Two by Two

The relentless rise of "government" as a competitor

Oct 24, 2024

In this discussion, Anupam Manur, an Economics Professor at Takshashila Institution, delves into the evolving role of government as a regulator and competitor in India. He examines how initiatives like UPI and Bharat Connect have transformed everyday life while questioning the implications of government intervention in markets. Manur also addresses the challenges of unemployment and pollution, evaluating the effectiveness of government initiatives in the digital economy. The conversation raises fascinating questions about competition and sustainability in a rapidly changing landscape.

01:30:56

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Episode guests

Anupam Manur

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Quick takeaways

The podcast discusses the government's dual role as a regulator and competitor in digital infrastructure, raising questions about market fairness.

A critical examination of government interventions reveals inconsistencies, with some initiatives like UPI efficiently addressing needs while others fall short.

Deep dives

Regulatory Approaches to Market Power

There are distinct approaches to regulating market power across different regions, notably between Western countries, the European Union, and China. The discussion highlights that while Western nations implement antitrust legislation to address monopolistic behavior, the EU has a stronger stance that can result in the dismantling of large companies. In contrast, China's regulatory framework allows for governmental intervention to entirely eliminate sectors deemed undesirable. The podcast contemplates a unique 'third way' proposed by India, aiming to balance competition while ensuring that market players do not also dictate the rules.

Intro

4min

Government Intervention in Indian Markets

7min

Understanding Public Goods and Societal Trends in Egg Freezing

4min

Government Interventions in the Digital Economy

14min

The Future of UPI: Competition and Sustainability Concerns

4min

What happens when the government plays the role of regulator, policymaker, and operator?

The government has played a pivotal role in establishing and promoting Digital Public Goods (DPG) and Digital Public Infrastructure (DPI) in the past decade and a half, and there have been a few which have been integral in our daily lives in more ways than one.

The reason why these solutions exist is plain and simple: There emerged companies which disrupted the landscape of finance, commerce, mobility and a whole lot of other aspects of our lives, but as they gained prominence, they also started to play by their own rules.

The regulator was not able to act fast enough in most cases to keep things in check. So the government intervened and helped establish and promote solutions which would keep things in check and protect the interests of all the parties involved.

Some solutions literally changed the way our day-to-day lives are, and created businesses which are built on top of these solutions. Think UPI, ONDC or Bharat Connect (formerly known as Bharat Bill Payment System).

In addition to creating and shaping these systems, frameworks, or protocols, these government-backed players, or GBPs, as we referred to them in this episode, also became competitors in what they had helped build, which begs the question: What kind of system does this shape up to be?

In episode 15 of Two by Two, hosts Rohin Dharmakumar and Praveen Gopal Krishnan sit down with Anupam Manur, Professor of Economics at The Takshashila Institution, to break down the interventionist solutions championed by the government. From UPI and ONDC to the Unified Lending Interface.

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Additional listening:

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Additional reading:

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RBI is competing with its regulated entities — and killing competition

This episode of Two by Two was researched and produced by Hari Krishna. Rajiv CN, our resident sound engineer, mixed and mastered this episode.

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