The Hindu Business Line : Laws against cartelisation

At present, issues concerning “cartelisation” are handled by the MRTP Commission. The MRTP Act is clearly misplaced in a growing economy like India and is anti-reform. Though the Competition Act has been enforced in 2002, to replace the draconian MRTP Act, it is non-functional to a large extent.

In a free market economy like ours, stemming the price rise through Governmental fiat is not the way forward. Having said that, to prove the existence of cartelisation and misconduct at marketplace, any government would need evidence, especially in the case of commodities, where demand exceeds supply.

It is, therefore, of utmost importance to fully empower the Competition Commission set up by the Competition Act 2002 to conduct an economic analysis of pricing patterns, market structure, business practices and consumer behaviour in the industries/sectors alleged to be involved in the practice of cartelisation. K. M. Shravan Dharmaraj, Chennai

The Finance Minister had expressed doubts whether steel companies are acting as a cartel. The rise in steel price results in high production costs of many products. The law can be made effective only by implementing it. But before such a step, it has to be ascertained whether the price rise is really justified. Permitting export of iron-ore when indigenous steel price is soaring cannot be justified.

T. R. Anandan, Coimbatore

Cartelisation is almost akin to monopolisation, restricting industry output and raising or fixing prices in order to earn higher profits.

The Government is regularly issuing stern warnings against cartelisation. The real-estate industry is trying to hold the steel and cement companies responsible for the rise in the cost of construction.

R. R. Gnanasekaran, Madurai

Every business wants to maximise its profits. Steel and cement are important raw materials for construction and the cartelisation by these two industries is a serious issue and needs to be looked into at the earliest. If unaddressed, it might push up inflation. The Government should take stock of the situation and take necessary action to bring down the prices.

V. Venkitasubramanian, Kochi

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