labour law rough draft

8/10/2019 Labour Law Rough Draft

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COMPETITION POLICY AND ITS IMPACT ON THE INDIAN INDUSTRY: A

CRITIQUE

LABOUR LAW I

SUBMITTED TO: DR. T RAGHAVENDRA RAO

SUBMITTED BY

PRANAV MENON

2009 - 46

NALSAR UNIVERSITY OF LAW, HYDERABAD.


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Competition Policy And Its Impact On The Indian Industry: A Critique

T ABLE O F C ONTENTS

INTRODUCTION ...................................................................................................................3

R ESEARCH M ETHODOLOGY ...............................................................................................6

R ESEARCH P LAN .................................................................................................................6

C OMPETITION P OLICY IN I NDIA PRE 99 S CENARIO .....................................................!

C OMPETITION P OLICY POST 99 S CENARIO .................................................................. 0

POSITIVE I MPACTS ON THE I NDIAN I NDUSTRY ............................................................... "

C RITICISMS AND SUGGESTIONS IN THE LIGHT OF THE NE# C OMPETITION POLICY . . $

C ONCLUSION AND ANALYSIS ............................................................................................22

BIBLIOGRAPHY ..................................................................................................................26

2


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INTRODUCTION

Over the past one and a half decade the overall approach to econo!"c !ana#e!ent "n

Ind"a has $een rev"sed to%ards #reater !ar&et or"entat"on' W"de(ran#"n# econo!"c

refor! !eas)res have $een )nderta&en %"th the #overn!ent ass)!"n# the role of a

fac"l"tator rather than a controller' Econo!"c refor!s have $een )nderta&en "n pol"c"es

relat"n# to "nd)str"al l"cens"n# fore"#n trade fore"#n "nvest!ent technolo#* "!ports

#overn!ent !onopol"es and o%nersh"p f"nanc"al sector etc' + Underl*"n# these refor!s "s

a rene%ed conf"dence that !ar&et forces and the "nd"v"d)al dec"s"ons of cons)!ers and

$)s"nesses can !a&e a #reater contr"$)t"on to econo!"c and soc"al develop!ent than an

"n%ard(loo&"n# central",ed econo!"c s*ste!' The thr)st of the econo!"c refor!s has

$een to allo% for !ore co!pet"t"on'

The past fe% *ears have $een challen#"n# for the econo!* and for $)s"nesses %orld over

!a&"n# the tas& of pol"c* !a&ers even !ore da)nt"n#' Ind"a "n the p)rs)"t of

#lo$al",at"on responded $* open"n# )p "ts econo!* $* re!ov"n# controls and resort"n# to

l"$eral",at"on' In the l"#ht of th"s the o$v"o)s need of the ho)r %as that the Ind"an !ar&et

$e #eared to face co!pet"t"on fro! %"th"n the co)ntr* and o)ts"de' The f"nanc"al cr"s"s

%h"ch #r"pped %orld stren#thened the need and h"#hl"#hted the "!portance of a stron#

and effect"ve co!pet"t"on pol"c* a pol"c* %h"ch %o)ld enco)ra#e !ar&ets to %or& %ell

for the $enef"t of $)s"ness and cons)!ers there$* "ncreas"n# the co)ntr*-s econo!"c

f"tness: !ar&ets character",ed $* effect"ve co!pet"t"on !a&es f"r!s "nnovate !ore &eep

pr"ces do%n for cons)!ers and "!proved total factor prod)ct"v"t* dr"ves econo!"c

#ro%th' These factors are all the !ore relevant #"ven the f"nanc"al challen#es faced $* the

co)ntr*' It "s clear that )lt"!atel* the %a* o)t of th"s cr"s"s . for the f"nanc"al sector and

the %"der econo!* . l"es %"th co!pet"t"ve !ar&ets $ac&ed )p $* a ro$)st co!pet"t"on

pol"c*'

+ /ohn 0reston 1I!ple!ent"n# o!pet"t"on 0ol"c* "n Develop"n# o)ntr"es: The Role of Donors3 at%%%'$)s"nessenv"ron!ent'or #4d*n4$e4'''4Sess"on5'6 0reston Doc'pdf

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In recent t"!es there has $een %"de(spread adopt"on of o!pet"t"on La%s aro)nd the

%orld so !)ch so that "t !a* $e called a 1co!pet"t"on la% sp"ll3' 2 Th)s %hat )sed to $e

a feat)re str"ctl* character"st"c to a fe% h"#hl* "nd)str"al"sed and developed nat"ons has

$eco!e a feat)re eas"l* fo)nd "n !an* 7)r"sd"ct"ons of the %orld' It "s &e* factor for the

econo!"c develop!ent of an* co)ntr*' o!pet"t"on "s a !echan"s! that helps !ore

prod)ct"ve and eff"c"ent co!pan"es e8pand and ta&e !ar&et share fro! less prod)ct"ve

ones %h"ch e"ther #o o)t of $)s"ness or $eco!e !ore eff"c"ent' 5 When 9overn!ent

pol"c"es l"!"t co!pet"t"on even )n"ntent"onall* econo!"c #ro%th slo%s and nat"ons

re!a"n poor'

o!pet"t"on pol"c* "s def"ned as those #overn!ent !eas)res that affect the $ehav"or of

enterpr"ses and str)ct)re of the "nd)str* %"th a v"e% to pro!ot"n# eff"c"enc* and

!a8"!","n# cons)!er or soc"al %elfare' The Ra#havan o!!"ttee had o$served that

1 o!pet"t"on la% !)st e!er#e o)t of a nat"onal co!pet"t"on pol"c* %h"ch !)st $e

evolved to serve the $as"c #oals of econo!"c refor!s $* $)"ld"n# a co!pet"t"ve !ar&et

econo!*'3 The World Trade Or#an"sat"on WTO; def"nes co!pet"t"on pol"c* as: 1the f)ll

ran#e of !eas)res that !a* $e )sed to pro!ote co!pet"t"ve !ar&et str)ct)res and

$ehav"o)r "ncl)d"n# $)t not l"!"ted to a co!prehens"ve co!pet"t"on la% deal"n# %"th

ant"(co!pet"t"ve pract"ces of enterpr"ses3 ' 6 World Ban& also prov"des a def"n"t"on of

co!pet"t"on pol"c* as: 1#overn!ent !eas)res that d"rectl* affect the $ehav"o)r of

enterpr"ses and the str)ct)re of "nd)str*' An appropr"ate co!pet"t"on pol"c* "ncl)des $oth:

a; pol"c"es that enhance co!pet"t"on "n local and nat"onal !ar&ets and $; co!pet"t"on

la% also referred to as ant"tr)st or ant"!onopol* la%'3

There are t%o co!ponents of a co!prehens"ve co!pet"t"on pol"c*' < The f"rst "nvolves

p)tt"n# "n place a set of pol"c"es that enhance co!pet"t"on or co!pet"t"ve o)tco!es "n the

2 0radeep S and Man"sh A#ar%al T"!e for a =)nct"onal o!pet"t"ve 0ol"c* and La% "n Ind"a UTSInternat"onal /an)ar* 2>>?'5 Bhattachar7ea Ad"t*a 1The ase for a M)lt"lateral A#ree!ent on o!pet"t"on 0ol"c*: A Develop"n#

o)ntr* 0erspect"ve3 @ /' Int l Econ' L' 2@56 Draft at"onal o!pet"t"on 0ol"c* 2>++'>C'2< U TAD % &O$7ect"ves of co!pet"t"on la% and pol"c*: To%ards a coherent strate#* for pro!ot"n#co!pet"t"on and develop!ent3http:44%%%'f"as'net4"fce8t4f"as'nsf4Attach!entsB*T"tle4 onferences o!pet"t"on0ol"c*Tan, FassanGHa a*a'prn'pdf4 '

6
http://www.fias.net/ifcext/fias.nsf/AttachmentsByTitle/Conferences_CompetitionPolicyTanz_Hassan+Qaqaya.prn.pdf/http://www.fias.net/ifcext/fias.nsf/AttachmentsByTitle/Conferences_CompetitionPolicyTanz_Hassan+Qaqaya.prn.pdf/http://www.fias.net/ifcext/fias.nsf/AttachmentsByTitle/Conferences_CompetitionPolicyTanz_Hassan+Qaqaya.prn.pdf/http://www.fias.net/ifcext/fias.nsf/AttachmentsByTitle/Conferences_CompetitionPolicyTanz_Hassan+Qaqaya.prn.pdf/


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!ar&ets s)ch as rela8ed "nd)str"al pol"c* l"$eral",ed trade pol"c* conven"ent entr* and

e8"t cond"t"ons red)ced controls and #reater rel"ance on !ar&et forces' The other

co!ponent of co!pet"t"on pol"c* "s a la% and "ts effect"ve "!ple!entat"on to proh"$"t ant"

co!pet"t"ve $ehav"or $* $)s"nesses to proh"$"t a$)s"ve cond)ct $* do!"nant enterpr"se

to re#)late potent"all* ant" co!pet"t"ve !er#ers and to !"n"!",e )n%arranted #overn!ent

or re#)lator* controls' Increas"n# n)!$er of co)ntr"es !"#rat"n# to co!pet"t"on or"ented

pol"c"es' It "s the fo)ndat"on of eff"c"entl* %or&"n# !ar&et s*ste!' It !a8"!",es

cons)!er %elfare %h"ch "s "ts )lt"!ate raison detre $* lo%er"n# pr"ces prov"d"n# for

%"der cho"ces and $etter serv"ces' It acts as a redressal a#a"nst e8plo"tat"on and

accelerates econo!"c #ro%th %"th h"#her eff"c"enc* and prod)ct"v"t*' It f)rthers

"nnovat"on and d*na!"c eff"c"enc*' =or "nd)str"es and enterpr"ses "t prov"des for a level

pla*"n# f"eld redressal a#a"nst ant"(co!pet"t"ve pract"ces follo%ed $* other $od"es'

The J "ne 0r"nc"ples- of Ind"a-s o!pet"t"on 0ol"c* ? are:

I' =oster o!pet"t"ve e)tral"t* $et%een p)$l"c and pr"vate sector enterpr"ses

II' Ens)re Access to Essent"al =ac"l"t"es

III' =ac"l"tate eas* !ove!ent of #oods serv"ces and cap"tal

IK' Separate pol"c*(!a&"n# re#)lat"on and operat"on f)nct"ons

K' Ens)re free and fa"r !ar&et process

KI' Balance co!pet"t"on and Intellect)al 0ropert* R"#hts I0Rs;

KII' Ens)re transparent pred"cta$le and part"c"pator* re#)lator* env"ron!ent

KIII' ot"f* and p)$l"cl* 7)st"f* dev"at"on fro! co!pet"t"on pr"nc"ples

I ' Respect for "nternat"onal o$l"#at"ons

? %%%'co!pet"t"onco!!"ss"on'#ov'"n


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R'(')*+, M' , / 1

The researcher has adopted the doctr"nal for! of research "n co!plet"n# th"s pro7ect' As

the pro7ect "s pr"!ar"l* st)d* of the lead"n# )est"ons the doctr"nal for! of research %as

!ost appropr"ate' 0r"!ar* as %ell as secondar* so)rces of "nfor!at"on have $een )sedfro! the ALSAR La% L"$rar*' The a$ove cate#or* of !ater"al cons"sts of 7o)rnals

$oo&s and co!!entar"es on the sa"d top"c %r"tten $* e!"nent a)thors' Also secondar*

soft cop* so)rces of "nfor!at"on have $een per)sed fro! onl"ne data$ases s)ch as 7stor

!an)patra le#al serv"ces "nd"a etc'

R'(')*+, P )

Thro)#h th"s pro7ect the researcher a"!s to prov"de the reader %"th a deta"led overv"e% of

the co!pet"t"on pol"c* of Ind"a' The researcher has caref)ll* scr)t"n",ed the co!pet"t"onla% "n Ind"a pr"or to the +@@+ refor!s and post refor!s as %ell as the o!pet"t"on Act

2>>2' The researcher has also anal*sed the pos"t"ves and cr"t"c"s!s of the pol"c"es and

presented s)##est"ons for an "!proved pol"c*'

?


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C OMPETITION P OLICY IN I NDIA PRE 99 S CENARIO

In Ind"a protect"on and controls are $e"n# replaced $* a co!pet"t"ve and de(re#)lated

open econo!"c s*ste!' The scenar"o $efore the n"net"es Ind"a adopted a planned

econo!"c develop!ent !odel' The $road pol"c* o$7ect"ves %ere develop!ent of a lar#e

"nd)str"al $ase %"th a v"e% to ach"eve self rel"ance and pro!ot"on of soc"al 7)st"ce' The

pol"c* "nstr)!ents )sed to ach"eve these o$7ect"ves %ere controll"n# the pattern of

"nvest!ent "nd)str"al l"cens"n# creat"on of lar#e p)$l"c sector control of )t"l",at"on of

fore"#n e8chan#e restr"ct"n# the #ro%th of pr"vate sector s"nce entr* e8"t of f"r!s %ere

restr"cted "nd)str"al plant s",es deter!"ned $* 9overn!ent pol"c*' C

W"th re#ard to the "nd)str"al pol"c* per se the p)$l"c sector %as protected fro!co!pet"t"on thro)#h reservat"on' Ind)str"al pol"c"es !andated that $oth central

#overn!ent depart!ents p)$l"c sector enterpr"ses shall appl* pr"ce and p)rchase

preference "n favo)r of p)$l"c sector' Several l"cens"n# other restr"ct"ons %ere placed

s)ch as the Ind)str"al Develop!ent Re#)lat"on; Act +@> Ra&esh Basant Se$ast"an Morr"s o!pet"t"on 0ol"c* of Ind"a: Iss)es for a 9lo$al"s"n# econo!*

Econo!"c and 0ol"t"cal Wee&l* /)l* 2@ 2>>>'

C


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)ant"tat"ve restr"ct"ons s)ch as one on =ore"#n D"rect Invest!ent =DI;' There %as no

place for a co!pet"t"on pol"c*'

Ind"a has had a co!pet"t"on la%: the Monopol"es Restr"ct"ve Trade 0ract"ces MRT0;

Act s"nce +@?@' The Act %as enacted to prevent concentrat"on of econo!"c po%ercontrol !onopol"es and proh"$"t !onopol"st"c and restr"ct"ve trade pract"ces' @ Unfa"r

trade pract"ces a cons)!er protect"on prov"s"on cover"n# decept"on !"slead"n# cla"!s

and advert"s"n# etc %as $ro)#ht "n thro)#h an a!end!ent "n +@ 6' Fo%ever the MRT0

Act d"d not del"ver as e8pected' Th"s %as partl* $eca)se the Act %as created at a t"!e

%hen all the process attr"$)tes of co!pet"t"on s)ch as entr* pr"ce scale locat"on etc

%ere re#)lated' The MRT0 had no "nfl)ence over these attr"$)tes of co!pet"t"on as

these %ere part of a separate set of pol"c"es' Another reason for "ts "nade )ac* "n deal"n#

%"th ant"(co!pet"t"ve pract"ces %as the a$sence of proper def"n"t"ons "n the Act' A per)sal

of the MRT0 Act %"ll sho% that there "s ne"ther def"n"t"on nor even a !ent"on of certa"n

offend"n# trade pract"ces %h"ch are restr"ct"ve "n character' So!e of the ant"(co!pet"t"ve

pract"ces s)ch as a$)se of do!"nance cartels predator* pr"c"n# and $"d(r"##"n# %ere not

spec"f"call* !ent"oned "n the Act' +> The MRT0 %as also )na$le to ta&e an* act"on

a#a"nst an* of the "nternat"onal cartels that attracted the attent"on of other co!pet"t"on

a)thor"t"es' A &e* reason for the "neffect"veness of the MRT0 %as that "t %as poorl*

reso)rced' The "nade )ac* of the $)d#et allocat"on %as co!po)nded $* the need for the

MRT0 to see& #overn!ent-s per!"ss"on to "nc)r e8pend"t)re $e*ond certa"n l"!"ts' Th"s

severel* c)rta"led "ts "ndependent f)nct"on"n#' The "ndependence of the MRT0 #ot

f)rther "!pa"red d)e to the d"scret"onar* po%er of the #overn!ent to appo"nt sen"or level

off"cers'

The conse )ences of these trad"t"onal"st soc"al"st pol"c"es %ere adverse' There %ere

dela*s "n dec"s"on !a&"n# h"#h ad!"n"strat"ve costs and "neff"c"ent cho"ces of scale

locat"ons and technolo#"es' Th"s %as detr"!ental to econo!"c eff"c"enc* prod)ct"v"t*

and res)lted "nto a non(co!pet"t"ve and h"#h cost "nd)str"al str)ct)re' The a$sence of

do!est"c co!pet"t"on %"th protect"on fro! "!ports led to "neff"c"ent do!est"c pr"vate

@ 0radeep S and Man"sh A#ar%al T"!e for a =)nct"onal o!pet"t"ve 0ol"c* and La% "n Ind"a UTSInternat"onal /an)ar* 2>>?'+> R' Sh*a! Nhe!an" 1Interface $et%een o!pet"t"on and Trade 0ol"c"es3 25 Int-l B)s' La% 6 + +@@


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sector $es"des $loc&"n# technolo#"cal advance!ent' Th"s res)lted "nto creat"n# a techn"cal

"nfer"or"t* %"th the rest of the %orld' The "n"t"al #ro%th "n "nd)str"al sector C'+ ; t"ll

+@?


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C OMPETITION P OLICY POST 99 S CENARIO

Fo%ever %hen there %as a chan#e "n "nd)str"al pol"c* "n +@@+ the follo%"n# chan#es

%ere )shered "n s)ch as a$ol"t"on of l"censes for "nd)str"es a$ol"t"on of !onopol* of

p)$l"c sector e8cept those "n defence strate#"c areas d"scont"n)at"on of 1pr"ce

preference3 s*ste! s"c& 0SUs referred to Board for Ind)str"al And ="nanc"al

Reconstr)ct"on BI=R; for str)ct)ral refor!s 0art"c"pat"on of pr"vate sector "n s"c&

0SUs' +2 One &e* "ss)e "n the c)rrent phase of trans"t"on "s of ens)r"n# and !ana#"n#

co!pet"t"on to der"ve the !ost o)t of l"$eral",at"on' The tas& "s all the !ore d"ff"c)lt

$eca)se the nat"on "s not start"n# %"th a clean slate as var"o)s "nst"t)t"onal str)ct)res

cont"n)e to $e "n place' Bes"des the decontrol dere#)lat"on and pr"vat",at"on "n"t"at"ves

are $e"n# ta&en at a t"!e %hen #lo$al econo!"c env"ron!ent "s also )nder#o"n# a !a7or

chan#e'

In the %a&e of econo!"c l"$eral",at"on and %"de spread econo!"c refor!s "ntrod)ced $*

Ind"a s"nce +@@+ and "n confor!"t* %"th the co!!"t!ents !ade at the WTO "n Octo$er

+@@@ the 9overn!ent of Ind"a appo"nted a F"#h Level o!!"ttee Ra#havan

o!!"ttee; on o!pet"t"on 0ol"c* and o!pet"t"on La% to adv"se a !odern co!pet"t"on

la% for the co)ntr* "n l"ne %"th "nternat"onal develop!ents and to s)##est a le#"slat"ve

fra!e%or& %h"ch !a* enta"l a ne% la% or appropr"ate a!end!ents to the MRT0 Act'

The o!!"ttee s)$!"tted "ts report to the entral #overn!ent' The entral 9overn!ent

cons)lted all concerned "ncl)d"n# the trade and "nd)str* assoc"at"ons and the #eneral

p)$l"c' The entral 9overn!ent after cons"der"n# the s)##est"ons of the trade and

"nd)str* and the #eneral p)$l"c dec"ded to enact a la% on o!pet"t"on to replace the then

e8"st"n# co!pet"t"on la% na!el* the Monopol"es and Restr"ct"ve 0ract"ces Act +@?@;

the MRT0 Act; %h"ch %as pr"!ar"l* des"#ned to restr"ct #ro%th of !onopol"es "n the

!ar&et %"th a !odern co!pet"t"on la% "n s*nc %"th the esta$l"shed co!pet"t"on la% pr"nc"ples' +5 As the f"rst step to%ards th"s transfor!at"on a ne% o!pet"t"on Act 2>>2

%as enacted %h"ch rece"ved 0res"dent"al assent on /an)ar* +5 2>>5' The ne%

+2 Bhattachar7ea Ad"t*a 1The ase for a M)lt"lateral A#ree!ent on o!pet"t"on 0ol"c*: A Develop"n#o)ntr* 0erspect"ve3 @ /' Int l Econ' L' 2@5

+5 0radeep S and Man"sh A#ar%al T"!e for a =)nct"onal o!pet"t"ve 0ol"c* and La% "n Ind"a UTSInternat"onal /an)ar* 2>>?'

+>


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co!pet"t"on la% the o!pet"t"on Act 2>>2 "s ar#)a$l* a $etter p"ece of le#"slat"on as

co!pared to "ts predecessor the MRT0 Act'

The o!pet"t"on Act re#)lates the follo%"n# fo)r $road areas of co!pet"t"on la%

na!el* Ant"(co!pet"t"ve a#ree!ents $oth hor",ontal and vert"cal a#ree!ents A$)se of do!"nant pos"t"on o!$"nat"ons and o!pet"t"on advocac*' +6 E8pl"c"t def"n"t"ons and

cr"ter"a have $een spec"f"ed to assess %hether a pract"ce has an apprec"a$le adverse effect

on co!pet"t"on' One d"st"n#)"sh"n# feat)re of the Act "s that "t e!phas"ses on $ehav"o)ral

approach to e8a!"ne co!pet"t"on "n the !ar&et as a#a"nst the str)ct)ral approach

follo%ed $* the MRT0 Act' The re#)lat"on of M As has ret)rned to the scope of Ind"an

co!pet"t"on la% altho)#h the ne% la% sets rather h"#h t)rnover thresholds for

co!$"nat"ons to fall )nder "ts p)rv"e%' The ne% la% has e8traterr"tor"al reach' Th"s

prov"s"on "s $ased on %hat "s &no%n as the effects doctrine ' Th)s act"ons or pract"ces

ta&"n# place o)ts"de Ind"a $)t hav"n# an apprec"a$le adverse effect on co!pet"t"on "n the

relevant !ar&et "n Ind"a %o)ld co!e %"th"n the a!$"t of the Act' The o!pet"t"on

o!!"ss"on of Ind"a "s e!po%ered to loo& "nto s)ch !atters' The o!pet"t"on Act 2>>2

as a!ended thro)#h o!pet"t"on A!end!ent; Act 2>>C "s c)rrentl* "n force' B*

"ncl)d"n# prov"s"ons on co!pet"t"on advocac* the Act e8tends the !andate of the I

$e*ond !erel* enforc"n# the la%' Introd)ct"on of co!pet"t"on advocac* f)nct"on "s to

create a c)lt)re of co!pet"t"on "n the co)ntr* and "ncrease a%areness a!on#st var"o)s

sta&eholders a$o)t co!pet"t"on pol"c* and la%' Enforce!ent "s vested "n the o!pet"t"on

o!!"ss"on of Ind"a I; %"th appeals heard $* the o!pet"t"on Appellate Tr"$)nal' +>>; p'+


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co!pet"t"on !)st $e tolerated for econo!"c develop!ent of the co)ntr*' +@ Th)s the

res"d)al effect of s)ch an a#ree!ent on the soc"et* and "ts econo!"c develop!ent "s 7)st

as "!portant as "ts apprec"a$le adverse effect on co!pet"t"on'

orrespond"n#l* Sect"on +@ 6; prov"des for factors that the o!!"ss"on !)st ta&e "ntoacco)nt %h"le deter!"n"n# %hether an enterpr"se en7o*s a do!"nant pos"t"on or not )nder

Sect"on 6 of the Act' Sect"on +@ 6; l; a#a"n la*s do%n an e8cept"on "n ter!s of

contr"$)t"on of the enterpr"se to econo!"c develop!ent of the co)ntr* and "!pl"es that

the o!!"ss"on !a* tolerate a do!"nant f"r! "n the $roader econo!"c "nterest of the

co)ntr*' 2> Sect"on +@ 6; !; also allo%s the o!!"ss"on to cons"der an* other factors "t

!a* dee! "!portant %h"le dec"d"n# do!"nance of an enterpr"se "n "ts "n )"r* and

therefore "t "s free to 1read "n3 develop!ental concerns "nto "ts dec"s"ons and save the

econo!* fro! str"ct $lac&(letter "nterpretat"on of co!pet"t"on la% !a&"n# "t !ore

cond)c"ve to Ind"a s develop!ental needs'

There "s a s"!"lar 1sav"n#3 cla)se re#ard"n# "n )"r* "nto o!$"nat"ons $* the

o!!"ss"on )nder Sect"on 2> 6; !; %h"ch allo%s the o!!"ss"on to overr"de the

poss"$le ant"(co!pet"t"ve concerns ar"s"n# o)t of a certa"n co!$"nat"on "n v"e% of

econo!"c develop!ent 2+ and Sect"on 2>; 6; n; %h"ch !andates to cons"der %hether the

$enef"ts of the co!$"nat"on for the econo!* o)t%e"#h "ts adverse "!pact on theecono!*' Therefore the o!!"ss"on has $een #"ven cons"dera$le d"scret"on %"th re#ards

to arr"v"n# on a dec"s"on concern"n# ant"(co!pet"t"ve pract"ces "n the co)ntr* and the

on)s no% l"es on the o!!"ss"on to enforce co!pet"t"on la% and render s)ch dec"s"ons

%h"ch !a"nta"n a health* $alance $et%een protect"on of co!pet"t"on and econo!"c+@ +26 Sect"on +@ 5; ( The o!!"ss"on shall %h"le deter!"n"n# %hether an a#ree!ent has an apprec"a$leadverse effect on co!pet"t"on )nder sect"on 5 have d)e re#ard to all or an* of the follo%"n# factorsna!el*:( f; pro!ot"on of techn"cal sc"ent"f"c and econo!"c develop!ent $* !eans of prod)ct"on or d"str"$)t"on of #oods or prov"s"on of serv"ces'2>

Sect"on +@ 6;( The o!!"ss"on shall %h"le "n )"r"n# %hether an enterpr"se en7o*s a do!"nant pos"t"onor not )nder sect"on 6 have d)e re#ard to all or an* of the follo%"n# factors na!el*:( l; relat"veadvanta#e $* %a* of the contr"$)t"on to the econo!"c develop!ent $* the enterpr"se en7o*"n# a do!"nant

pos"t"on hav"n# or l"&el* to have an apprec"a$le adverse effect on co!pet"t"on'2+ Sect"on 2> 6; =or the p)rposes of deter!"n"n# %hether a co!$"nat"on %o)ld have the effect of or "sl"&el* to have an apprec"a$le adverse effect on co!pet"t"on "n the relevant !ar&et the o!!"ss"on shallhave d)e re#ard to all or an* of the follo%"n# factors na!el*:( !; relat"ve advanta#e $* %a* of thecontr"$)t"on to the econo!"c develop!ent $* an* co!$"nat"on hav"n# or l"&el* to have apprec"a$leadverse effect on co!pet"t"onP n;%hether the $enef"ts of the co!$"nat"on o)t%e"#h the adverse "!pact of the co!$"nat"on "f an*'

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develop!ent of Ind"a' Th"s a#a"n po"nts to the "ntent"on of the le#"slators to have an

1open to "nterpretat"on3 aspect of co!pet"t"on la% %h"ch co)ld $e shaped accord"n# to

the ne%l* ar"s"n# and chan#"n# needs of an e!er#"n# and d*na!"c econo!* s)ch as

Ind"a'

So!e a)thors on the other hand has %arned a#a"nst these prov"s"ons "n the Act

cons"der"n# the! to $e 1!ean"n#less and potent"all* dan#ero)s3 as $e"n# a!$"#)o)s and

not help"n# to deter!"ne clearl* the do!"nance of a f"r! or the effect of a co!$"nat"on on

co!pet"t"onP "nstead allo%"n# the o!!"ss"on a free(hand to condone s)ch pract"ce

%h"ch !"#ht $e prima facie ant"co!pet"t"ve' 22 The def"n"t"on of do!"nance see!"n# to

p)rport develop!ent "n the co)ntr*' =)rther %hat %o)ld const"t)te as a develop!ental

#ate%a* for ant"(co!pet"t"ve pract"ces to cont"n)e %o)ld a#a"n str"ctl* depend on the

def"n"t"on of develop!ent adopted $* the o!!"ss"on' To 7)st"f* "ts dec"s"on the

o!!"ss"on %o)ld a#a"n $e free to adopt an* def"n"t"on of develop!ent %h"ch "t dee!s

f"t at that po"nt of t"!e lead"n# to "ncons"stent verd"cts and le#al )ncerta"nt"es'

22 A7"t S"n#h 1 o!pet"t"on La% Develop!ent and Develop"n# o)ntr"es3 ava"la$le at%%%'"cr"er'or#4pdf4%toC'pdf'

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P OSITIVE I MPACTS ON THE I NDIAN I NDUSTRY

/o$s are an "!portant ro)te to povert* red)ct"on' o!pet"t"ve !ar&ets are !ore l"&el* to

prov"de the poor %"th opport)n"t"es to $e e!plo*ed or start the"r o%n s!all $)s"nesses'

Th"s "s $eca)se co!pet"t"on creates an ena$l"n# env"ron!ent to )nleash creat"ve ener#"es

of entreprene)rs and prod)ct"ve forces of soc"et* and there$* e8pand opport)n"t"es for

#a"nf)l e!plo*!ent' Therefore !ar&et(or"ented econo!"c refor! "s e8pected to help

ach"eve the pol"c* o$7ect"ve of #enerat"n# !ore e!plo*!ent opport)n"t"es' 25

=)rther co!pet"t"ve !ar&ets fac"l"tate %"der cho"ce of #oods and serv"ces for cons)!ers

at lo%est poss"$le pr"ces and $est )al"t*' o!pet"t"on creates env"ron!ent for f"r!s to

!"n"!",e the"r costs and pass on the cost red)ct"ons to cons)!ers' In th"s %a*cons)!ers espec"all* the poor can #et val)e for !one*' o!pet"t"on therefore

e!po%ers the poor creates opport)n"t"es for ne% f"r!s "ncl)d"n# s!all $)s"nesses to

enter !ar&ets and #ro% p)ts press)re on e8"st"n# f"r!s to "nnovate ens)res lo%est

poss"$le pr"ces for cons)!ers and $etter )al"t* prod)cts' 26 It sho)ld $e $orne "n !"nd

that %ell(f)nct"on"n# !ar&ets are one of the factors that deter!"ne the f)lf"ll!ent of the

pol"c* o$7ect"ves' A %ell(f)nct"on"n# !ar&et "s a &e* factor that can !a&e a s"#n"f"cant

contr"$)t"on to%ards econo!"c develop!ent' The po"nt "s that a !ar&et(or"ented

econo!* has the potent"al to del"ver #oods "f "t f)nct"ons properl* and "s allo%ed to do

so'

There "s no% a #ro%"n# real"sat"on that the sh"ft to%ards !ar&et(or"ented econo!* does

not !ean J"nv"s"$le hand- %"ll %or& to allocate reso)rces eff"c"entl* and prod)ce

co!pet"t"ve o)tco!es as the potent"al $enef"ts are often th%arted $* !ar&et(

d"stort"onar* pract"ces' In v"e% of th"s proper "nst"t)t"onal arran#e!ents need to $e "n

place to chec& s)ch $ehav"or of !ar&er pla*ers' 2< It "s therefore not s)rpr"s"n# to see that

%h"le "ncreas"n#l* !ore co)ntr"es have )nderta&en !ar&et(or"ented econo!"c refor!s at

the sa!e t"!e !ore and !ore co)ntr"es have e"ther enacted a co!pet"t"on la% or

scrapped the"r old la%s to enact a ne% one' Ind"a has fra!ed the o!pet"t"on Act 2>>2

25 o!pet"t"on 0ol"c*: Ind"a and the WTO- E0W 22 Dece!$er 2>>+'26 K"nod Dhall Overv"e% of o!pet"t"on La% and 0ol"c* Me!$er II o!pet"t"on o!!"ss"on of Ind"a'2< UTS Inst"t)te for Re#)lat"on and o!pet"t"on IR ; o!pet"t"on 0ol"c* "n Ind"a (( A e% For",on

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to replace the no% o)t#o"n# Monopol"es and Restr"ct"ve Trade 0ract"ces MRT0; Act

+@?@' o!pet"t"on la% therefore "s "ntended to p)t a chec& on restr"ct"ve or )nfa"r

$)s"ness pract"ces $* f"r!s "n the !ar&et' It la*s do%n le#al pr"nc"ples and "nst"t)t"ons

that #overn the $ehav"o)r of f"r!s "n !ar&ets "ncl)d"n# restr"ct"ve trade pract"ces !er#er

scr)t"n* prov"s"ons to deal %"th a$)se of do!"nance cartels etc' A co!pet"t"on la% "n

#eneral cons"sts of prov"s"ons %"th respect to $ehav"o)r and str)ct)re of f"r!s "n the

!ar&etP "nst"t)t"onal and enforce!ent des"#nP and co!pet"t"on advocac*' 2?

The re#)lat"on referred to here "s a set of transparent cons"stent and non(d"scr"!"nator*

r)les that create a co!pet"t"ve and d*na!"c env"ron!ent "n %h"ch !ar&et pla*ers can

thr"ve' In "ts a$sence ant"(co!pet"t"ve pract"ces and re#)lator* fa"l)res !a* not allo% the

!ar&et process to *"eld des"ra$le o)tco!es' The rat"onale for re#)lat"on d"ffers for

f"nanc"al !ar&ets fro! that of )t"l"t"es e'#' electr"c"t* teleco!!)n"cat"ons; and also for

transportat"on' Re#)lat"on of )t"l"t"es "s !a"nl* 7)st"f"ed $eca)se of nat)ral !onopol* or

locat"onal !onopol* for a"rports and seaport' In the case of f"nanc"al !ar&ets re#)lat"on

"s re )"red d)e to "nfor!at"on as*!!etr* s*ste!"c pro$le!s and f"d)c"ar*

respons"$"l"t"es %h"lst "n the case of p)$l"c passen#er transport the rat"onale for

re#)lat"on "s to prevent destr)ct"ve co!pet"t"on' 2C

Another reason for re#)lator* "ntervent"on "s that %h"le the !ar&et can $e e8pected to $r"n# a$o)t e )"l"$r")! $et%een Qde!andQ and Qs)ppl*Q "t %"ll not $e a$le to ens)re a

$alance $et%een QneedQ and Qs)ppl*Q' =ro! a soc"al po"nt of v"e% "t "s des"ra$le that all

cons)!ers re#ardless of the"r "nco!e stat)s have access to certa"n serv"ces for e8a!ple

electr"c"t*' Th"s re )"res re#)lator* "ntervent"on to pro!ote e )"ta$le o)tco!es' Sectoral

re#)lator* pol"c"es thro)#h !andat"n# )n"versal serv"ce o$l"#at"on on the serv"ce

prov"ders ens)re s)ppl* of serv"ces to the poor and d"sadvanta#ed cons)!ers at a

reasona$le pr"ce even "f "t !eans "nc)rr"n# a loss' 2 Re#)lat"on "n certa"n sectors th)s

$eco!es "!perat"ve to ens)re co!pet"t"ve o)tco!es' Mar&ets and sectoral re#)lat"on are

2? D=ID o!pet"t"on 0ol"c* La% and Develop"n# o)ntr"es4http:44%%%'df"d'#ov')&4Doc)!ents4p)$l"cat"ons4"tdco!pet"t"on$r"ef'pdf 2C "t"n Desa" at"onal o!pet"t"on 0ol"c* of Ind"a 0ol"c* Watch Kol 5 /)ne 2>> '2 Bhattachar7ea Ad"t*a 1Ind"a-s e% o!pet"t"on La%: A o!parat"ve Assess!ent3 6 / OMLE ?>@

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18/27


C RITICISMS AND SUGGESTIONS IN THE LIGHT OF THE NE# C OMPETITION POLICY

In the conte8t of the o!pet"t"on Act 2>>2 "t "s fac"n# a challen#e even $efore

$eco!"n# f)ll* operat"onal' A %r"t pet"t"on has $een f"led "n the S)pre!e o)rt

challen#"n# the const"t)t"onal val"d"t* of the Act and the appo"nt!ent of a $)rea)crat to

head the o!!"ss"on' 0)rs)ant to the l"t"#at"on the 9overn!ent has proposed to a!end

the o!pet"t"on Act 2>>2 inter alia $"f)rcat"n# the $od* "nto t%o: o!pet"t"on

o!!"ss"on and a o!pet"t"on Appellate Tr"$)nal' 2@

There are certa"n prov"s"ons "n the Act %h"ch )nder!"ne the "ndependence and a)tono!*

of the I' These "ncl)de #rant of !one* at 9overn!ent-s d"scret"on and the po%er

#"ven to the 9overn!ent to s)persede the I on #ro)nds of for e8a!ple p)$l"c"nterest' I "s also $o)nd $* d"rect"ons of the 9overn!ent on )est"ons of pol"c*' These

prov"s"ons severel* affect the "ndependence and a)tono!* of the I and need to $e

rev"e%ed' 5>

The prov"s"ons d"sc)ssed "n the conte8t of a)tono!* of the I !a"nl* a"! at &eep"n# a

chec& on I-s f)nct"on"n# $* l"!"t"n# "ts "ndependence' Fo%ever th"s "s not a #ood

approach of !a&"n# an "ndependent a)thor"t* acco)nta$le as "t red)ces "ts effect"veness'

Under the e8"st"n# prov"s"ons 0arl"a!ent has an overs"#ht over an* r)les and re#)lat"ons!ade to carr* o)t the prov"s"ons of the Act' I "s also !ade acco)nta$le $* re )"r"n# "t

to s)$!"t an Ann)al Report of "ts act"v"t"es %h"ch "s la"d $efore the 0arl"a!ent' Bes"des

appeals a#a"nst I-s order4dec"s"on l"e %"th the proposed o!pet"t"on Appellate

Tr"$)nal and the S)pre!e o)rt' 5+ Tho)#h these !echan"s!s e8"st the* are not l"&el* to

$e ver* effect"ve'

The o!pet"t"on Act "!pl"c"tl* reco#n"ses the overlap $et%een the f)nct"ons of sectoral

re#)lators and the I "n co!pet"t"on !atters' Accord"n#l* the Act and the draft

a!end!ent $"ll prov"de for a sectoral re#)lator to !a&e a reference to the I on s)ch

!atters' Unfort)natel* s)ch reference "s vol)ntar* "n nat)re "'e' p)rel* at the d"scret"on2@ T' 'A' Anant and /a"v"r S"n#h JAn Econo!"c Anal*s"s of /)d"c"al Act"v"s!- E0W 2?Octo$er 2>>2'5> R' Sh*a! Nhe!an" 1Slo% "!ple!entat"on of o!pet"t"on La%3 2< Int-l B)s' La%' 66+ +@@C5+ N)!&)! Sen Old %"ne "n ne% $ottle ( 2>++ o!pet"t"on 0ol"c* B)s"ness Standard A)#)st 2+ 2>++'

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of the sectoral re#)lator' As per the draft a!end!ent $"ll %here an* reference "s !ade to

the I re#)lators have to #"ve spea&"n# orders' Th)s even tho)#h I-s adv"ce "s not

$"nd"n# on the re#)lators the* %"ll have to prov"de a Jreact"on- to s)ch adv"ce rece"ved

fro! the I' Th"s %o)ld p)t a chec& on the %a* re#)lators )se I-s adv"ce' Th"s

a!end!ent "s a s"#n"f"cant "!prove!ent fro! the earl"er prov"s"on "n the Act %h"ch

allo%ed the re#)lators to ta&e dec"s"on as the* dee!ed f"t' 52 Fo%ever $* leav"n# the

cons)ltat"on process Jvol)ntar*- the "!prove!ent "ntrod)ced "n the draft a!end!ent $"ll

%o)ld $e "neffect"ve' ons"der"n# that re#)lators have to #"ve spea&"n# orders on a

reference !ade to the I the* %"ll have no "ncent"ves to refer the !atter to the I "n

the f"rst place "tself #"ven the d"scret"on the* %o)ld en7o*' S)ch "nade )ac"es "n the Act

%"ll create confl"cts $et%een the co!pet"t"on a)thor"t* and the sectoral re#)lators and

lead to "ncons"stent dec"s"ons and for)! shopp"n#'

The Act prov"des for e8e!pt"ons to !er#ers and a$)se of do!"nance on certa"n #ro)nds

s)ch as JEcono!"c Develop!ent- and J0)$l"c Interest-' Fo%ever there "s no def"n"t"on of

these ter!s' In the a$sence of clear def"n"t"on4cr"ter"a relevant prov"s"ons %"ll $e open to

var*"n# "nterpretat"ons $ased on the s)$7ect"ve "nterpretat"on of Jecono!"c develop!ent-

and Jp)$l"c "nterest- ' 55

=)rther %"th re#ard to the other parts of the pol"c* s)ch as Re#)lator* la%s "t "s oftenre )"red $* the #overn!ent to "ss)e Jpol"c* d"rect"ves- to re#)lators' 56 S)ch d"rect"ons

need to confor! to the o$7ect"ves of the relevant re#)lator* le#"slat"on and sho)ld $e

conf"ned onl* to pol"c* !atters and not relate to ad!"n"strat"ve and techn"cal !atters'

Unfort)natel* !ost often re#)lator* la%s do not def"ne the scope of these pol"c*

d"rect"ves' Leav"n# the ter! Jpol"c* d"rect"ve- va#)e and s)$7ect to ar$"trar*

"nterpretat"ons has #"ven r"se to confl"cts and conf)s"ons' 0resentl* "n so!e cases the

l"ne M"n"ster "s !ade ans%era$le to the le#"slat)re even for f)nct"ons that have $een

transferred to the re#)lator' Th"s !a&es the l"ne !"n"str* cont"n)e to %ant to perfor! the

sa!e f)nct"ons and "nterfere "n the do!a"n of re#)lator %h"ch "!pa"rs re#)lator*

f)nct"on"n# and conse )entl* "ts eff"cac*' A !echan"s! needs to $e developed to !a&e

52 S' ha&ravarth* 1Ind"a-s e% o!pet"t"on Act 2>>2(A Wor& St"ll "n 0ro#ress3 < B)s' L' Int-l 26> 2>>655 J0redat"on 0rotect"on and the 0)$l"c Interest- E0W Dece!$er 2>>>'56 ' Satapath* JUnder(val)ed I!ports and 0)$l"c Interest- E0W 5(+> =e$r)ar* 2>>+'

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the re#)lators d"rectl* acco)nta$le to the le#"slat)re' =)rther!ore hav"n# appropr"ate

processes "n place to fac"l"tate cons)ltat"ons $et%een the l"ne !"n"str* and the re#)lator "s

re )"red to avo"d a poss"$le co!pro!"se on re#)lator* a)tono!*' 5< The !anner of

cons)ltat"ons $et%een the Reserve Ban& of Ind"a RBI; and the M"n"str* of ="nance "s a

#ood !odel: the RBI holds cons)ltat"ons %"th the M"n"str* of ="nance on a re#)lar $as"s

at for!al and "nfor!al levels %"tho)t co!pro!"s"n# "ts a)tono!*'

The e8"st"n# re#)lator* le#"slat"ons re )"re re#)lators to s)$!"t an ann)al report of the"r

act"v"t"es $efore the parl"a!ent' 5? Fo%ever th"s prov"s"on "s not s)ff"c"ent to hold

re#)lators acco)nta$le "n an effect"ve !anner' E8pect"n# the 0arl"a!ent to devote the

a!o)nt of t"!e re )"red for "n(depth anal*s"s %o)ld not $e real"st"c' So!e re#)lator*

a#enc"es do not even s)$!"t the"r reports on t"!e' Select"on and appo"nt!ent of

re#)lators "s one of the !ost cr)c"al aspects that need to $e addressed )pfront' There has

$een a tendenc* "n recent *ears to appo"nt ret"red $)rea)crats and 7)d#es to re#)lator*

$od"es %"tho)t ascerta"n"n# the"r s)"ta$"l"t*' Th"s "s an )nhealth* pract"ce and needs to $e

c)r$ed' Indeed attract"n# *o)n# talent "s the &e* to !a&"n# these "nst"t)t"ons %or& "n a

des"ra$le !anner' E )all* "!portant "s to prov"de protect"on a#a"nst a poss"$le

d"scret"onar* d"s!"ssal' Th"s %o)ld #o a lon# %a* to ens)re f)nct"onal a)tono!* to

re#)lators' =or "nstance "n the *ear 2>>> the then #overn!ent a!ended the TRAI Act

and "n the process reconst"t)ted the A)thor"t* %h"ch "s cons"dered as a rather %ea&

"nst"t)t"on' Th"s de!onstrates the v)lnera$"l"t* that J"ndependent- re#)lator* "nst"t)t"ons

face "n Ind"a'

Another approach for oversee"n# re#)lators- f)nct"on"n# "s $* prov"d"n# for appeals "n

the relevant re#)lator* la%s' Th"s has ho%ever led to a d"sproport"onate prol"ferat"on of

appellate tr"$)nals tho)#h !ost of the! do not have eno)#h %or& and "s an )nnecessar*

$)rden on e8che )er' It also f)els the )ndes"ra$le trend of appo"nt"n# ret"red $)rea)crats4

7)d#es to head these $od"es' Secondl* there "s often an overlap $et%een the f)nct"ons

perfor!ed $* var"o)s re#)lator* a#enc"es ( $et%een the co!pet"t"on a)thor"t* and

sectoral re#)lators $et%een electr"c"t* re#)lators and the proposed petrole)! re#)lator

5< R' Sh*a! Nhe!an" 1Interface $et%een o!pet"t"on and Trade 0ol"c"es3 25 Int-l B)s' La% 6 + +@@>C #hosh'pdf 5 Bhattachar7ea Ad"t*a 1Ind"a-s e% o!pet"t"on La%: A o!parat"ve Assess!ent3 6 / OMLE ?>@

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C ONCLUSION AND ANALYSIS

The o!pet"t"on Act and o!!"ss"on have )shered "n a ne% o!pet"t"on Re#"!e "n

Ind"a' The ne% re#"!e %"ll herald a parad"#! sh"ft to the $)s"ness env"ron!ent "n Ind"a'

A s"#n"f"cant sect"on of Ind"an "nd)str* "s perhaps r"#htl* so apprehens"ve a$o)t th"s

ne% enact!ent and "ts poss"$le "!pact on the!' Ind)str* "s also an8"o)s that the

advanta#es to var"o)s sectors ar"s"n# o)t of co!pet"t"on sho)ld percolate to cons)!ers

and $)s"nesses for a level pla*"n# f"eld redressal a#a"nst ant" co!pet"t"ve pract"ces

co!pet"t"vel* pr"ced "np)ts and opt"!al real",at"on fro! sale of assets' Wh"le the

o$7ect"ve of the o!pet"t"on Act 2>>2 as stated "n "ts prea!$le "s )ndo)$tedl* la)da$le

and needless to sa* that th"s d*na!"c stat)te can and %"ll to)ch and chan#e the %a*

orporate Ind"a f)nct"ons on a da* to da* $as"s %hat "s "!portant "s that the

"nvest"#at"ons and "n )"r"es )nder the prov"s"ons of the Act sho)ld $e concl)ded as

e8ped"t"o)sl* as poss"$le and t"!"n# "ss)es need to $e addressed' In add"t"on "t "s ver*

"!portant to have deta"led #)"del"nes and a fra!e%or& %"th"n %h"ch the approval %o)ld

$e #"ven $* the o!pet"t"on o!!"ss"on' Th"s co)ld help !"t"#ate the l"&el* ele!ent of

)ncerta"nt* $* an )pfront eval)at"on of the para!eters conta"ned "n the #)"del"nes' One

hopes the #overn!ent %"ll ta&e s)ch "ss)es ser"o)sl* and ta&e steps to address the!'

The $as"c ph"losoph* $eh"nd and the co!!on thread thro)#h the var"o)s refor!

!eas)res has $een the resolve of the #overn!ent to l"$erate the Ind"an "nd)str* fro! the

shac&les of "ts var"o)s Jcontrols-' The thr)st of refor!s has $een to allo% for !ore

co!pet"t"on and for the #overn!ent to pla* the role of a fac"l"tator rather than the

controller of econo!"c act"v"t*' Fo%ever these $r"ef res)!es of the pol"c"es follo%ed "n

Ind"a . the e8a!ples can $e al!ost "nf"n"tel* !)lt"pl"ed . are all character"sed $* so!e

ele!ent of a !aladro"t )nderstand"n# of the !ar&et process' Tho)#h the #overn!ent has

adorned the role of a fac"l"tator "t cont"n)es to "ntervene "n the f)nct"on"n# of the !ar&etand v"olates the pr"nc"ple of Jens)r"n# free and fa"r !ar&et process-' Th"s sho)ld not $e

!"s"nterpreted as a s)##est"on that all "ss)es perta"n"n# to the env"ron!ent trade

ta8at"on "nd)str* la$o)r etc' $e Jresolved- $* the !ar&et' The po"nt "s that as pol"c*

o)tco!es are so)#ht to $e #enerated "t "s a pers"stent pract"ce "n Ind"a to do so %"tho)t

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$ear"n# "n !"nd that pol"c"es need to $e fra!ed and "!ple!ented "n s*!path* %"th the

!ar&et process and not "n a !anner so as to stall the process' a stron# pol"c* advocac* "s

re )"red to rat"onal"se the role of the #overn!ent s)ch as "ts "ntervent"on pro!otes

f)nct"on"n# of !ar&ets rather than "!pede "t' There "s need to ta&e pro(act"ve steps to

pro!ote co!pet"t"on %h"ch re )"res a declared "ntent fro! the #overn!ent of "ts resolve

to pro!ote co!pet"t"on and fa"r pract"ces "n the !ar&et . so!eth"n# $e*ond the scope of

a co!pet"t"on la%' S"!"lar to entral 9overn!ent pol"c"es and pract"ces there "s a need

for several pol"c"es4pract"ces of state #overn!ents that restr"ct ant"(co!pet"t"ve o)tco!es

and re#)lator* fa"l)res at the s)$(nat"onal level and local levels %h"ch are !ost often

"#nored partl* $eca)se of lac& of a%areness and partl* d)e to vested "nterests'

The researcher !a"nta"ns that even tho)#h the Ind"an co!pet"t"on la% "s !odelled alon#

the l"nes of E la% the o!!"ss"on "s "n no %a* $o)nd to "nterpret s"!"lar prov"s"ons "n

the Ind"an la% "n the !anner "nterpreted )nder the E la%' Accord"n# to the researcher

the o!!"ss"on on the other hand "s $o)nd $* the 0rea!$le of the Act to "nterpret "t "n a

fash"on that pro!otes econo!"c develop!ent of the co)ntr*' Th"s "s $eca)se the

cond"t"ons that e8"st "n Ind"a are re!ar&a$l* d"fferent than those that e8"st "n the E and

to co!e to the level %here there can $e tal& of s"!"lar "nterpretat"on of la%s "n the t%o

7)r"sd"ct"ons s"!"lar develop!ent level %o)ld necessar"l* $e a cond"t"on precedent'

The "!perfect"ons of the c)rrent la% as po"nted o)t sho)ld not necessar"l* $e v"e%ed as

"!perfect"ons $)t as opport)n"t"es %here the o!!"ss"on can ta&e dec"s"ons %h"ch

favo)r econo!"c develop!ent "n the co)ntr*' Wh"le "t !"#ht $e sa"d that "t %as o%"n# to

the $enef"ts that o!pet"t"on La% pro!"sed that the Ind"an 0arl"a!ent adopted a

co!pet"t"on la% "t %o)ld also not $e %ron# to also sa* that there %as cons"dera$le $)t

s)$tle "nternat"onal press)re "n ter!s of "nternat"onal trade a#ree!ents and #lo$al"sat"on

of !ar&ets that Ind"a *"elded to the press)re and adopted a co!pet"t"on la%' Th)s no%

that Ind"a has ta%en co!pet"t"on la% "t has the f)ll sovere"#n r"#ht to enforce and

"!ple!ent "t "n a !anner cond)c"ve to "ts needs and re )"re!ents' Ind"a "s *et to

co!plete "ts 7o)rne* of develop!ent )nl"&e the developed nat"ons )nt"l then as&"n#

Ind"a to confor! to str"ct co!pet"t"on pol"c"es %o)ld see! rather )n7)st"f"ed' As /ohn

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0reston has noted 1 o!pet"t"on pol"c* and la% can $enef"t all co)ntr"es %hatever the"r

s",e and level of develop!ent $)t the la% !)st $e appropr"ate to the"r needs'3 5@

Accord"n# to the researcher the need for a ta"lor(!ade co!pet"t"on la% or at least a

fle8"$le co!pet"t"on la% "s stressed &eep"n# "n v"e% the )n" )e cond"t"ons and s"t)at"onsthat pla#)e the develop"n# %orld and Ind"a' Ind"a and other develop"n# nat"ons of the

%orld are *et to co!plete the"r 7o)rne* of develop!ent to $e at a level %here the* can

enforce co!pet"t"on la% "n the !anner "!ple!ented "n developed co)ntr"es' The e8"st"n#

Ind"an La% as %as d"sc)ssed #"ves s"#n"f"cant a!o)nt of d"scret"on to the o!pet"t"on

o!!"ss"on and therefore "t "s )p to the o!!"ss"on to ens)re that the "!ple!entat"on

of the o!pet"t"on La% ta&es place "n a !anner that does not )nder!"ne the co)ntr* s

econo!"c develop!ental #oals other%"se the ver* p)rpose of o!pet"t"on La% %o)ld $e

defeated' Therefore th"s !ar#"n of freedo! %h"ch has $een "ntent"onall* #"ven $* the

Le#"slators to the o!pet"t"on o!!"ss"on !)st $e ta&en $enef"t of and f)rther the

econo!"c develop!ent #oals of Ind"a'

The var"o)s e8a!ples d"sc)ssed a$ove sho% )s that %h"le the $as"c pr"nc"ples of

co!pet"t"on la% re!a"n the sa!e the o$7ect"ves or the res)lts cannot $e the sa!e for all

7)r"sd"ct"ons' As the h"nese prover$ #oes 1A s"n#le d"sh cannot serve the tastes of a

h)ndred people3'

0erhaps the "!ple!entat"on of a o!pet"t"on La% can ta&e place "n three phases %here

the f"rst phase %o)ld #"ve preference to develop!ental "ss)es over co!pet"t"on "ss)es

the second phase %here there %o)ld $e a $alance $et%een develop!ental and

co!pet"t"on "ss)es and the th"rd phase %here co!pet"t"on la% %o)ld $e enforced "n "ts

f)ll v"#o)r l"&e "n the developed co)ntr"es 7)r"sd"ct"ons' In essence a pro#ress"ve

real"sat"on of co!pet"t"on pol"c* #oals %o)ld $e the ans%er to an effect"ve co!pet"t"on

la% re#"!e "n develop"n# co)ntr"es' Wh"le the "!ple!entat"on of co!pet"t"on la% even atthe earl* sta#es of econo!"c develop!ent "s not $ad per se "ts $l"nd "!ple!entat"on

follo%"n# the path of the developed co)ntr"es can &"ll "ts ver* o$7ect"ves'

5@ /ohn 0reston 1I!ple!ent"n# o!pet"t"on 0ol"c* "n Develop"n# o)ntr"es: The Role of Donors3 at%%%'$)s"nessenv"ron!ent'or #4d*n4$e4'''4Sess"on5'6 0reston Doc'pdf

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Th)s co!pet"t"on la% "s a co!ple8 creat"on of la%(!a&ers %h"ch the Ind"an 9overn!ent

and the o!pet"t"on o!!"ss"on sho)ld ta&e t"!e to )nderstand "n l"#ht of the spec"al

needs and re )"re!entsof the Ind"an econo!* and "!ple!ent and shape "t accord"n#l*'

2


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BIBLIOGRAPHY

Art"cles and Boo&s Referred:

Aad"t*a Mattoo and Ro$ert M' Stern eds'; Trade Invest!ent and o!pet"t"on

0ol"c*: An Ind"an 0erspect"ve- India and the WTO: A Strategy for e!elopment O8ford

Un"vers"t* 0ress'

A7"t S"n#h 1 o!pet"t"on La% Develop!ent and Develop"n# o)ntr"es3

ava"la$le at %%%'"cr"er'or#4pdf4%toC'pdf'

Bhattachar7ea Ad"t*a 1The ase for a M)lt"lateral A#ree!ent on o!pet"t"on

0ol"c*: A Develop"n# o)ntr* 0erspect"ve3 @ /' Int l Econ' L' 2@5

Bhattachar7ea Ad"t*a 1Ind"a-s e% o!pet"t"on La%: A o!parat"ve

Assess!ent3 6 / OMLE ?>@

' Satapath* JUnder(val)ed I!ports and 0)$l"c Interest- $PW 5(+> =e$r)ar*

2>>+'

Draft at"onal o!pet"t"on 0ol"c* 2>++'>C'2

/ohn 0reston 1I!ple!ent"n# o!pet"t"on 0ol"c* "n Develop"n# o)ntr"es: The

Role of Donors3 at %%%'$)s"nessenv"ron!ent'or #4d*n4$e4'''4Sess"on5'6 0reston Doc'pdf

N)!&)! Sen Old %"ne "n ne% $ottle ( 2>++ o!pet"t"on 0ol"c* B)s"ness

Standard A)#)st 2+ 2>++'

"t"n Desa" at"onal o!pet"t"on 0ol"c* of Ind"a 0ol"c* Watch Kol 5 /)ne

2>> '

0radeep S and Man"sh A#ar%al T"!e for a =)nct"onal o!pet"t"ve 0ol"c* and

La% "n Ind"a UTS Internat"onal /an)ar* 2>>?'

RANESF BASA T SEBASTIA MORRIS o!pet"t"on 0ol"c* of Ind"a: Iss)es

for a 9lo$al"s"n# econo!* Econo!"c and 0ol"t"cal Wee&l* /)l* 2@ 2>>>'

R' Sh*a! Nhe!an" 1Slo% "!ple!entat"on of o!pet"t"on La%3 2< Int-l B)s'

La%' 66+ +@@C

R' Sh*a! Nhe!an" 1Interface $et%een o!pet"t"on and Trade 0ol"c"es3 25 Int-l

B)s' La% 6 + +@@>2'

U TAD % &O$7ect"ves of co!pet"t"on la% and pol"c*: To%ards a coherent

strate#* for pro!ot"n# co!pet"t"on and develop!ent3

http:44%%%'f"as'net4"fce8t4f"as'nsf4Attach!entsB*T"tle4 onferences o!pet"t"on0ol"c*T

an, FassanGHa a*a'prn'pdf4 '

K"nod Dhall Overv"e% of o!pet"t"on La% and 0ol"c* Me!$er II

o!pet"t"on o!!"ss"on of Ind"a'

We$s"tes Referred:

%%%'co!pet"t"onco!!"ss"on'#ov'"n

%%%'c)ts("nternat"onal'or#

%%%'7stor'or#

%%%'$oo&s'#oo#le'co!
http://www.fias.net/ifcext/fias.nsf/AttachmentsByTitle/Conferences_CompetitionPolicyTanz_Hassan+Qaqaya.prn.pdf/http://www.fias.net/ifcext/fias.nsf/AttachmentsByTitle/Conferences_CompetitionPolicyTanz_Hassan+Qaqaya.prn.pdf/http://www.competitioncommission.gov.in/http://www.cuts-international.org/http://www.jstor.org/http://www.books.google.com/http://www.books.google.com/http://www.fias.net/ifcext/fias.nsf/AttachmentsByTitle/Conferences_CompetitionPolicyTanz_Hassan+Qaqaya.prn.pdf/http://www.fias.net/ifcext/fias.nsf/AttachmentsByTitle/Conferences_CompetitionPolicyTanz_Hassan+Qaqaya.prn.pdf/http://www.competitioncommission.gov.in/http://www.cuts-international.org/http://www.jstor.org/http://www.books.google.com/

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