COMPTETION:

GROWTH & PROSPERITY

 COMPTETION
• a business relation in which two parties
compete to gain customers;
• Competition is a contest between individuals,
groups, nations, animals, etc. for territory, a
niche, or a location of resources... It arises
whenever two or more parties strive for a goal
which cannot be shared. ...
• Competition in economics is a term that
encompasses the notion of individuals and
firms striving for a greater share of a market to
sell or buy goods and services. ...
COMPTETION: GROWTH & PROSPERITY

• India has become one of the world’s fastest

growing economies with a global presence in
automotives, business process outsourcing,
telecommunications, pharmaceuticals and
information technology. India’s GDP in
purchasing power terms is $3,526 billion
averaging a GDP growth rate of 8.5% for the
last five years. This makes India world’ fourth
largest and second fastest growing economy.
 COMPTITION:A TOOL FOR GROWTH

• The major reason for this growth and

development of India are the liberal steps
which has been taken by the government of
India after 1990s. These steps helped to
create the atmosphere for open competition.
In this situation market is open for every one.
 COMPTITION:A TOOL FOR GROWTH

• The Second International Conference on

Competition Law, held in last November, was
titled Competition Law as an instrument of
inclusive growth.
• “Our aim is to use competition law as an
instrument of competition policy to drive
triple bottom line justice – social, economic
and environmental justice”.
 COMPTITION:A TOOL FOR GROWTH

• They use the term environmental justice as

humanity is going to face a natural resource
crunch which in severity will be much graver
than the recent cash or credit crunch. The
focus is to improve the competitiveness of
entities by skilful allocation of natural, human
and economic resources.
 COMPTITION: A TOOL FOR GROWTH

• “We have to apply competition law to

facilitate radicals to continually confront and
challenge incumbents by cheaper and
superior products and services through
constant innovation.”

International Conference on Competition Law,

 HOW IT WORKS
• Competition is irrefutably beneficial for every
market participant. Competitive markets give
consumers wider choice and lower prices. It
gives sellers stronger incentives to minimize
their costs through innovation and other
productivity enhancing techniques. This
enables firms to pass on cost savings to the
customers and offer better products and
greater choice at lower prices.
 HOW IT WORKS
• Competition affects growth and prosperity in
several ways.

I. Competition encourages firms to use internal

resources more efficiently and encourages
the management to increase performance
thereby increasing static efficiency in firms.
 HOW IT WORKS
II. Competition also ensures dynamic efficiency
in that new efficient firms enter the market,
while inefficient firms exit the market. This
increases the competitive pressure on
incumbents and encourages them to increase
productivity. In Denmark, around one in ten
firms either enters or exits the market each
year.
 HOW IT WORKS
III. competition encourages firms to innovate.
Firms innovate to diversify themselves from
competitors and to increase profits or to
improve the production process. This put a
competitive pressure on the competing firms
and leads to even more innovation.
 HOW IT WORKS
IV. The most important results of intensive
competition are lower prices, better quality of
goods and services, a high innovation rate, a
richer commodity supply, higher employment
and stronger competitiveness.
 WHAT SHOULD BE NEEDED FOR
COMPTITION?
• Open markets, market oriented regulation and
an effective competition law are prerequisites
for obtaining an effective competition.

• Several studies have found that de-regulation

of specific markets have led to price
reductions by up to around 25 percent.
 WHAT SHOULD BE NEEDED FOR
COMPTITION?
• This requires free, but fair and open
competition that is possible only through
judicious framework for competition policy
and law.
 COMPETION LAW OF INDIA
• The principal objective of competition law is to foster competition as an
instrument for accelerating growth through innovation and economic
efficiencies thus maximising consumer welfare by offering better
products at lower prices. It achieves its objectives in three ways:
 
(i) prohibiting anti-competition agreements and practices that harm free
trade and competition;
 
(ii) preventing abuse of dominant position and anti-competitive practices
that lead to such a dominant position;
 
iii) regulating mergers and acquisitions.