Competition and the PSU Incumbent

For the first time in the history of competition regulation in India, the Competition Regulator of India or Competition Commission of India has penalised a public sector monopolist (Coal India Limited)  for abuse of dominant position (in supply of dry fuel). A news item titled,  “‘CCI slaps Rs.1,773 cr penalty on CIL” tells us that,

“As per CCI, CIL and its subsidiaries have been found to be “imposing unfair/discriminatory conditions in fuel supply agreements (FSAs) with the power producers for supply of non-coking coal.” Such conditions violate fair trade norms. Apart from issuing a cease and desist order against Coal India and its subsidiaries, the CCI has directed modification of FSAs. Besides, the regulator has asked the company to consult all the stakeholders for making the modifications in the FSAs. In recent times, CIL has drawn flak for fuel shortages that have been hurting power generation.

This is a positive step as much of what ails the Indian economy arises from monopolies in critical (input) sectors.” We need to keep an eye on this aspect as far as telecommunications go too.