The government will come out with a National Competition Policy by next month, which it hopes will help reduce inflation and boost the country’s GDP as the experience of other countries worldwide has shown.

“By March 2012, we hope to have this in place. In the US, petro product prices fell by 50 per cent after this was implemented and in Australia, the GDP improved by four to five per cent and inflation was brought down,” said M Veerappa Moily, minister of corporate affairs, at a function organised by the Indian Merchants Chambers in Mumbai on Wednesday.

According to him, “You need not be frightened about regulators. They are there to control fires.” Last year, a draft National Competition Policy was prepared by a four-member committee set up by Dhanendra Kumar, former chairman of CCI. “The ministry is making modifications to this draft based on consultations and feedback and since most of the work is almost done and the minister is keen, we think we will be able to come out with the policy by next month,” Avinash K Srivastava, joint secretary in ministry of corporate affairs, told Financial Chronicle.

“The new policy aims to dismantle anti competitive forces in the country so farmers get best prices and unjust enrichment of middlemen who do not deserve this reduces and inflation too comes down,” said Moily. The draft of the policy, according to him, has been sent to the various ministries concerned and will come up to the cabinet for final approval.

Responding to a query on Kingfisher Airlines, Moily said “Kingfisher Airlines should be rescued. The major initiative should come from the person concerned as to which agency could come to his rescue. Bad governance results in failure. The company needs professional management rather than individual decisions resulting in loss,” said Moily.

The central government is also working on a national corporate governance policy. “Those with poor governance are worst performers and we need to detect early warnings signs of poor governance. The rights of minority retail investors are too precious and cannot be forgotten,” he said. The government hopes public pressure on firms will force them to set aside two per cent of their profits for CSR activities as recommended. “Shared prosperity and responsibility is what we need to work for. I want the new National Corporate governance policy to be ready in six months,” said Moily. He said that while 2011 had seen political paralysis, 2012 would be the best ever.