After Sebi, Parliament committee to conduct CCI's performance review

The Public Accounts Committee of Parliament, chaired by Congress leader KC Venugopal, has decided to assess the performance of regulatory bodies established by Acts of Parliament this financial year

The Competition Commission of India (CCI) is likely to come under review by the Public Accounts Committee (PAC) of Parliament this financial year, according to a Mint report. This follows a similar examination of the Securities and Exchange Board of India (Sebi) by the PAC.

Earlier this month, the PAC requested a detailed report from the Ministry of Corporate Affairs on the operations of the CCI, according to sources cited in the report. The ministry subsequently submitted the requested information by September 27, the deadline set by the committee.

The Lok Sabha Secretariat’s PAC branch had requested the information. The PAC, chaired by Congress leader KC Venugopal, comprises members from various political parties. The committee has reportedly decided to assess the performance of regulatory bodies established by Acts of Parliament, and the CCI is expected to be included in this review.

Assessing the effectiveness of regulator

The upcoming review will focus on the effectiveness of competition regulation in promoting consumer choice and ensuring optimal market outcomes without hindering innovation. The review will also scrutinise the resources and enforcement record of the Competition Commission of India.

Data from the CCI revealed that of the 1,224 anti-trust cases registered by the end of March 2023, investigations were initiated in 403 cases, leading to findings of violations and adjudicatory orders in 185 instances. More than 100 cases remained pending at various stages as of March 2023. In addition, the CCI had adjudicated on over a thousand merger filings.

The PAC’s role is to hold the executive accountable to Parliament. It reviews not only the funds allocated by Parliament and the government’s annual finance account but also other matters it deems necessary. The government follows up on the committee’s recommendations, providing updates on the actions taken or planned, which are included in the PAC’s ‘action taken report’ to Parliament.

One area likely to draw attention is the difficulty the CCI faces in recovering penalties. In the 2021-22 and 2022-23 financial years, the CCI imposed penalties of Rs 1,336 crore and Rs 2,672 crore, respectively, but managed to recover only around 13 per cent and less than 1 per cent of those amounts, according to the CCI’s annual report for 2022-23.

Focus on expanding mandate
 

The PAC is also expected to review whether the CCI is adequately equipped to fulfil its mandate. Following the expiry of the National Anti-Profiteering Authority’s term in 2022, the CCI took on responsibility for handling profiteering cases related to the Goods and Services Tax (GST). 

Additionally, the expanding digital economy and a proposed digital competition law are expected to broaden the CCI’s regulatory scope. Despite this, the regulator reportedly has only around 30 professionals, including financial analysts, economists, and lawyers. Effective coordination between the CCI and other sectoral regulators will be crucial to avoid overlapping responsibilities and ensure smooth enforcement.

Political sensitivities

The PAC’s review could become politically contentious. Earlier, on August 21, Congress leader Jairam Ramesh raised concerns on social media, highlighting that while the CCI has imposed penalties on both domestic and international firms for alleged abuses of dominance, the government has allowed a five-fold increase in User Development Fees (UDF) at Lucknow and Mangalore airports. 

These airports are operated by the Adani Group, which has not commented on Ramesh’s statement so far. Notably, Jairam Ramesh is not a member of the PAC.