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    Competitive Environment

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    neelkamal_in
    The document discusses India's movement towards a more competitive environment. It outlines factors contributing to increased competition in India such as public sector disinvestment and privatization. The benefits of competitive markets are also described, as well as the need to regulate competition to prevent issues like information asymmetries and collusions.

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    Competitive Environment

    Uploaded by

    neelkamal_in
    286 views19 pages
    The document discusses India's movement towards a more competitive environment. It outlines factors contributing to increased competition in India such as public sector disinvestment and privatization. The benefits of competitive markets are also described, as well as the need to regulate competition to prevent issues like information asymmetries and collusions.

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    The document discusses India's movement towards a more competitive environment. It outlines factors contributing to increased competition in India such as public sector disinvestment and privatization. The benefits of competitive markets are also described, as well as the need to regulate competition to prevent issues like information asymmetries and collusions.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    286 views19 pages

    Competitive Environment

    Uploaded by

    neelkamal_in
    The document discusses India's movement towards a more competitive environment. It outlines factors contributing to increased competition in India such as public sector disinvestment and privatization. The benefits of competitive markets are also described, as well as the need to regulate competition to prevent issues like information asymmetries and collusions.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    of 19

    Competitive

    environment
     Efficiency of economy depends upon
    competitiveness of market…
     Degree of competition depends upon
    the number of firms in the market &
    distribution of market share between
    them..
     Barriers, government interventions,
    immobility of factors of production,
    dominance of public sector firms
    tend to decrease degree of
    competition & increase the market
    imperfections..
     India is also moving towards
    competitive environment!
    Factors contributing to competitive
    environment in India..
     Public sector disinvestment &
    privatization
     Opening up of new sectors to private
    enterprises
     De licensing
     De reservation of SSI items
     Liberalization of FDI
    Benefits of competitive markets..
     Growth of entrepreneurial culture
    leading to increase in number of
    producers & sellers in the market.
     Increase in investment & capital
    formation leading to increase in
    supply capabilities.
     Sustained R&D efforts
     Reduction in wastage
     Customer focus
    Benefits of competitive markets..
     Increased foreign market entry
     International trade & investment
     Better resource utilization
     Wider range of goods & services
     Competition between the firms of
    unequal strength can really be self
    destructive…
    Negative effects of competition..
     Information asymmetries
     Unethical collusions
     Hostile takeovers
     Transfer pricing
     Strategic market alliances
     Differentiated pricing
     Interlocking directorates
     So there comes the need to regulate
    competition!!!
    MRTP Act-1969
     Objectives:
    -To prevent concentration of
    economic power in few hands
    -To control monopolies
    -To prohibit monopolistic &
    restrictive trade practices
     MRTP act replaced by competition act
    2002..
    Major flaws in MRTP Act..
     MRTP Act failed to recognize
    following anti competitive practices:
    -collusions
    -bid rigging
    -predatory pricing
    -full-line forcing
    New competition policy 2002
     A set of government measures aimed
    at stimulating competition,
    encouraging growth, preventing
    monopolistic & restrictive trade
    practices and promoting efficiency
    Objectives of competition policy in
    India
     Promotion & sustenance of
    competition in markets to increase
    economic efficiency
     Protection of consumers’ interest
     Ensuring freedom of trade
    Features of competition Policy
    2002
     Anti-competitive agreements
     Prohibition of abuse of dominant
    position
     Regulation of combinations
     Competition fund
     Competition commission of India-
    the apex body
    Features of a good Competition
    Policy
     Capable of controlling the misuse of
    the market power of dominant firms.
     Should be able to identify anti-
    competitive effects of mergers &
    acquisitions
     Should be able to check barriers
     Capable to identify & monitor
    collusions
    Features of a good Competition
    Policy
     Capable to protect anti-competitive
    agreements
     Provide wider choice to consumers
     Must provide protection to SSI’s of
    national importance
     Should apply to all the major
    segments

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