ONDC is making a foray into the city transport sector but its very existence is problematic

Open Network Digital Commerce (ONDC) has entered the city transport sector by tying up with a Bengaluru-based ride-hailing company. The objective is to check the market dominance of aggregators like Uber and Ola. ONDC, a Government-run protocol on the lines of UPI, is also reportedly negotiating with more companies in the sector in several other cities. While well-intended, there are fundamental flaws in the idea of ONDC. When it was launched in September last year, it was claimed that it would check the monopoly of global e-commerce giants like Amazon and Walmart. “After UPI, another game changing idea to democratise commerce - ONDC soft launch today to select consumers, sellers and logistics providers. Get ready for a world of choice, convenience and transparency,” Commerce & Industry Piyush Goyal tweeted the day ONDC was launched. But isn’t checking monopolistic practices the duty of the Competition Commission of India (CCI)? The Competition Act, 2002, was passed by Parliament in 2002, to which the President accorded assent in January 2003. It was subsequently amended by the Competition (Amendment) Act, 2007. In accordance with the provisions of the Amendment Act, the Competition Commission of India and the Competition Appellate Tribunal were established. The CCI is now fully functional with a Chairperson and six members, according to the CCI’s website. The provisions of the Competition Act relating to anti-competitive agreements and abuse of dominant position were notified on May 20, 2009.

“It is the statutory duty of the Commission to eliminate practices having adverse effect on competition, promote and sustain competition, protect the interests of consumers and ensure freedom of trade carried on by other participants, in markets in India as provided in the Preamble as well as Section 18 of the Act,” says the CCI website. The commission is also mandated to give its opinion on competition issues to government or statutory authority and to undertake competition advocacy for creating awareness of competition law, it adds. Against this backdrop, the very idea of the Ministry of Commerce & Industry setting up a body for the same purpose is duplication of work. Besides, it also militates against the principle Prime Minister Narendra Modi has stated more than once: the government has no business to be in business. It is in pursuance of this principle that the Government has been privatising public sector undertakings. But, by launching ONDC, the Ministry of Commerce & Industry will be ensuring government interference in the economy — something that is not in tune with the Modi Government reformist agenda. On the face of it, ONDC’s new forays may seem impressive but in reality these don’t appear to be consistent with the newly emerging policy framework. Instead of zealously promoting ONDC, the Ministry of Commerce & Industry should focus on boosting manufacturing.