New Delhi: Within days of the government charging the steel industry with cartel-like behaviour, the Competition Commission of India (CCI), the body responsible for ensuring fair competition, is slated to meet steel producers next week.
The meeting will be attended by representatives of Tata Steel Ltd, Essar Steel Ltd, Steel Authority of India Ltd, JSW Steel Ltd, Ispat Industries Ltd, Cold Rolled Steel Manufacturer’s Association, Indian Stainless Steel Development Association and Indian Steel Alliance, among others.
Cartelization fears? Steel minister Ram Vilas Paswan has asked Prime Minister Manmohan Singh to consider setting up a regulator.
People familiar with the matter said that CCI in a communication to steel companies and associations has sought their assistance and cooperation in the industry’s compliance with the Competition Act, 2002.
With inflation hovering more than 7%, the government is concerned that metal prices, especially that of steel, are contributing to inflationary pressures. Steel prices alone have risen by 49% in the past one year.
Finance minister P. Chidambaram had earlier said in the Lok Sabha that “cement and steel manufacturers are behaving like a cartel... If their behaviour does not change, government will not hesitate to take tough measures.”
Minister for corporate affairs Prem Chand Gupta too had held out the threat of the Monopolies and Restrictive Trade Practices Commission (MRTPC), saying that the regulator had found possibilities of cartelization. “Government might ask MRTPC to look into it,” he had said. If the commission suspects cartelization in any entity, it can penalize the cartel members up to three times their net profit or 10% of its turnover, whichever is higher. At the same time, the commission can grant leniency to any member who provides vital and true information about the cartel.
“The CCI, in such cases, would levy lesser penalty or even zero penalty,” a CCI official said.
Steel Minister Ram Vilas Paswan has asked Prime Minister Manmohan Singh to consider setting up a regulator, a move the steel industry had likened to putting the producers between the two prongs of a pincer. It has voluntarily offered to cut prices and hold their price line for the next 2-3 months.