The S V S Raghavan Committee on a new competition policy is in favour of an all-embracing law that will allow competition in almost all sectors, barring a few exemptions in national interest.
The exemptions will be few and will be mentioned in a reserved list, especially in the case of defence and other `sovereign' functions. Ad-hoc exemptions are unlikely.
The public distribution system is also likely to be exempted, given its implications and the dependence of a large section of the population. Protected sectors like small-scale industries may also be thrown open to competition. However, assistance may be ensured for such sectors by recommending cheap credit.
Reservation for public sector enterprises may also not be possible, except in cases explicitly reserved. Price and purchase preferences could be challenged under the new policy. However, a transition period is likely to be provided to ensure continuity.
In some cases, certain sectors/activities are reserved for government entities through international commitments. For instance, the monopoly of Videsh Sanchar Nigam Ltd over international voice traffic is protected until 2004. The government has committed to the World Trade Organisation to review the monopoly in that year.
Apart from a draft law being drawn up by the committee, there will be also be an extensive competition policy. It will define various aspects of competition and lay down the principles and prerequisites of competition.
The policy is expected to delineate a broad approach, while the law, being a statute, will have an enforceable nature. The legislation could then provide an umbrella framework for framing and notifying executive policies.
