeholders- now under process

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Competition Policy means an overarching set of Government policies,measures,statutes and regulations, including a Competition Law, aimed at promoting competitive market structure in economy

As Raghavan Committee observed “Competition Law must emerge out of a National Competition Policy”

While Law enacted, Policy under formulation.

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◦ Promote competition - optimize efficiency – review government policies to check anti-competitive outcomes

◦ Promote economic democracy, restrict rent seeking practices, efficiency in public procurements

◦ Strive for development of markets, and a single national market as fragmented markets impede competition

◦ Ensure wider choices and better quality of goods and services

◦ Synergized relationship among sectoral regulators and/or CCI and prevent jurisdictional grid-locks

◦ Build strong competition culture amongst stakeholders - public officials, business, trade associations, consumers associations.

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Review all existing and new Acts/ regulations/ policies, correct where anti-competitive outcomes noticed, and proactively promote competition principles.

Separate policy making, regulations and operations

Competitive neutrality and level playing field

Third party access to ‘essential facilities’

Create institutional mechanism for coordination among CCI and sectoral regulators, tweak Acts, where needed.

Work towards promotion of competition in market place, and development of a single national market

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◦ The draft NCP is under active consideration of the Govt, consultations with State Govts is on. Thereafter, may be taken to the Cabinet.

◦ Meanwhile, a series of reforms are on, or under process in various Ministries - common thread of promoting competition running through them:-

∙ Interests rates – RBI allowed banks to fix their saving interest rates, in Oct 2011 ∙ UID to all citizens- enhanced efficiency and transparency in distribution of subsidy

∙ National Manufacturing Policy notified in Oct 2011 – will generate 100 million jobs

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∙ Drafts of National Telecom Policy 2011, National Policy on Information Technology 2011 & National Policy on Electronics unveiled for consultation. ∙ Companies Bill- likely to be

introduced soon ∙ FDI in multi-brand retail sector- under consideration

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∙ Real Estate- Draft Real Estate (Regulation & Development) Bill, 2011- consideration ∙ Land Acquisition Bill- consideration ∙ Public Procurement Law- consideration ∙ FDI in Civil Aviation sector- consideration ∙ Direct Taxation- Bill introduced in 2010- with Standing Committee ∙ Indirect Taxation- Constitution Amendment Bill introduced- uniform tax structure- GST

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National Competition Policy, when adopted will usher in the second wave of reforms, as it envisages review of all existing and proposed statutes, regulations, policies and procedures to usher in greater competition and promote markets and choices for consumers

In other countries, like in Australia, Mexico and elsewhere, it boosted National GDP. Can help in bringing down prices, controlling inflation and creation of jobs.

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Thank you

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