MBA aspirants must be updated with General Awareness on current topics. General awareness topics with analytically drawn conclusions will benefit you in Essay writing / GD & PI. Today, you will read General Awareness Topic:
How Competition Commission of India impacts welfare of the consumers?
The Competition Commission of India has been established by the Indian government to keep a check on economic activities and promote healthy competition among companies in India.
The agency is responsible for enforcing the Competition Act in India and protecting the interests of consumers. In short, by ensuring that both local and foreign business players abide by the competition laws, the Competition Commission of India increases efficiency and encourages innovation in the Indian market.
This leads to a wider choice of products at lower prices for consumers. This is how the Competition Commission of India helps and protects the interests of consumers.
The Competition Commission of India prohibits companies from signing anti-competitive agreements, which include horizontal agreements such as cartels, price fixing, limiting production and bid rigging.
In addition, the agency ensures that organizations do not engage in vertical agreements such as tie-in, exclusive supply and distribution and the refusal to conduct dealings. Through competition, poor quality products and inefficient industry players are eliminated from the market.
Competition forces industry players to constantly come up with better quality products, in turn protecting the interests of consumers.
According to Pranab Mukherjee, the President of India and former Finance Minister of the country, “Competition is the buzzword now in every walk of life – in the industry, among service providers, students, job seekers and employers.
Higher productivity, allocation of resources, increased consumer welfare through lower prices, better quality, wider choices and accelerated economic growth are the dividends that accrue from greater competition.
This is what the Competition Commission of India is aiming for by formulating competition laws and regulations.”
In June 2011, the Competition Commission of India fined the National Stock Exchange of India for misusing its dominant position to protect and enhance its position in the currency derivatives markets.
The National Stock Exchange of India was also accused of engaging in predatory pricing, where it sold products at extremely low prices in an attempt to drive competitors out of the market and prevent new competitors from entering the financial market.
The agency imposed a fine of Rs 55.5 crores on the stock exchange company for violation of the Competitive Act on account of engaging in anticompetitive behavior.
This is an example of how the Competition Commission of India looks into the welfare of consumers. The Competition Commission of India has repeatedly mentioned that its aim is to protect consumers and not competitors. This is evident through the laws and regulations enacted by the organization.
The agency ensures that there are sufficient numbers of producers in every industry in India. This way, no organization will be able to monopolize the market and abuse its power. Mergers and acquisitions are also regulated by the Competition Commission of India.
The main aim of the Competition Commission of India is to ensure fair competition in the Indian market. This eventually impacts the welfare of consumers. In the presence of more industry players, consumers will have the power to make an informed decision.
The Competition Commission of India should not be viewed as a foe by industry players. This government body has not been established to undermine businesses but to provide a healthy environment for the economy to grow. It is a body that aims to promote creativity and improve the quality of products to benefit the society on the whole.