Need for Competition and Regulatory Reform in Developing Countries: Case of Indian Competition Law Enforcement

Abstract

There is no doubt that a robust competition policy and its proper enforcement through transparent competition law contributes to the growth and economic development by way of offering choices to the stakeholders, reduced prices due to reduced costs of production or otherwise (say innovation). Despite the aforesaid principle, we find that the Governments lack in promoting sustainable economic growth through competition reforms; this is more so true for the developing countries which have many more other things on the agenda (like tackling the challenges of malnutrition, poverty, unemployment, health and others) than competition. On this aspect, it is important to note that the developing countries did not realize the role an effective competition policy may play in a strong economy. While developed countries like Australia and UK have been able to map the inter-relationship between the competition law enforcement and economic / social benefits to the stakeholders, for developing countries this exercise has not been easy to carry out. There are several reasons for that, some of them include capacity building issues, institutional reforms, roles to be played by various stakeholders. India is watched by all developing countries and especially on the competition law and policy front. The Hon’ble Finance Minister in one of the ICN conferences highlighted the need for a clear competition and regulatory reform. Citing an example of telecom sector, it was pointed out “If two telecom majors are to amalgamate, will there be common turf areas between the telecom regulator and market regulator CCI. Therefore, how do you built the jurisdiction of the two. Obviously jurisdiction in this area is emerging.” While competition and regulatory reform have been on the agenda of the Government which is evident from the reports like National Competition Policy 2011 and Financial Sector Reforms Commission (FSLRC) Report, the action on these have not been yet prioritized. There is indeed a need to convince the Government both at the central and the state level towards the importance of competition and regulatory reforms in public policy discourses and also the need for competition impact assessment. The present paper focuses upon the aforesaid issues and challenges.