The country’s economic transformation owes much to the 1991 reforms that dismantled several restrictive barriers and promoted market dynamism.

However, amidst these strides, the suspension of the proposed National Competition Policy (NCP), envisioned in 2011, stands as a significant missed opportunity.

The NCP sought to institutionalise competition principles as an indispensable cornerstone of economic policymaking. It is imperative to revive this policy in today’s volatile world.

India’s growth story exemplifies the transformative power of competition. The opening of markets has spurred entrepreneurship, improved consumer choice, and catalyzed efficiency. Yet, beneath this progress lie persistent barriers — unintended anti-competitive effects of policies at various levels of governance.

These barriers undermine economic efficiency, hinder innovation, and dilute the transformative potential of inclusive growth. A coherent competition policy, as envisioned under the NCP, is essential to dismantle these roadblocks. It proposes a structured approach to embedding competition principles in policymaking, ensuring fairness, transparency, and the alignment of public policies with the goals of economic democracy.

Competition policy is more than a regulatory framework — it is a proactive instrument to optimize market structures. It ensures allocative, productive, and dynamic efficiencies, which are pivotal for achieving India’s macroeconomic objectives.

Moreover, by streamlining regulations and mitigating policy-induced market segmentation, competition policy enhances India’s global competitiveness. A robust competition framework also fosters economic democracy, reducing rent-seeking practices, empowering consumers, and levelling the playing field for small and medium enterprises.

Fragmented markets, often driven by state-level barriers such as tax discrepancies, infrastructure inadequacies, and policy misalignments, stifle the creation of a unified national market.

Regulatory incoherence, exemplified by overlapping jurisdictions between sectoral regulators and the Competition Commission of India (CCI), delays the resolution of issues and creates uncertainty for businesses. Public procurement inefficiencies, arising from the lack of competition principles, result in wastage of public funds and unchecked rent-seeking.

Actionable solutions

The NCP offers actionable solutions to address these challenges. Among its key tools is the implementation of Competition Impact Assessments (CIA), which systematically evaluate the competitive effects of proposed and existing laws, policies, and regulations. By doing so, CIAs ensure that economic policies align with national strategic objectives while fostering a competitive and innovation-driven market structure.

Beyond addressing immediate market inefficiencies, the NCP represents a transformative governance reform. It seeks to embed transparency into policy formulation and implementation processes, making them rule-bound and minimizing arbitrariness.

This transparency enhances accountability, strengthens public trust, and aligns government actions with broader economic goals. The policy also emphasizes capacity building, educating stakeholders — including policymakers, businesses, and consumers — on the principles and benefits of competition.

Furthermore, the NCP proposes incentivized reforms by encouraging State governments to align their policies with competition principles.

While the Competition Act, 2002, empowers the CCI to curb anti-competitive practices, the NCP complements this legislative framework by addressing the structural and policy-induced issues that lead to such practices.

The relationship between competition law and policy is inherently synergistic: where competition law penalizes anti-competitive behaviour, competition policy prevents its occurrence by fostering a culture of fairness and efficiency.

Careful strategising

Reviving the NCP requires a carefully orchestrated strategy. The institutionalization of the National Competition Policy Council (NCPC) is central to this strategy. The NCPC would act as a guardian and promoter of competition principles, overseeing the implementation of the NCP, monitoring reforms, and advocating for a competition-driven governance model.

Cross-sectoral collaboration is another critical component, ensuring that sectoral regulators and the CCI work in harmony to achieve common objectives.

Periodic reviews of laws and policies are also essential to keep pace with evolving economic dynamics. The inclusion of sunset clauses for obsolete regulations ensures that the policy framework remains relevant and adaptable.

The formulation and implementation of the NCP are far more than administrative exercises; they are the linchpin for achieving India’s aspirations of sustainable, inclusive, and globally competitive growth.

It is imperative for the government to revisit the NCP as a forward-looking framework for future reforms. By doing so, India can unlock the full potential of its economy, foster innovation, and secure its position as a global economic leader.