The announcement of the National Competition Policy will be the second biggest reform initiative after the 1991 economic reforms, according to Union Corporate Affairs Minister Veerappa Moily.
Chairing the first consultation meeting, organised by the Indian Merchants' Chamber and the Indian Institute of Corporate Affairs, he said the Cabinet nod would be expected by December and the New Competition Policy would be in place by 2012.
“Ideally, the policy should precede the law, but it is a good idea to have a policy, even if the Competition Act is already in force,'” said Mr. Moily. He said, while the Competition Law was for enforcement, the policy was for infusion of principles and promoting competition culture in the country.
The Ministry of Corporate Affairs (MCA) wants to strengthen and refine India's competition laws and the strategy involves the drafting of the competition policy, making changes to laws and norms that government departments need to follow.
Once in place, the policy will be a guide for various ministries and State governments to follow on competition.
The Minister said the Centre alone could not implement the Competition policy but the States as well as local bodies should be encouraged to promote competition. “It is their actions which affect the common man most” he added.
He said the Competition Policy was one of the most important instruments to ensure transparency in transactions.
Speaking on the forthcoming Procurement Policy, he said that once in place, it would remove lot of arbitrariness and discretionary powers in government purchases. “Over Rs.11 lakh crore of purchases are effected by government departments in India, and sadly we don't have a procurement policy yet, while smaller economies like Nepal and Afghanistan have well laid out norms.”
The Ministry wants to evolve a policy based on a vast consultative process. It had posted a draft competition policy on its website, seeking comments from the public during August 2011. It also held meetings with economists and consumer associations as well as business and industry.
Besides, a dozen experts are being approached to suggest sector-specific policy changes that are required to adopt principles of competition.
Another national consultation on the Competition Policy will be held in New Delhi on September 22, 2011 following which the final draft will be prepared.
Mr. Moily said India would a new Companies Act in 2012, replacing the existing Act of 1956. The Minister expected to obtain the approval of the Union Cabinet by next week or within a fortnight, following which it could be introduced during the Winter Session of Parliament.
The new Companies Bill seeks to promote shareholder democracy and improve corporate governance. The Ministry reworked and ‘fine-tuned' the Companies Bill, 2009, as the Standing Committee suggested as many as 300 amendments.