Finance Minister Arun Jaitley has cautioned that pro-business environment without "pro-competition" policies can result in dangerous consequences, including crony capitalism.
"Being pro-business alone is not enough. Being pro-competition is essential to be with pro-business. If you are pro-business without being pro-competition, the consequences could be very dangerous," he said as he pitched in for competition in his annual day lecture of Competition Commission of India recently.
Citing example of competition providing plethora of choice to customers, Jaitley said advent of e-commerce has provided widest possible choices of goods to the consumers at most competitive prices at the click of a button.
"Competition promotes technology at most reasonable prices, competition will provide quality of services/products to the consumers at competitive prices. It promotes innovation, efficiency and quality," he said.
Pointing out Russia, he said, the country went in for a lot of privatisation without emphasis on pro-competition resulting in creation of oligarchs.
"Oligarchs again meant monopolies. So any pro-business policy per se also has to be pro-competition because without pro-competition, being pro-business itself can encourage oligarchs. It can encourage crony capitalism which itself is dangerous," Jaitley, who is also the Corporate Affairs Minister, said. With India's transformation from a regulated to a market economy, Jaitley said the government had dual capacity in the context of running enterprises such as BSNL, general insurance companies and LIC. Then there was the need to have "regulators at arm's length from the government... The more we professionalise them better it is for our economy," he said.
"Today world over people have investment and when they choose they never invest in sluggish economy. They want to invest in more competitive economy, they want to invest in a fair economy, they want to invest in an economy where entry and exit is easy, where the rules of business is fair," Jaitley said highlighting the importance of competition and its impact on growth.
With the passage of Bankruptcy and Insolvency Code, easy exit will be facilitated.
"An investor does not want to invest in a jurisdiction where exit is difficult. Therefore, with now proper regime creation there would be significant improvement in that area," he noted. (SH)
Fibre2Fashion News Desk – India