The following points highlight the top four measures undertaken by government to combat the growth of monopolies. The measures are: 1. Putting Restriction on the Entry of Large Business Houses in Different Industries 2. The MRTP Act and MRTP Commission 3. Expansion of the Public Sector and the Joint Sector 4. Encouragement to Small and Medium Industries.
Measure # 1. Putting Restriction on the Entry of Large Business Houses in Different Industries:
The Government, through the announcement of its industrial policies has been restricting the entry of large business houses in a good number of industries of national importance. Moreover, a good number of items were reserved exclusively for their development under small scale and cottage industries.
But unfortunately, the impact of such policy was reduced considerably by the Government as on the ground of export promotion and import substitution, the Government permitted the large industrial houses to enter into those restricted areas so as to face the acute problem of foreign exchange.
Measure # 2. The MRTP Act and MRTP Commission:
With the sole motive to control monopolies of large business houses of the country, the government adopted the MRTP Act in 1969 and also set up a MRTP Commission in 1990 for such purpose. In the MRTP Act, good number of agreements was specified and all these were kept under the purview of the commission.
Undertakings under the purview of MRTP Act were obligatory and required to obtain government approvals whenever they proposed for the expansion of their activities.
Measure # 3. Expansion of the Public Sector and the Joint Sector:
The expansion of the public sector was mostly guided by two important objectives, i.e., it serves as an important agent for economic growth of the country and it also restrict the tendencies of concentration of economic power in the hands of a few.
Had there been no development or the public sector, all these industries would have been set up under the private sector by the large industrial houses and would have resulted in much concentration of economic power in the country.
Regarding the joint sector, both the Government and the private sector have a partnership in such enterprises. This has also restricted the concentration of economic power in the hands of large industrial houses. The very idea of curbing concentration of economic power through the setting up of joint sector was also conceived by the Dutt Committee initially.
Measure # 4. Encouragement to Small and Medium Industries:
From the very beginning of the development process, the Government has been encouraging the development of small and medium industries both with the considerations for employment generation and also to control the growing tendencies of concentration of wealth and economic power in the hands of large industrial houses.
However, this strategy of the Government to control the concentration of economic power could not achieve much result in the desired direction.