According to reports from Business Standard, Sudha Pillai, who served as joint secretary in the Department of Company Affairs during India's 1991 economic liberalisation, revealed that the amendment to the Monopolies and Restrictive Trade Practices (MRTP) Act was implemented with unprecedented urgency. Pillai wrote the Cabinet note to amend the MRTP Act, which had previously curbed business growth with a threshold as low as ₹20 crore. The reform was approved within days, with the Cabinet note being written in longhand and completed by midnight to meet the urgent timeline.
As reported by Business Standard, Pillai expressed concerns that the Competition Commission of India (CCI) could have done more to address market concentration issues. She noted that Indian industry is characterised by dominance with no more than four players in most sectors, and the CCI has been engaged in restrictive business practices inquiries for decades without significant progress. Pillai specifically cited the Amazon and Flipkart cases on abuse of dominance as examples where the CCI reached conclusions, but broader market concentration remains unaddressed. Recent CCI decisions demonstrate this challenge, including cases involving DLF's unfair conditions on apartment buyers and NSE's significant market power in currency derivatives markets.
According to Business Standard reports, Pillai highlighted that India's large companies are not exporting and have no pressure to export, which she attributes to the lack of competition in domestic markets. The reforms were designed to allow companies to grow without artificial curbs, but the expectation that wages would rise and there would be more economic activity has not been fully realised. Pillai noted that restrictive business practices continue to be investigated in sectors like cement and tires, with CCI inquiries ongoing for decades. Recent market liberalization cases show similar patterns, with Google's digital market practices and BCCI's cricket event regulation demonstrating how liberalization without proper competition enforcement can create private monopolies.
As reported by Business Standard, Pillai emphasised that social protection should have featured prominently during the 1991 reforms but was overlooked. She drew an analogy to house construction, explaining that while focus was placed on front and back doors, the roof and foundation were neglected. Pillai criticised the approach of distinguishing between social ministries and economic ministries, arguing that advanced countries don't make such distinctions and understand the interconnectedness of economic parts. She noted that trade union oppression and suppression of trade union rights have created extremes that prevent balanced economic development.
According to Business Standard reports, Pillai, who served as member secretary of the Planning Commission, highlighted the Commission's dual role in both facilitating state development and creating bottlenecks. She cited examples where budget announcements required in-principle approval from the Planning Commission, which should not be necessary once money has been allocated. Pillai noted that the Planning Commission provided a negotiating platform for states and helped state governments with policy recommendations, but the current Department of Expenditure focuses solely on maintaining deficit control without the broader development perspective.
