Joel Rebello
 
Mumbai: The much-delayed Competition (Amendment) Act, 2007 would replace the Monopolistic and Restrictive Trade Practices (MRTP) Act, 1969, in the next “3-4 months”, a senior government official said.

The Act will give the Competition Commission of India (CCI) powers to prevent cartelisation and monopolies in trade, but corporate India is worried it will be another tool in hands of the government to delay projects.

Augustine Peter, economic adviser to the CCI, said the MRTP Act did not have sufficient powers in preventing monopolies and cartelisation and hence the Competition Act was enacted in 2002 and amended in September 2007.

“Cartelisation should not be a concern of the government, the competition authority should have the authority…we had a vacuum with the existing laws because MRTP Act didn’t have full powers. Once the Commission is in place it will have the required powers,” Peter said on the sidelines of a seminar on competition law organised by the Confederation of Indian Industry (CII).

A committee has been formed to appoint seven members, including the chairman of the CCI.

“The committee will invite applications from professionals (like CAs, economists) and members of the public in the next 2-3 days after which the names would be scrutinised and the committee would recommend 21 names to the government for the seven member committee,” Peter said.

It’s been more than seven years since the CCI was formed and seven months since the Competition Act was amended and notified by the President. However, competition laws and authority in India are still not active.

Since October 2003, former secretary Vinod Dhall is the single member and acting chairman of the CCI.

However, Dhall’s 5-year tenure is ending in November. CCI norms say that a member can continue up to 65 years of age, or five years of service, whichever is earlier.

How long the CCI takes to start is of importance in the current context when the government has declared an all-out war against cement, steel and tyre companies accusing them of cartelisation.

However, corporate India is worried that another regulator would increase the roadblocks for doing business in India.

JJ Irani, director and board member at Tata Sons, said the industry is worried because it was also bitten by the MRTP Act earlier. He said for the Competition Act to succeed, cases would have to be settled within a time frame and the law will have to be practical, especially with relation to mergers and acquisitions.

“Corruption and interference should be kept to the minimum. Industry does not want mandatory pre merger disclosures. The powers that be say that we will have to go to the parliament to change the laws…and the argument is that regulation would take care of all our worries but why not have a law that is both practical and amiable,” Irani said.

Irani said that if there is a mandatory pre-merger disclosure then competitors will ensure that the merger does not go through.

However, Augustine Peter  said that industry fears are misplaced. “Out of the 100 cases of mergers only 10 have any problem and even within the 10, about 8 or 9 can be handled by minor directions to the company involved. Only 1% of the cases have any problem,” he said.

Source : DNAIndia