He also said that with the growing economy, the role of each regulator will expand.
"Excessive competition at times can result in pricing of nature that the sector of the economy itself feels stressed because everybody then tends to follow the leader," he said at an event organised by anti-trust regulator Competition Commission of India.
"Therefore, what do you do in a such situation of this kind. These are all challenges which are going to emerge as economy moves further and expands further," he said.
If the current growth rate continues for a decade or two, he said, Indian economy expansion is going to be exponential.
"The size is going to increase, the size of industry is going to increase, the size of services sector will increase and the role of each regulator while exercising self restraint will also expand," he said.
Explaining the object of the competition law, the finance minister said that protection of consumer interest was a key pillar of this.
"The government wanted effective market players, reasonably optimum in number so that the consumer interest is protected. That was the object of the competition law when the state withdraws and leave the economy to markets. What happens that aberration develops in the market. So for that purpose, a regulator with a keen eye on the markets was created and that was the Competition Commission of India," he said.
He also said that procurement, based on the principles of fairness, transparency and public interest, will protect the revenues of the state and make sure that they are used for optimal purpose.
Public procurement being a very large part of the country's GDP, the state is entitled to have the best price and quality and this also applies to all statutory institutions, he said.
There are areas in which tender bids can be global while in some areas, domestic development is desirable, especially in case of the service sector in which the effective competition needs to be build within the country itself, he said.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)