Favouring state-run companies becoming more competitive, Prime Minister Manmohan Singh today said the public sector enterprises have to be provided greater functional autonomy and freed from bureaucratic control.
"Going forward, our governments will have to increasingly adopt competition-neutral policies... Competitive neutrality requires that the government not use its legislative and fiscal powers to give undue advantage to its own businesses over the private sector," he said.
Speaking at the BRICS Competition Conference here, Singh said the solution lies in providing "greater functional autonomy" to public sector firms and freeing them from bureaucratic control, and not in tolerating a slip in their competitiveness and then shielding them from competition.
Singh observed that by virtue of their ownership, public sector companies have long enjoyed captive markets and been shielded from competition.
Stating that exposure of public sector enterprises to increased competition is a crucial issue, Singh said government owning a firm does not mean that it should shelter the company from competition as well.
"Unfortunately, government ownership inevitably brings with it a bureaucratic style of decision-making and the end result is that the enterprise cannot compete in a market populated by equals," the Prime Minister said.
Addressing officials of fair trade regulatory authorities from the BRICS grouping -- Brazil, Russia, India, China and South Africa -- and other nations, Singh said a competitive public procurement market can make bid rigging more difficult.
Noting that anti-competitive behaviour hurts the "poor most of all", Singh said that effective competition in markets need to be created and enforced through public policy.
