Mrtp Presentation

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Birt an O jectives o

MRTP Act,1969

The MRTP Act 1969 is an important but verycontroversial piece of economic legislation. Theact came into force from 1st June 1970 and hasbeen amended in 1974,1980,1982,1984 and1991. This act applies to whole states exceptJ&K .

OBJECTIVES – Initially it had 3 objectives

To control monopolies and monopolistic tradepractices

Prevention of concentration of economic powerin few hands only.



Basic Provisions Of

MRTP Act MRTP Act can be divided into two major parts.

1.MONOPLIES VIS-A-VIS CONCENTRATION OF

ECONOMIC POWER

(i) The expansion, establishment of new undertakings,diversifications, mergers and amalgamations of suchunits are subject to approval by the central government.

(ii) In exceptional cases, the government may even forcean industrial undertaking to divide into a number of smaller divisions.



2. MONOPLISTIC, RESTRICTIVE AND

UNFAIR TRADE PRACTICES

Monopolistic Trade practices( Section 31 and 32):

A trade practice which has or is likely to have theeffect of :-i) maintaining the prices of goods or charges ofservices at unreasonable levels by limiting, reducingor other wise controlling the production, supply ordistribution of such goods or services;

ii) causing deterioration in the quality of goods orprovision of services or limiting technicaldevelopment or capital investment in goods orservices to the common detriment



Restrictive Trade Practices (Section 22to 36

and section 37 to 41):

The term restrictive trade practice isused for any strategy used by producersto restrict competition within a givenmarket.

(a) the setting of minimum prices;(b) the refusal to supply retailers that

stock the products of other competitors;(c) setting different prices for different

buyers (discriminatory pricing);



Unfair Trade Practice

Any trade practice which adopts one ormore of the following practices:

Making misleading advertisements

Selling hazardous products.

Hoarding in order to push up the price

level



The Industrial policy statement of 1991 bringdrastic changes in MRTP Act. These

provisions were criticized very much becauseof their negative impact on growth andcompetition. So following is the importantpoint regarding new policy:

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.



This act is not applicable to

(i) Any undertaking owned or controlledby a government (central or state)

(ii) Any undertaking the management of which has been taken over by thegovernment.

(iii) Any undertaking owned by acooperative society



ENFORCEMENT MACHINERY

(i) The Monopolies and Restrictive TradePractice Commission.

(ii) The Central Government and Supremecourt.

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