Fair Competition: An Engine of Economic Development
Posted: 8 Dec 2011
Date Written: December 7, 2011
The main objective of the competition policy and law is to preserve and promote competition, as a means to ensure efficient allocation of resources in an economy, resulting in the best possible choice of quality, the lowest prices and adequate supplies to consumers. As a general proposition, competition law consists of rules that are aimed at protecting the process of competition in order to maximize consumer welfare. The aim of the Competition policy is to enhance the economic efficiency by way of safeguarding and promoting the competition between the enterprises, persons, etc. Existence of a policy on competition efficiency of producers is witnessed ushering in maximum welfare to the society keeping profit at a reasonable level.
The object behind the enactment of the Competition Act in 2002 has been the prevention of practices bearing negative effect on competition in the market, to ensure the promotion of competition in market, to ensure the protection of the consumers' interests and to promote free trade to be carried on by the participants other than the domestic players in the Indian markets, keeping in view the economic development.
Hence, the Competition law in India seems to be very focused over the maintenance of free market economy and controlling the abuse of dominant position by the market player through the anti-competitive practices. The very root of the competition policy in India can be traced back to Articles 38 and 39 of the Constitution which make the State duty-bound to promote the welfare of the people. Article 38(2) specifically provides for the minimization of inequalities in income of the people in India. Article 39(b) provides for the distribution of material resources of the society with an objective to subserve the common good. Though these articles highlight the socialist influence on the Indian economy, yet they can be taken as responsible for imposing the duty over the government to ensure the welfare of the society and the consumers. It can be recalled again that the welfare of consumers is the ultimate aim of the free market economy. While the competition policy in general, is also based on the free market principle of the Economics.
Keywords: competition, development, economic development, fair competition, competition law
JEL Classification: K2, K21
Suggested Citation: Suggested Citation