"Economic efficiency and equity go hand in hand."

Soon after his return from a stint at the World Bank, Dhanendra Kumar was appointed the first Chairman of the newly formed Competition Commission of India.

He said that the history of the new Competition Act could be traced back to 1991 and the commencement of the New Economic Policy. The policy statement itself mentioned that the objective was to bring competitive efficiency and edge to the market and to integrate it with the world economy.
"In the new thinking, growth was welcomed, dominance was welcomed. It was the behaviour which was a problem."

The objective behind the law was to promote efficiency in production and distribution. "Competition results in best allocative efficiency and optimum static and dynamic efficiencies. It also maximizes consumer and the producer surplus. It is a win-win situation." He also said that some studies in the United States have shown that consumers received almost 25% savings after the introduction of competition. "With competition, our objective of high growth coupled with equity would be achieved."

"Take the example of telecom. I am particularly fond of this example because I was Additional Secretary in the Department of Telecom when the New Telecom Policy was put in place in 1999. Today, our telecom services are one of the best in the world and the rates are the lowest."

He also added that competition was not an end in itself. "It should result in better efficiencies." He noted that if there were sectors where competition would not bring these benefits, then the Competition Commission "would consider an exemption."

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• dhanednra kumar
• cci
• economic growth
• equity
• New Economic Policy
• New Telecom Policy