Parliamentary panel expresses concern over CCI budget cuts

The Parliamentary Standing Committee on Finance has raised concerns over the reduced budgetary allocations for the Competition Commission of India (CCI), questioning the Corporate Affairs Ministry (MCA) about the revised funding and the status of pending competition cases, official sources said.

According to a communication sent by the House Panel to the MCA, the Committee has sought written explanations on a range of issues, which will form the basis of discussion during oral evidence on the Ministry’s Demands for Grants for 2024-25. A critical concern raised by the Committee headed by Bhartruhari Mahtab is the downward revision of funds allocated to the CCI under the Revised Estimates (RE) for 2023-24. The revised allocation stood at close to ₹ 50 crore.

The reduction in budget since 2019-20, when allocation was close to ₹80 crore, has raised questions about the Government’s commitment to ensuring effective competition regulation amid a rapidly expanding and complex market environment.

Pendency in Cases 

The Committee has also demanded details regarding the overall pendency of cases with the CCI over the last three years, including an explanation for the steps the regulator took to reduce the backlog. 

“Despite the CCI’s mandate to promote fair competition and curb anti-competitive practices, the piling up of unresolved cases points to an urgent need for administrative and procedural overhaul. Such delays in adjudicating cases not only impair the enforcement of competition law but also hinder the market’s ability to correct unfair practices swiftly”, market experts observed.

Adding to the regulatory uncertainty is the status of the Draft Digital Competition Bill, which has been under deliberation since last year. The Committee has asked for updates regarding the progress of the draft Bill, which aims to address competition concerns in the burgeoning digital market. The establishment of a committee to assess the necessity of a separate law for digital competition was touted as a crucial step by the MCA during last year’s budget examination. However, the status of the Bill remains unclear, raising questions about the roadmap for addressing challenges posed by digital behemoths.

The Parliamentary panel’s queries suggest growing concerns about the Government’s approach to competition regulation, particularly given the reduced financial resources and case backlog. 

“For a body that is central to preserving market integrity and consumer interests, these challenges could undermine its role as an efficient market watchdog”, added the expert.

“With a diminished budget, the CCI may struggle to enhance its capacity, adopt new technologies, and bring in specialized talent to deal with increasingly complex competition issues, especially in the digital economy. This could weaken India’s competitiveness on the global stage, as effective antitrust regulation is considered a cornerstone of a fair and thriving market environment.”

PAC Performance Review 

Meanwhile, the CCI is also set to face performance review by the Public Accounts Committee (PAC), which is headed by Congress MP KC Venugopal.

PAC has already approached MCA to garner information on M&A deals after Congress made public allegations about the regulator’s lenient approach to clearing certain M&A deals of certain large corporate houses. 

Over the years, the Commission has imposed penalties, but the actual recovery remains minuscule—raising eyebrows over its effectiveness in delivering tangible outcomes in its regulatory duties.