Competitive Markets

Promoting competitive markets is one of the key themes of the New Growth Strategy of the Planning Commission. The theme focuses on developing freely functioning agricultural markets, a renewed interest in domestic commerce and reducing obstacles to the growth of the industrial sector. Some of the key issues in markets include heavy government involvement in agricultural markets through support prices and subsidies. This leads to reduced productivity and discouraging private sector involvement. In case of the industrial sector, inconsistencies in government policies and the energy crisis pose the greatest threats to the growth of this sector. Domestic Commerce on the other hand, despite a share of over 30% in the country’s economy, has never seen systematic and focused reform effort by the public or private sectors.

The main reforms needed to promote competitive and vibrant markets include: first, deregulating agricultural markets and focusing on improving storage, transport and distribution of agricultural produce. For retail and wholesale trade which are a part of domestic commerce, reforming city zoning laws and building regulations to allow land use to respond to market demand is suggested. Promoting openness and competition to bring international quality goods to the market and encouraging innovation is also stressed. And lastly, our legal and judicial framework must be made supportive of the complex needs of market development.