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The Economist, a somewhat late Narendra Modi convert, in its cover story (May 24) on the Lok Sabha elections, optimistically commented—in Narendra Modi’s amazing victory, India may have its best chance ever of prosperity. The magazine’s optimism for the Indian economy is shared across the board.
The Sensex is at a record high, foreign funds are making a dash for India, ministers and bureaucrats, taking a cue from India’s new workaholic PM, are keeping longer working hours (six days a week), policy experts are coalescing big-ticket reform ideas and even rival political parties are lining up to pledge support for the government’s efforts. Arun Jaitley, India’s new finance, corporate affairs and defence minister, aptly captured the sentiment when he recently said: “The international community is once again looking at India, and it is an opportunity that we cannot miss.” Delivering on this opportunity of economic rejuvenation will be Modi government’s key challenge.
Tackling this challenge head on, Modi, in his trademark alliterative style, provided the nation with a performance mantra, based on three ‘Ss’—scale, skill and speed. But what does this S-mantra mean beyond its verbiage; how will India Inc actuate it to revive the growth story?
To deliver lasting results, there is need of a policy back-up, an institutional apparatus that integrates the essence and spirit of ‘scale, skill and speed’ into our economic system, laws and policies. That can help leverage the S-mantra into its economic thought and action. The adoption of a National Competition Policy (NCP) could be one such policy measure.
NCP, which is pending final government announcement since 2012, is a set of measures and policies that would help the government to analyse, audit and align policies, rules and laws affecting market activity, to promote a competition culture across the board and help in the development of competitive markets, even within its own endeavours and policy implementation. RBI Governor Raghuram Rajan recently said: “…as gravity guides water through the shortest path, competition naturally guides the economy to the most productive route.” It is, however, important to distinguish between NCP and India’s competition law regime—the latter is a part of the former. While India’s Competition Act, 2002, is a regulatory instrument to primarily ex-post regulate anti-competitive market behaviour, NCP is a proactive policy framework that seeks to correct anti-competitive outcomes of government policies and laws, and helps in development of competitive and efficient markets. To strengthen the competitive forces in