New competition policy will curb inflation: Moily

The introduction of a new competition policy next month would lay the ground for the launch of the second generation of economic reforms in India, according to corporate affairs minister Veerappa Moily.

"The competition policy would be the second big financial reform in the country after 1991 and prices will come down without affecting productivity of companies," Moily said on the sidelines of the India Corporate and Investor Meet in Kolkata today.

The minister said the policy paper has already been circulated among the various ministries and it is expected to be approved by the cabinet in March.

"We have a competition law that came into existence in 2009," said Moily. "But we don't have a national competition policy, which is quite important. The competition law is just a segment of that larger canvas of a national competition policy."

Moily pointed out that the policy envisaged the dismantling of monopolies and anti-competitive forces. Referring to the competition policy in the US, the minister said it had resulted in the halving of petroleum prices. The policy was an excellent tool to combat inflation, he added.

The government would also circulate an amended Competition Act, in view of the new competition policy. The amendments would be cleared by the cabinet and the Act would be introduced in the budget session of Parliament, he added.