Building “Friends of Competition” in India Competition Law and Competition Policy

1. Building “Friends of Competition” in India • Competition Law and Competition Policy • A presentation by Dhanendra Kumar Chairman, Committee for National Competition Policy New Delhi, 24th November 2011

2. Scheme of Presentation • Economic Reforms & Competition Regime • Benefits of Competition • The Competition Act, 2002 • National Competition Policy • Going Forward

3. Measures of Reforms • 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.

4. Competition Law • 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

5. BENEFITS – HOW ECONOMY BENEFITS Competition Ushers Static and Dynamic Efficiency Enhanced productivity, Innovation Higher Economic Growth Competition Laws and Policy Competitive Markets Higher Purchasing Power Fruits of Growth reach the AamAdmi Wider Choice, Better Quality, Lower Prices of products/servces

6. BENEFITS TO KEY STAKEHOLDERS

7. National Competition Policy • 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

8. Difference between Law and Policy • 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.

9. Objectives of Draft NCP • 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.

10. Salient Features of Draft NCP • 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

11. Goingforward • 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

12. Going forward..contd ∙ 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

13. Going forward.. contd ∙ 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

14. Conclusion • 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.

15. Thank you