The proposed National Competition Policy may help in tackling inflation by creating a fair playing field for producers, farmers and traders, Corporate Affairs Minister Veerappa Moily said on Friday.
The Minister said that good competition would "create a win-win situation for producers, farmers, traders among others".
"That is the kind of big benefit," he added.
He was speaking at a function organised by the Institute of Company Secretaries of India (ICSI) in New Delhi.
"Whenever we confront with inflation and many other problems of economy we always look at the RBI and bankers...on what they will do.
"But, ultimately
they can't do anything to contain inflation ... Only fair play of the competition law and competition policy is the solution," Moily said.
Consultations are underway on a draft National Competition Policy to integrate principles of fair-trade practices in various economic policies.
Inflation, which touched 6.87 per cent in July, continues to remain a concern for the economy. Though inflation moderated in July compared to 7.25 per cent in June, it still remains much above the 5-6 per cent comfort level of the Reserve Bank of India (RBI).
Meanwhile, food inflation, which accounts for nearly 15 per cent of the overall inflation basket, was at 10.06 per cent in July.
Supply side bottlenecks are seen as one of the reasons for high inflation.
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The Minister said that good competition would "create a win-win situation for producers, farmers, traders among others".