Study of the competition act 2002 and the competition scenario in key Indian sectors

Abstract

India started her quest for industrial development in 1947, after independence from British rule. It was a then fledgling democracy with an almost non-existent economy. The industrial sector was under-developed. It was then that the Indian Government came out with the Industrial Policy Resolutions of 1948 and 1956. The main objectives of the policies were 􀂾 To delineate the role of the state in the industrial development 􀂾 To achieve growth of domestic industries 􀂾 Social justice 􀂾 Self-reliance The then Prime Minister Pandit Jawaharlal Nehru chose the goal of economic self-sufficiency with economic development to be achieved by central planning modeled on that of the Soviet Union. While agriculture was left to private initiative, industrialization was subject to Government intervention and regulation. The private sector was allowed limited licensed capacity in some sectors while the public sector controlled major share of the production. The policy gave the government the power to intervene in the industrial sector. It could do so directly by monopolizing certain sectors or could use the regulatory mechanism in certain sectors like licensing, quotas etc. This model, known as the Nehruvian model, was a structural model with the objectives of achieving a defined set of investment allocations based on state determined priorities. The desired allocation was to be achieved by the administrative mechanism of licensing of production and granting of quotas in the case of scarce resources like foreign exchange.