Sept. 7 – The Competition Commission of India (CCI) has implemented new legislation that will encourage cartel members to expose other members in exchange for lesser penalties.
Currently, the penalties for collective price fixing in India includes fines of up to three times the profit or ten percent of turnover. Depending upon the significance of the disclosure, cartels can be dismantled and the informant may escape without penalty. The legislation assures participants of full confidentiality and non-disclosure in addition to penalty waivers.
The use of cartels in India has been rife over the years. The government is keen to adopt measures to create a level playing field across all industry sectors.
Prices of commodities have been soaring in this country for past 3 years significantly. This situation may be possible due to the demand-supply gap. However, in many sectors such as real estate, and even agricultural products like sugar, vegetables etc. are in the run for price carteling, either at small level or at bigger level. These concerns needs to be addressed.
What is the most important is that the market has been let to run on its own and there is little or nominal control by the government. Free Market principles and liberalization/privatization have not been properly understood by governments and the bureaucrats. Therefore, the businesses are distorting the market in a way, they want it to which is detrimental to the whole system and the poor in particular.