Evolution of Competition Law in India: From Command and Control to Fair Market Dynamics
There is universal recognition that competition law is an important means of
ensuring abundant quality of goods and services at affordable prices for
consumers, apart from effectively addressing market manipulative trade practices
that manufacturers, sellers and suppliers are resorting to.
Competition has huge advantages in the form of encouraging innovation, cost
reduction, Availability of a variety of goods and services at competitive
prices, increased consumer choice and, ultimately, growth and inclusive economic
In fact, this realization has caused policymakers across many countries in the
world to adopt competition law that is suitable for their own economic
development in order to generate the competition process to promote fair markets
and protecting the interests of consumers. Promoting competition and curbing
baneful effects of Monopolies is one of the constitutional imperatives
visualized by the framers of the Indian Constitution.
The prevention of concentration of economic power to the detriment of public,
Control of monopolies and prohibition of monopolistic trade practices are the
Constitutional imperatives of the State policy.
The Industry Policy Resolutions Adopted and enforced prior to 1990 phased the
need to tune the State policy for Ensuring commanding heights to the public
sector, increasing control of the Government over the means of production and
control of monopolies.
Thus India after attaining independence in 1947, formulated and enforced the
policies comprising What are popularly known as command arid control laws,
rules, regulations, executive Orders etc., and which in fact formed the fulcrum
of the State economic policy for Over a half century.
Consequently, instead of working on measures that would generate national wealth
in the private and public sector, the Government of India was more interested in
putting measures in the economy that would control and regulate trade and
industry in the country. Profit, during those days was an unpalatable word and
big business was seen with suspicion by the Government.
The Government efforts and endeavor were focused mainly on ensuring that
monopolistic business organizations were not created. To achieve this goal, the
Government appointed a committee3to provide necessary support and suggest
suitable recommendations. Basing on the report of the committee, the Government
enacted a law in 1969 called "Monopolies and Restrictive Trade Practices Act,
The principal purpose of the Monopolies and Restrictive Trade Practices Act,
1969 as envisaged in its preamble, was to ensure that there was no concentration
of economic power and control of monopolies and prohibition of monopolistic and
restrictive trade practices. In other words, business should not become so big
or resort to such policies that the consumer becomes the victim.
Accordingly, a MRTP Commission was constituted to administer and enforce the
Monopolies and Restrictive Trade Practices Act, 19695.One of the main goals of
the MRTPA was to encourage fair play in the market, apart from promoting healthy
Economic Reforms And Its Impact On The MRTP Act, 1969
The Monopolies and Restrictive Trade Practices Act, 1069 put in place a
regulatory mechanism and operated in a framework of checks and balances, and in
the philosophical milieu of "Laissez Faire". It sought to curb the concentration
of economic power in private hands to the common detriment of the community,
likewise, it encompassed monopolistic, restrictive and unfair trade practices6
that are baneful and prejudicial to the public interest.
The purpose was to condone the 'Good 'and condemn the bad2.' The MRTP Act was
enacted in the era of license and permit raj that advocated stridently in
imposing controls on trade and industry. During those days monopoly per se in
trade and industry was perceived as abominable and bad in law.
Though public interest and consumer welfare were at the foundation of the said
Act, yet the concept of Market economy was at its nascent and rudimentary stage
during those days. Since 1970, the Monopolies and Restrictive Trade Practices
Act, 1969 was amended several times to suit the changing times and conditions of
the Indian economy.
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