Presentation On Mrtp Act

Birth and Objectives of MRTP Act The MRTP Act 1969 is an important but

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very controversial piece of economic legislation. The act came into force from 1st june 1970 and has been amended in 1974,1980,1982,1984 and 1991. This act applies to whole states except J&K. OBJECTIVES – Initially it had 3 objectives To control monopolies and monopolistic trade practices To regulate the concentration of economic power to the common detriment.

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To prohibit restrictive trade practices unless any of them can be justified to be in the public interest. The Monopolies Amendment Act 1984 has introduced a 4th objective. Regulation of unfair trade practices. After the amendment of act in 1991, the objectives now are: Regulating unfair trade practices. Controlling monopolistic trade practces.

So after going through these objectives of MRTP Act we can say that this act provides that operation of the economic system does not result in the concentration of economic power to the common detriment, for the control of the monopolies, for the prohibition of monopolistic and restrictive trade practices and for matters connected there with.

Basic Provisions Of MRTP Act  

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MRTP Act can be divided into two major parts. 1.MONOPLIES VIS-A-VIS CONCENTRATION OF ECONOMIC POWER (i) The monopolies and industrial units which are constructed to have a concentration of economic or monopoly power are identified. (ii) Such units are to made to register themselves (iii) The directors of such organizations are brought under some scrutiny with reference to the number of directorships held by them.

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(iv) The expansion, establishment of new undertakings, diversifications, mergers and amalgamations of such units are subject to approval by the government. (v) In exceptional cases, the government may even force an industrial undertaking to divide into a number of smaller divisions.

This act is not applicable to 

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(i) Any undertaking owned or controlled by a government (central or state) (ii) Any undertaking the management of which has been taken over by the government. (iii) Any undertaking owned by a cooperative society (iv) Any public financial institution. (v) Any trade union formed for their own reasonable protection.

2. MONOPLISTIC, RESTRICTIVE AND UNFAIR TRADE PRACTICES The Industrial policy statement of 1991 bring drastic changes in MRTP Act. These provisions were criticised very much because of their negative impact on growth and competition. So following are the important points regarding new policy: (i) Prior approval of the central government for establishment of new undertakings, expansion of existing undertakings, merger, amalgamation and take over and appointment of certain directors will no longer be required.

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(ii) The provisions regarding restrictions on acquisition of transfer of shares are proposed to be appropriately incorporated in the Companies Act. (iii) The provisions of MRTP Act , will be strengthened in order to enable the MRTP commission to take appropriate action in the respect of the monopolistic, restrictive and unfair trade practices. (iv) Also the MRTP commission will be empowered and encouraged to investigate on complaints received from individual consumers or classes of consumers.

ENFORCEMENT MACHINERY 

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(i) The Monopolies and Restrictive Trade Practice Commission. (ii) The Director General of investigation and registration. (iii) The Central Government and Supreme court.