Competitive Policy

in
India
Competition
 Competition is a situation in market, in which
sellers independently strive for buyer’s
patronage to achieve business objectives.
Competition offers wide array of choices to
consumers at reasonable prices, stimulates
innovation and productivity, and leads to
optimum allocation of resources.
National Competition Policy (India)
 National Competition Policy is formulated by
the Government of India with a view to achieve highest
sustainable levels of economic growth,
entrepreneurship, employment, higher standards of
living for citizens, protect economic rights for just,
equitable, inclusive and sustainable economic and social
development, promote economic democracy and
support good governance by restricting rent-
seeking practices.
Objectives of National Competition Policy

 To guarantee consumer welfare by encouraging optimal allocation

of resources and granting economic agents appropriate incentives
to pursue productive efficiency, quality and innovation

 To remove anti-competition outcome of existing acts, harmonize

laws and policies of Centre and State and proactively promote
competition principles

 Strive for single national market.

 Establish a level playing field by providing competitive neutrality.

 MRTP Act
 The Monopolies and Restrictive Trade Practices Act (MRTP
Act) was passed by Parliament of India on 18 December
1969 and got president’s assent on December 27, 1969,.
But it came into force from June 1, 1970.

 This act is not in force in India currently as it was repealed

and was replaced by Competition Act 2002 with effect
from September 1, 2009. The MRTP commission was
replaced by Competition Commission of India.
 Objectives of MRTP
 To ensure that the operation of the economic
system does not result in the concentration of
economic power in hands of few rich.

 To provide for the control of monopolies.

 To prohibit monopolistic and restrictive trade

practices.
Competition Commission of India

 Competition Commission of India (CCI) is a

statutory body of the Government of
India responsible for enforcing The Competition
Act, 2002 throughout India and to prevent
activities that have an appreciable adverse effect
on competition in India. It was established on 14
October 2003.
The Competition Act, 2002
 The Competition Act, 2002, as amended by the
Competition (Amendment) Act, 2007, follows the
philosophy of modern competition laws. The Act
prohibits anti-competitive agreements, abuse of
dominant position by enterprises and regulates
combinations (acquisition, acquiring of control and
M&A), which causes or likely to cause an appreciable
adverse effect on competition within India.
Objectives of Competition Act
To achieve its objectives, the Competition Commission of India endeavours to do
the following:
 Make the markets work for the benefit and welfare of consumers.
 Ensure fair and healthy competition in economic activities in the country for faster
and inclusive growth and development of economy.
 Implement competition policies with an aim to effectuate the most efficient
utilisation of economic resources.
 Develop and nurture effective relations and interactions with sectoral regulators to
ensure smooth alignment of sectoral regulatory laws in tandem with the
competition law.
 Effectively carry out competition advocacy and spread the information on benefits
of competition among all stakeholders to establish and nurture competition culture
in Indian economy.
Competition Law Vs Competition Policy

 Competition law and competition policy are distinct concepts.

Competition law is a subset of competition policy. Competition
policy essentially entails:
 Competition law prohibiting anti-competitive conduct by
businesses
 Sectoral regulatory laws to check situations where market fails
 Government policies such as liberalised trade policy, relaxed
foreign investment and ownership requirements and regulatory
reforms that enhance competition in local and national markets