FRAMEWORK FOR COMPETITION REFORMS (FCR) Rijit Sengupta CREW NRG-II Meeting 2nd July 2014, New Delhi

OUTLINE Background (Competition Reforms) What is FCR? Components of FCR FCR & CREW Findings (Photo: Neha Tomar)

Background “If countries eliminated policies and practices that distort competition, they could grow rapidly”, Power of Productivity, William W Lewis (2004) Many DCs/LDCs have adopted competition laws in last decade However implementation remains limited Policies affect competition, markets remain concentrated and anti-competitive practices prevail Benefits of competition don’t accrue to consumers, producers Low level of understanding and attention of key stakeholders Benefits of introducing competition reforms needs to be demonstrated

Components of Competition Reforms ‘Competition Reforms’ encompass: Enabling government policies Well-designed regulatory framework, empowered institution Functional competition regime (policy/law/agency)

Framework for Competition Reforms (FCR) A guide to plan, execute, evaluate & rectify competition reforms in DCs PLAN EXECUTE EVALUATE RECTIFY (Re: Shewart Cycle that is used in business management as a tool for continuous improvement of products/processes)

FCR (contd.) Developed for a specific market To help key stakeholders appreciate benefits of competition reforms on consumers and/or producers Lead to greater attention to the issue - as part of economic planning and reforms in DCs Incorporate experience/research findings under CREW

FCR Preparatory Work Need a competition champion to lead Formation of a small but decisive team (CRFT) Identify need for competition reforms Identify the sector/market to be reformed Assess ‘state of the art’ (review of sector, concerns for consumers/producers) (Photo: Shreya Kaushik)

Steps of FCR Planning Executing Evaluating Rectifying

FCR Step 1: Planning Identify relevant reforms (policies, legislations, statues, programmes) in the selected market Understand implications of these reforms on market composition Highlight reform intentions (consumers and/or producers welfare) Select indicators of consumer and producer welfare Prepare a methodology and analytical plan (data collection and analysis)

FCR Step 2: Executing From the set of selected reforms narrow down to those having pro-competitive or anti-competitive market outcomes Gather relevant secondary literature/information and primary data on indicators of consumer & producer welfare Interpret current levels of consumer and producer welfare resulting from these reforms (qualitative + quantitative) Highlight prevailing concerns vis-à-vis selected reforms (qualitative + quantitative)

FCR Step 3: Evaluating Link consumer and producer welfare or concerns with market composition resulting from reforms Record suggestions from consumers, producers, key stakeholders for amendments Identify political economy issues in sectors Generate a body of evidence Start engaging with CRFT members with results Reform Market Composition Consumer/ Producer Impact

FCR Step 4: Rectifying Review and discuss results (consumer & producer impacts) Plan a process for initiating corrective measures Develop a M&E framework to assess and report consumer and producer impacts after ‘corrective measures’ are taken

Developing FCR based on CREW findings Development of outline of FCR Draft sectoral FCR (based on CREW experience) Incorporation of stakeholders’ views to make adjustments Draft FCR (each sector) shared with NRG members in NRG-III and subsequent finalisation Used to elicit interest among government/stakeholders for FCR in other sectors/countries

Thank You www.cuts-ccier.org/CREW rsg@cuts.org (Photo: Rijit Sengupta)