Competition policy is essential for any economy in transition as it complements other liberalising initiatives. However, the scope, sequencing and timing of competition and other policies have to be determined by each economy according to its own compulsions and needs. Like other countries, India will have to explicitly take into account it’s historical and the socio-economic context while contemplating competition policy reforms. The objectives of competition policy in India- being the creation of an active competitive environment- are to aid and abet the process of creating globally competitive firms with enhanced investment and technological capabilities. To achieve these objectives, the government will need to play a proactive role. The analysis in the paper strongly suggests that significant efforts are required at the policy level to explicitly recognize the links between policies relating to competition, trade and investment on the one hand and macroeconomic policy initiatives on the other. Rather than restricting to issues conventionally covered by competition law, the paper considers, as part of competition policy, all those policy instruments that impinge on the promotion of competition in markets. The formulation and implementation of an effective competition policy in the current context is a difficult task as it needs to be consistent with other policies which are transforming India into a liberal open economy. Due to contextual and other differences, no single institutional model is applicable everywhere. While such differences will remain, certain basic principles in institution building like independence of the competition agency, adequate resource availability, significant analytical skills and transparency of its actions would be crucial for deterring anti-competitive behaviour in all countries.
Competition Policy In India: Issues For A Globalising Economy
Author : Sebastian Morris, Rakesh Basant