‘India needs separate regulations to address issues on control of markets’

India needs to frame tailor-made regulations to separately address the problems around control of markets for products, instead of addressing them through regulations on control over enterprises, MS Sahoo, Chairman, Insolvency and Bankruptcy Board of India, has said.

The regulatory framework should address the concerns relating to control over market directly, rather than control over enterprises, he said at the 6th National Summit on Mergers & Acquisitions, organised by Assocham here.

“Today, we want to address the control over markets through the control over enterprises. This is not the right approach. Regulatory framework must be target-oriented and should not do more than what is required,” he later told BusinessLine .

In the current set-up, to decide whether there is any control of market of products, it is first ascertained as to whether there has been any control of enterprises and if this had any appreciable adverse impact on competition. For instance, ride-hailing cab aggregator Uber may have control over the market, but it cannot be tried under competition law in the Indian set-up, as there has been no control of enterprises to achieve this market position, say experts.

Sahoo also highlighted an interesting aspect to buttress his viewpoint. If one were to look at the annual report of Competition Commission of India, there were 400 cases that made applications seeking CCI approval for merger. Of this, only five were finally determined to have any appreciable adverse effect on competition.

This may also have some learnings, as regards the aspect of ‘ease of doing business’. Imagine the time that would have been saved by enterprises given that each application had wait time of at least say a month, say economy watchers. So Sahoo’s suggestion is to have separate regulations to address concerns over control of markets for products and the concerns over control over enterprises.

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