History of Competition Law in India. Its an Emerging Area in the Field of Law

Topics: Monopoly, Competition law, Government of India Pages: 9 (2712 words) Published: January 28, 2012
The establishment of British Rule in India left the Indian economy crippled. India served as a dumping ground for the machine made cloth and other factory goods from England and was reduced to a mere raw material supplying colony. After winning Independence against the political competition posed by the British Rulers for many years, India, post independence, started its era of fighting against economic competition, the only difference being that the threat which India faced was now not only restricted to the British rulers but to the whole world which considered India as a dream destination for celebrating the advantages of ‘Globalization and Liberalization’. Winning Independence gave way to the entrance of many big firms into the Indian market exploring opportunities in various trades and businesses. The condition of the Indian market was very weak and vulnerable to face the might of these foreign firms, because India at that time neither had the resources nor the skilled workforce to convert, if at all, such resources to compete with these foreign firms. The technological and scientific capabilities were poor, industrialization was limited and lopsided. Agricultural sector exhibited features of feudal and semi-feudal institutions, resulting into low productivity. In brief, poverty was rampant and unemployment was widespread, both making for low general standard of living. These were the socio-economic settings in which the founding fathers had to chart out a programme of nation-building.

The Indian Government, although did not have the weapons to wage war against such fierce competition against the foreign firms but the Government did not fail to rule out the possible defences to resist the competition posed by the foreign firms to protect its own domestic market. The ‘Monopolies and Restrictive Trade Practices Act of 1969’ turned out to be the most sought after ‘Defence Mechanism’.

The history of the Indian competitive legislation goes back to the Monopolies Enquiry Commission. In 1964, when the Indian democracy was in its nascent state – barely 17 years old – the Government of India appointed the Monopolies Enquiry Commission to enquire into the effect and extent of concentration of economic power in private hands and prevalence of monopolistic and restrictive trade practices in important economic activity other than agriculture. The commission submitted its report along with the Monopolies and Restrictive Trade Practices (MRTP) Bill, 1965 and on June 1st The Monopolies and Restrictive Trade Practices Act came into existence on 27th December, 1969. The preamble to this enactment provided it to be An Act to provide that the operation of the economic system does not result in the concentration of the economic power to the common detriment, for the control of monopolies, for the prohibition of monopolistic and restrictive trade practices and for matters connected therewith or incidental thereto. Therefore, in common parlance, the MRTP Act, 1969 aimed at preventing economic power concentration in a few hands, the intention behind this was to avoid damage, with the end result protecting consumer interest and the economic society at large.

Post independence, when the Constitution of India, that is, the Blanket-cover regulator, was being enacted and adopted, the most important Articles which provided for recognising the effect of the MRTP Act, and preventing and avoiding damage were Article 38 and Article 39 of the Constitution, which was adopted and enacted and came into effect on the 26th day of November, 1949. Article 38 of the Constitution provides for the Directive Principles of State Policy which mandates upon States to secure a social order for the promotion and welfare of the people. This provision recognised the need to eliminate and minimise the inequalities in income, which applied not only to the individuals but also to the groups in different areas. However, the MRTP Act...
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