MBA Aspirants are expected to know on what is new in economy and what is that impacting it? Today, you will read on Competition Commission of India
The Competition Commission of India is a government body, established in 2003 to enforce the Competition Act of 2002 across India and prevent activities that have a negative impact on the industry competition in India.
To achieve this objective, the Competition Commission of India ensures that the Indian market works for the benefit of the consumers, and makes sure that competition in economic activities is fair for the overall development of the country. Also, the organisation oversees the utilisation of economic resources and comes up with policies to make it more efficient.
Recently, news has spread in India that airfares have doubled in India, and airline companies attributed this increase to the deteriorating value of the rupee and the costs that airlines have to cover because of the rising fuel price, which accounts for around 45% of the operating cost of the airlines.
However, even though the value of rupee has increased in the past few days, airline operators have not adjusted the airfares. As such, there is a concern among the consumers that airline companies are taking advantage of strong passenger demand to jack up airfares.
According to the International Air Travel Association, air traffic increased by 15.7% in August 2013 compared to August 2012, and passenger load factor increased by 4.5 percentage points to 71.9%. However, the combined losses of Indian carriers are approximately Rs 122 billion (US$ 2 billion), which have been accumulated over the past two years, and this is what airline companies hope to recoup by increasing the price of airfares.
And this is not fair to consumers. So, this is where the Competition Commission of India has been asked to step in to save the Indian aviation sector from taking advantage of consumers and to maintain a fair system that allows healthy competition among all the players.
The Competition Commission of India has an important role in the dynamics of the Indian economy. Without such an organisation, all the players in the industry will come up with policies and fares that are only beneficial for the organisation and the market economy will become inefficient.
Healthy competition between players allows for better services and products, and without any competition, organisations become complacent and there is no incentive to work hard to enhance consumer base.
By enforcing the Competition Act of 2002, the Competition Commission of India prohibits companies from forming anti-competition agreements that stifle the growth of the economy. Also, it prevents companies from misusing or abusing their dominant position.
Every year, the Competition Commission of India conducts training programmes within the country and outside the country to enlighten companies on how they can form alliances with other organisations without having a negative effect on the national economy and consumers.
According to the Competition Commission of India, anti-competitive agreements such as cartels, in which companies determine or fix the prices of goods at a high level, are not allowed.
Every year, the Competition Commission of India receives hundreds of cases from consumers and organisations on the misuse and abuse of power in the market and these cases are dealt with seriously.
The Competition Commission of India has an important role in maintaining the integrity of the Indian economy and it has done an excellent job for the last ten years.
However, the organisation will continue to reap success for the benefit of the economy and the Indian consumer if everyone keeps a look out for unfair practices and reports them to the Competition Commission of India.