Govt mulls state watchdogs to tone up competition laws

Written by Ronojoy Banerjee | Ronojoy Banerjee | New Delhi | Updated: Sep 13 2010, 06:23am hrs
In a bid to strengthen competition laws in the country, the government is mulling setting up state competition regulators to look into issues arising out of health and education that form a part of the state list.

According to a corporate affairs ministry official, a proposal has been mooted by certain stakeholders that state competition regulators be set up which would not only create awareness about competition-related issues but would be well placed to deal with local problems effectively.

As per the plan, the Competition Commission of India would continue to operate as the apex competition body looking into high-profile disputes including inter-State problems and issues arising in the areas etched out in the Union and Concurrent list.

State competition bodies would work towards strengthening competition in education, health and waste management issues of which they would be in the best position to understand because of their local expertise and act upon them directly, an official said.

A senior CCI official said, Even we had mooted a similar proposal to set up State-wise competition bodiesthis is a prevalent practice in the westfor instance the US has a federal competition authority supported by State-wise competition regulators, and a similar set up is also needed in India.

Currently the CCI has more than 25 pending cases including high-profile ones. So far the director-general of the commission has initiated investigations into many of the cases but the commission is yet to pass a final verdict. Corporate affairs officials say that that apart from breaking cartels the commission is empowered under the Act to create awareness programme as well.

Last week in a big relief to the CCI the Supreme Court passed a judgment disallowing the Competition Appellate Tribunal (Compat) to interfere in the working of the commission. It said that the parties can only appeal in the Compant once the CCI has passed its final verdict. However the apex court has ordered the commission to use its powers sparingly besides completing the investigation within a maximum period of 60 days.

State-wise competition bodies are the next logical step in the evolution of competition law. However the government must ensure that there is a clear demarcation between the CCI at the centre and other State-competition regulators, a corporate lawyer closely associated with the CCI said.