Public Procurement Woe
Economic Times, September 26, 2011

By Pradeep S Mehta

The railways minister, Dinesh Trivedi, has recently announced two high-level committees to look at safety and modernisation. Both of them are closely linked to each other. But what is perhaps missing is the fact that procurement distortions may just end up thwarting any progress or quality in either the safety systems or even the modernisation of railways. Why are so many accidents taking place in the railways? Because of poor quality of equipment coupled with negligence. Why are so many tracks poorly built? Because of poor quality coupled with carelessness. Corruption is a common denominator. More...

How competition reform can check inflation
Business Standard, September 22, 2011

By Pradeep S Mehta

Once again the Reserve Bank of India (RBI) has raised the interest rates, with several questioning the wisdom of the decision. Inflation has become the bugbear of our growth story, and in the recent past some of our econocrats have also suggested for lowering the growth rate to curb it. Competition reforms and the existence of an effective competition regime can help growth and curb inflation. More and effective competition can generate new innovations, which is a major driver of economic growth. More...

Highway robbery by state transport companies
Financial Express, September 12, 2011

By Pradeep S Mehta

While there is a general acceptance that anticompetitive practices should not be tolerated, a look at the situation across many countries would reveal that there is a general tolerance of anticompetitive practices in the bus transport sector, particularly the long-distance market. These anticompetitive practices exist mostly in the form of cartelisation and abuse of dominance. This is also worsened by the fact that some of these anticompetitive practices flourish due to legal protection offered by regulations governing the road transport sector, which thwarts the process of competition.More...

Market dynamism & productivity growth
Financial Express, September 03, 2011

By Aradhna Aggarwal

It is widely acknowledged that economic liberalisation has changed the incentives of the corporate sector and unleashed new investment and growth forces. But the behaviour and achievements of Indian companies remain controversial. There are two competing views: pro-market and pro-business. The former view holds that liberalisation fostered business dynamism through removal of entry barriers and heightened competitive pressures. In contrast, the pro-business view, while recognising the gains, attributes them to excessive market power accompanied by economic entrenchment of large dominating incumbent firms. More...