Jaitley urges encouragement of mergers and acquisitions of domestic companies

Union Corporate Affairs Minister Arun Jaitley on Monday urged the encouragement of mergers and acquisitions of domestic companies, adding that the emergence of competition law in India is a reason to cheer.

"People learn from global experience. When our own corporates are of moderate size, mergers, acquisitions and consolidation need to be encouraged to promote size," Jaitley said, while speaking at the International Competition Network (ICN) Merger workshop in the national capital.

"Around 15 years ago, the practice of anti-trust practice and a competition law practice was unknown in this country. It had emerged strongly in developed countries because mergers were taking place; impact of anti-competitive practices was taking place, not only within territorial jurisdiction of states, but it also had a trans-national impact," he added.

Speaking of practices of the past, Jaitley spoke encouragingly of how the mindset has changed from that of decades in the country.

"As a developing economy we were still moderate in our size and we were trying to break away from the shackles of the past thinking, where what was big was considered to be evil. That was the whole hypothesis of the thinking that brought the original MRPP law in India. The thinking was that if you become larger in size, you necessarily will become exploitative and therefore your ability to dominate a market must be corrected at the very threshold. That thinking prevailed for decades in India," he said.

Jaitley also spoke of how the Competition Commission of India (CCI) is becoming 'extremely mature', however adding that the presence of multiple regulators has resulted in issues pertaining to jurisdiction over different turf areas, giving the example of the merger of two telecom companies.

"If two telecom majors are to amalgamate, there will be common turf areas between the telecom regulator and market regulator CCI. Therefore how do you built the jurisdiction of the two? Obviously jurisdiction in this area is emerging," he stated.