The Hindu Business Line : `Encourage competition through policy framework'

CREATING a level playing field and encouraging competition through a policy framework would ensure all round development across segments as opposed to focussed sectoral developments and efforts to attracting foreign direct investments (FDI).

At an interactive meeting organised here on `Functional competition policy for India', experts drawn from various sectors, academicians and bureaucrats, expressed the need to create a level playing field that is transparent.

CUTS Centre for Competition, Investment and Economic Reforms (C-CIER), has undertaken a project to chart out a functional competition policy christened the "FunComp Project" that attempts to fill this gap and help the Government come up with a comprehensive competition policy.

India does not have a competition policy but has a competition law, first in the form of the Monopolies and Restrictive Trade Practices (MRTP) Act, 1969 and now the recently enacted Competition Act, 2002. Concerns have been expressed that a lack of awareness about competition policy, and the nature and extent of prevalence of different types of anti-competitive practices in India will pose a major challenge in attracting investments. This effort assumes importance with India seeking to incorporate this in the WTO Ministerial agenda.

The Adviser, Planning Commission, Mr Shrawan Nigam, said that in many instances including the telecom sector, major incumbents are seen to be influencing the policy changes, which affect the businesses of large number of players. However, the telecom sector has seen major reforms, but has taken quite a long time. In the case of the petroleum sector, it has seen the exclusion of any significant overseas investments.

"A well drawn out competition policy would ensure that risk would not be confined to public sector units and profit restricted to or confined to private sector. While minimum level of assurance that there would be level playing field should be followed at any cost, in India, for instance, in some sectors entry has been made easy while exit is extremely difficult. This is anti-competitive," Mr Nigam said.

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