Lack Of Easy Exit Process Biggest Bane Of The Indian Economy: Arvind Subramanian
Lauding the Competition Commission of India (CCI) for its recent decisions, Commerce Minister Nirmala Sitharaman said fair competition must be ensured in the public procurement system in the country and the anti-trust regulator has made it possible.
‘'I think the reality demands that we need a dynamic CCI which periodically nuances its position and not become a blunt instrument wielder on Indian economy. And there are examples of how CCI has stood up to that expectation. Hasn't the CCI last month ensured that there should be fair play by penalising the rigging bids for supply of cements to the government?'' she said during her address at the national conference on ‘Economics of Competition Law' organised by the CCI in New Delhi.
Emphasising on the need for the CCI at each step of the public procurement process, the minister said: “Today 30 percent of our GDP in India goes under the public procurement bracket and most of it is coming from defence, railways and telecom. You still have public procurement and you have to open up layer after layer. Till then, shouldn't we be requiring a CCI to ensure that even at this transition phase we are being fair.'
Chief Economic Advisor Arvind Subramanian, who was also present at the event, however, expressed that regulatory institutions in are still “work in progress.”
I don't think we have achieved the kind of maturity in our regulatory systems as we need to. There are number of reasons why is this happens. Capacity is a real problem. We need more and more talent.Arvind Subramanian, Chief Economic Advisor
He went on to say that the economic and political system of the country has still not developed the maturity to have finely calibrated response to problems.
“We have blunt instruments, bans restrictions, etc. I think in the area of competition policy, we need to have nuanced analysis and intervention wherever the problem arise,” he added.
He stressed upon the need for an easy entry and exit process for businesses coming to India. “We have made great progress on entry but we are seriously lagging behind on exit. If there is one bane on (the) Indian economy, it is that exit is not happening quickly enough and it does impede competition.''
However, Sitharaman disagreed with the chief economic advisor's view. “I don't think it (CCI) is work in progress. I think CCI is striving to be a dynamic institution, so that it responds in real time to the requirements of Indian economy. I don't think it is work in progress but it has to continue to be a dynamic institution.''
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