16 June 2003

COMPETITION COMMISSION TO KEEP FREE ENTERPRISE UNDER CHAINS

From Jal Khambata

NEW DELHI: The Competition Commission of India that succeeds the Monopoly and Restrictive Trade Practices Commission (MRTPC) to oversee mergers, acquisitions, amalgamations and takeovers of the big corporate bodies came into being on Monday with the appointment of two retiring bureaucrats as its chairman and member-secretary.

Selection of other members of the Commission will follow soon but it will become operational only from October 1, the Commerce Ministry sources said. The MRTPC is to be wound up by this year-end but that should not bring cheers to the free enterprise as the Commission is a new mechanism to keep them under chains.

Union Commerce Secretary Deepak Chatterjee takes over as chairman of the new commission from September 16, with a tenure of five years while Company Affairs Secretary becomes its member-secretary from June 27 after his retirement. Special Power Secretary MKK Saldhana, a 1968 batch IAS officer, is the new Company Affairs Secretary.

The Commission will become opeational only from October 1 after the chairman assumes the charge while the next three months will be a trying time for Vinod Dhal to establish the secretariat from scratch. The MRTPC office will provide him the logistic support.

The Prime Minister approved Chatterjee's name as the first chairman of the Commission from a panel of five officials recommended bythe search committee headed by Union Law and Commerce Minister Arun Jaitley. Deputy Prime Minister L K Advani's consent has been secured for the appointments, the PMO sources said.

Over 100 large corporate houses who assets are more than Rs 1000 crores or whose annual turnover is more than Rs 3000 crores will come under the regulatory scrutiny of the commission, an Act for which was passed in the winter session of Parliament last year.

As per the government plans, the Commission will not start cracking whip from day one as in becomes operational in three phases. The first year would be focused on acquainting all market players to have a clear understanding of the Competition Act. In the second year, it will start looking into the trade practices that fall in the category of anti-competition.

Mergers and acquisitions having an adverse impact on competition will be regulated by the commission only from the third year of its existence.

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