3. Amendment of Monopolies and Restrictive Trade Practices (MRTP) Act, 1969

An important objective of India’s earlier industrial policies was to prevent emergence of private monopolies and concentration of economic power in a few individuals. Accordingly, Monopolies and Restrictive Trade Practices (MRTP) Act, 1969 was enacted and MRTP Commission was set up as a permanent body to periodically review industrial ownership, advice the government to prevent concentration of economic power, investigate monopolistic trade practices and inquire into restrictive trade practices, which are prejudicial to public interest. An MRTP firm was mainly defined in terms of asset size. An MRTP company had to obtain prior approval of the government for setting up a new enterprise as well as for expansion. However, MRTP Act was applicable only to private sector companies.

Since 1991, the MRTP Act has been restructured and pre-entry restrictions have been removed with regard to prior approval of the government for the establishment of a new undertaking, expansion, amalgamation, merger, take over, and appointment of directors of companies. The asset restriction and market share for defining an MRTP firm has been done away with. The MRTP Act is now applicable to both private and public sector enterprises and financial institutions. Today, only restrictive trade practices of companies are monitored and controlled. The MRTP Act has been replaced by the Competition Act, 2002. This law aims at upholding competition in the Indian market. The Competition Commission has been established in 2003, which mainly controls the practices that have an adverse impact on competition.