In the wake of the competition watchdog CCI imposing a Rs 6,300-crore penalty on cement companies for price cartelisation, the Builders’ Association of India (BAI) has called for an independent regulator for the industry on the lines of the insurance regulator IRDA.
The regulator should have quasi-judicial authority, BAI trustee, Mr D. L. Desai, told presspersons here last evening.
He said the Competition Commission of India’s penalty of Rs 6,300 crore on 11 cement companies last month for violating the provisions of the Competition Act, 2002, was a landmark judgement.
Mr Desai suggested that the CCI follow the trend set by its sister bodies, including the tribunals of income-tax, sales tax and the Excise Department, and direct cement companies to deposit 50 per cent of the fine before accepting their petition.
BAI would oppose tooth and nail any petition from cement companies seeking a stay on recovery of the penalty, he said.
The development in this case, Mr Desai said, would be path-breaking in fighting cartelisation in vital commodity sectors.
According to him the fine was meagre compared to profits earned by the industry, which has an installed capacity of 320 million tonnes as against the current demand of 250 mt. CCI’s penalty on them was only 0.5 times their profits in 2009-10 and 2010-11, he said.
He said even the Parliamentary Standing Committee, headed by Mr Shantha Kumar, had concluded that price escalation in the cement sector was profit-driven and had recommended setting up a regulator.
“All free markets need a regulator not only to regulate the sector but to expedite grievances of stakeholders,” he said.