Viksit Bharat Hinges on a Crucial Competition Framework
India’s economic growth has been fueled by decades of liberalization and investment, but a significant piece of the puzzle remains overlooked – competition policy. As the nation strives to become a developed economy by 2047 and solidify its position as a global manufacturing hub, getting competition right will be key.
India’s economy currently faces a mix of challenges, from a widening current account deficit to rising input costs. Against this backdrop, a well-designed competition framework is not just a nicety, but a necessity. It has the power to encourage innovation, drive productivity, and ensure the efficient allocation of capital.
A 70% jump in India’s manufacturing sector’s share in the country’s GDP is cited as a major aim in the government’s vision for the economy. Yet, the sector’s growth remains stymied by restrictive monopolies and inefficient business practices. Effective competition policy can play a vital role in addressing these issues.
The Competition Commission of India (CCI) has been at the helm of enforcing competition laws in the country since 2009. However, despite its efforts, the regulator has faced criticism for its inability to effectively address competition issues in the Indian economy. A recent amendment to the Competition Act aimed at strengthening the CCI’s powers, but more work needs to be done to create a robust competition framework.
What this means
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Developing a robust competition framework will be a crucial step in India’s journey to become a developed economy. By promoting competition, the government can drive innovation, encourage entrepreneurship, and reduce inequality. As the Indian economy navigates its current challenges, it’s essential that policymakers prioritize the development of a well-designed competition framework to unlock its true potential.
