Thursday, Feb 27, 2003
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He said the recent economic legislation such as the Competition Act had been introduced to ensure that industry maintained fair trade practices though no law could be foolproof. Another aim was to make these laws more relevant in the market economy and deal with lacunae.
Addressing a conference on economic legislations organised by FICCI, he said the link between trade and competition policy was likely to be discussed at the WTO as it was on the "Singapore issues".
Regarding the new economic legislation, he said initial feedback from banks on the Securitisation law showed that the impact was positive and debtors were now chasing the creditors in making payments to prevent seizure of their assets.
In this context, he said an informal exercise carried out by him over the last two months revealed that in 10 years of the implementation of debt recovery tribunals (DRTS), financial institutions had succeeded in recovering a mere five per cent of their dues. He also noted that non-performing assets (NPAs) were roughly in the range of Rs. 96,000 crores, of which actual recovery by banks was only Rs. 4000 crores.
Similarly, while the competition policy sought to encourage mergers and amalgamations, industry would have to examine the possibility of trans-border jurisdictions arising in some instances where a merger could impact a third country. Mr. Jaitley said the present competition law dealt with four anti-competition practices such as collusive bidding and reducing production of items as against 14 under the Monopolies and Restrictive Trade Practices Act.
On the Money Laundering Bill, he said the main objective of the legislation was to freeze money being used for illegal activities such as terrorism, narcotics and ransom.
Regarding the industry's views on the quality of people heading these organisations, he agreed that the success of the commissions and tribunals really depended on those at the helm. He conceded that often the choice was restricted to bureaucrats and retired judges who were not necessarily the best suited to head them.
Earlier, the FICCI president, A.C. Muthiah, said industry chambers such as FICCI believed that due consideration had not been given to the recommendations made by chambers of commerce while passing such legislations.
Underlining the need for dispensing with outmoded legislations, he said some of the newly enacted laws had serious implications for the industry and hence need to be reviewed.
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