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Birth and Objectives

of MRTP Act
The MRTP Act 1969 is an important but

very controversial piece of economic
legislation. The act came into force from
1st june 1970 and has been amended in
1974,1980,1982,1984 and 1991. This act
applies to whole states except J&K.
 OBJECTIVES – Initially it had 3
 To control monopolies and monopolistic
trade practices
 To regulate the concentration of economic
power to the common detriment.
 To prohibit restrictive trade practices
unless any of them can be justified to
be in the public interest.
 The Monopolies Amendment Act
1984 has introduced a 4th objective.
 Regulation of unfair trade practices.
 After the amendment of act in 1991,
the objectives now are:
 Regulating unfair trade practices.
 Controlling monopolistic trade
So after going through these
objectives of MRTP Act we can say
that this act provides that operation
of the economic system does not
result in the concentration of
economic power to the common
detriment, for the control of the
monopolies, for the prohibition of
monopolistic and restrictive trade
practices and for matters connected
there with.
Basic Provisions Of
 MRTP Act can be divided into two major parts.
 (i) The monopolies and industrial units which
are constructed to have a concentration of
economic or monopoly power are identified.
 (ii) Such units are to made to register
 (iii) The directors of such organizations are
brought under some scrutiny with reference
to the number of directorships held by them.
 (iv) The expansion, establishment of new
undertakings, diversifications, mergers
and amalgamations of such units are
subject to approval by the government.
 (v) In exceptional cases, the government
may even force an industrial undertaking
to divide into a number of smaller
This act is not applicable to
 (i) Any undertaking owned or controlled by
a government (central or state)
 (ii) Any undertaking the management of
which has been taken over by the
 (iii) Any undertaking owned by a
cooperative society
 (iv) Any public financial institution.
 (v) Any trade union formed for their own
reasonable protection.
The Industrial policy statement of 1991 bring
drastic changes in MRTP Act. These
provisions were criticised very much
because of their negative impact on
growth and competition. So following are
the important points regarding new policy:
(i) Prior approval of the central government
for establishment of new undertakings,
expansion of existing undertakings,
merger, amalgamation and take over and
appointment of certain directors will no
longer be required.
 (ii) The provisions regarding restrictions on
acquisition of transfer of shares are
proposed to be appropriately incorporated
in the Companies Act.
 (iii) The provisions of MRTP Act , will be
strengthened in order to enable the MRTP
commission to take appropriate action in
the respect of the monopolistic, restrictive
and unfair trade practices.
 (iv) Also the MRTP commission will be
empowered and encouraged to investigate
on complaints received from individual
consumers or classes of consumers.
 (i) The Monopolies and Restrictive
Trade Practice Commission.
 (ii) The Director General of
investigation and registration.
 (iii) The Central Government and
Supreme court.