The Competition Commission of India was established under Competition Act, 2002 with a view to regulate the market through its various mechanisms and instruments which have been provided under the Act. There are many issues and contentions varying from great philosophers to simple common man who have little knowledge about the market. The contention is that market is a free system where there is no interference either from government or from a regulator. Some believes that there should be regulation of the market from the government or through some rules and regulations whether created by State or by neutral agency. As researcher do agree with certain points of Adam Smith that there should be free market.
As we know that since liberalization, privatization and globalization in 1990’s, the need of regulation was felt due to the certain instances like; Harshad Mehta Scam, Ketan Parekh Scam, etc. which made the government to think and take necessary action for the welfare of the general public. There are broadly two types of Regulation:-
- Economic Regulation
- Social Regulation
Economic Regulation means regulation by the regulatory authorities like; SEBI, TRAI, IRDA, etc. Social Regulation means regulation by all environmental regulations, like Environmental Protection Act, Water Act, etc.
These two types of regulations are prescribed for the regulation of market which is considered to be free market. In other words, we can say that there should be less interference from the government side. A free-market is an economy where all markets within it are unregulated by any parties other than those players in the market. In its purest form the government plays a neutral role in its administration and legislation of economic activity, neither limiting it (by regulating industries or protecting them from internal/external market pressures) nor actively promoting it (by owning economic interests or offering subsidies to businesses or R&D). Although an economy in this most radical form has never existed, efforts to liberalize an economy or make it “more free” attempt to limit such government intervention.
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