The Hindu Business Line : Competition Bill passed in Lok Sabha

THE Finance Minister, Mr Jaswant Singh, on Monday made it clear that the multinational companies would not be allowed to abuse market or indulge in unfair trade practices due to their sheer size or financial muscle, even as the Lok Sabha passed the Competition Bill, 2001, which seeks to establish a new regulatory body to replace the Monopoly and Restrictive Trade Practices Commission (MRTPC).

Further, the Finance Minister assured the House that the new measure was aimed at promoting investment and competition and would enable domestic companies to grow in size to become world-class entities.

Responding to the suggestions relating to selection procedure for the proposed Competition Commission of India (CCI), Mr Singh said the Government would not keep the ministers in the selection committee in deference to recommendations made by the Standing Committee.

"We will frame rules for the selection committee and make it as broad based as possible," he said.

Stating that the proposed CCI would be a quasi-judicial body and a regulator such as Telecom Regulatory Authority (TRAI) and Insurance Regulatory and Development Authority (IRDA), Mr Singh said that the Government would vest powers to issue policy guidelines including in cases where there was clash of interest between two regulators.

Further, Mr Singh dismissed the criticism that the Bill was brought under pressure from the European Union and WTO.

He said the move was aimed at "removing the lid" on investment and growth of domestic companies by repealing MRTP Act of 1969.

The new provisions would, in fact, give India more bargaining powers vis-a-vis WTO, he added.

Assuring protection to small, village and cottage industry as well as handicraft sector through special provisions and powers to the Government to give policy directions to the CCI, Mr Singh said that the CCI would curb abuse of dominance instead of checking the size.

Further, while dispelling fears that lack of provisions on size and monopoly would endanger Indian industry which would become an easy target for MNCs for acquisition, the Finance Minister said, "MNCs will be prohibited by law to enter unfair trade practices.

Extent of the law will be stretched back to the country of their origin". As per provisions of the Bill, only those companies with the assets of more than Rs 1,000 crore or turnover of over Rs 3,000 crore would come under regulatory provision when they either singularly or in combination go for acquisition.

Mr Singh said only 100 of the 6,000 Indian companies were beyond this threshold limit and the new provisions do not prohibit the size of investment.

After the passage of the Bill in Parliament, MRTPC would not be allowed to take any new cases and it would have to dispense all the existing ones within a year, the Finance Minister said, adding that all the unfair trade practices cases having bearing on consumers would be transferred to Consumer Courts.

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