proposed new Competition Law in India has become mired in controversy due
to ignorance, confusion and resistance by the protectionist
and right-wing elements. This matter was carried in the Financial
Times, while all Indian newspapers carry it regularly. Herewith please
find copy of a news item in the FT and a rejoinder letter published by
CUTS in the FT for your information. More on it in further bulletins.
Indian cabinet passes competition bill
MOVE PROPOSALS TO BE PRESENTED TO PARLIAMENT LATER THIS MONTH DESPITE
Times; Jun 27, 2001
By ANGUS DONALD
The Indian cabinet yesterday approved a controversial bill
designed to protect consumer interests from monopolistic companies, in the
face of strong opposition from anti-reform elements in the government.
competition bill will be introduced in parliament at the start of the
monsoon session, which begins on July 23.
Jaitley, justice and company affairs minister, said: "There are three
main ingredients of the bill - checking the abuse of anti- competition
agreements and the abuse of a dominant position, and regulating the
procedure related to acquisitions and mergers."
approval of the proposed bill is seen as a move forward by the government
with its second-generation of economic reforms. The second wave of
reforms, following the first begun in 1991, seemed to have stalled after a
series of scandals weakened the government's pro- reform camp headed by
Prime Minister Atal Behari Vajpayee.
bill, if it becomes law, will replace the Monopolies and Restrictive Trade
Practices Act of 1969 and will call into being a new regulatory body, the
Competition Commission of India (CCI).
principal object of the CCI will be to ensure competition," said Mr
Jaitley. All mergers and acquisitions where the assets of one company
exceeds Rs10bn (Pounds 150m) or where turnover exceeds Rs30bn will be
examined by the regulator.
bill has been opposed by members of the trade and industry ministry, who
claim it favours multinational corporations because, they say, it was
framed under pressure from the World Trade Organisation and the European
has a strong lobby, both in and out of government, led by the rightwing
Hindu revivalist groups, which are against liberalisation and the spread
of globalisation and which advocates a return to the isolationist
principles of swadeshi, or self-reliance.
LETTERS TO THE EDITOR:
Ministry and consumers back India's strong competition law
Times; Jul 9, 2001
By PRADEEP MEHTA
Mr Pradeep S. Mehta.
Consumers and consumer groups are overjoyed with the new bill on
competition brought forth in India ("Indian cabinet passes
competition bill", June 27) as the existing competition law, the
monopolies and restrictive trade practices act, is hopeless for the
purposes of regulating anti-competitive behaviour of both domestic and
foreign enterprises. Indeed there is a strong lobby in India against
liberalisation but there is an equally strong lobby for it.
consumer movement in India has been lobbying for a new competition law
ever since the reforms were introduced in 1990. For your correspondent to
say that "it has been opposed by members of the trade and industry
ministry, who claim it favours multinational corporations because, they
say, it was framed under pressure from the World Trade Organisation and
European Union", is absurd for two reasons.
the ministry does not have "members" but ministers and civil
servants; second, the government of India is in favour of a strong
competition law, precisely to check the anti-competitive acts of
multinationals and domestic enterprises. Even the prime minister of India
has stated so publicly.
there is pressure from the European Union and others on issues such as
investment rules, on which India has been unable to agree because there is
no evidence to show that any multilateral rules will lead to higher flows
to developed countries.
the contrary, India and many multinational corporations are strongly
interested in the movement of people, so that labour can move as freely as
S. Mehta, Secretary-General, CUTS