What is MRTP Act?


Can somebody please explain what MRTP Act is?

Neyawn , musa


@Saur121 As you are aware, British had exploited India's resources immensely and prior to Independence, there was no competition existing in India among business houses. To simplify, there were no Ambani-Adani. Once we became independent, the focus was on equitable distribution of resources, thus Public Sector bloomed and private sector did not flourish to a very a large scale. They had to take many approvals and the time period was coined as License Raj. But there were few powerful industrialists even then who dominated the market, and such monopoly was detrimental to public interest. It was then in 1970 the MRTP Act was introduced.

Several committees like Hazari Committe, Subimal committee had recommended introduction of such an act.The MRTP Act was greatly influenced by its foreign counterparts such as Sherman Act and Clayton Act of USA etc. 

The law was enacted with the sole purpose of –Achieving the highest possible production with least damage to people while securing maximum benefit. Goals included: 

  • To ensure that the operation of the economic system does not result in the concentration of economic power in the hands of few,
  • To provide for the control of monopolies, and
  • To prohibit monopolistic and restrictive trade practices

It also provided for the establishment of MRTP Commission which was the regulatory authority to deal with the offences under the act. 

The act was extended to Public Sector Companies also by subsequent amendments. However, the act was misused - there was excessive government control, unnecessary delays by MRTP Commission, loopholes in the act which were being misused. Eventually, Raghavan Committee set up in 1999, recommended replacing MRTP with Competition Commission of India. 

The Competition Act, 2002 primarily deals with these aspects:

  • Anti – Competition Agreements
  • Abuse of Dominance
  • Combinations Regulation.
  • Competition Advocacy

The new Act also provided for establishment of a quasi-judicial body called Competition Commission of India (CCI) for registering of all the complaints and also a Competition Appellate Tribunal (COMPAT) to hear the appeal cases against CCI orders. The intent remains to restrict unfair trade practices and ensure there is healthy competition. 

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