The competition act of 2002 was passed by the parliament of India so as to form a commission to oversee the business operations of companies and individuals in the country following fair practices of competition and economic growth of the country. This act applies to the whole of republic of India except for Jammu and Kashmir. It applies for agreement, acquisition or any cartel involving business transactions that has an economic impact for the country.
Objectives of Competition Act
(I) The first and foremost duty of the commission is to exercise control over the practices in competition, which are having adverse effect on competition.
(II) In addition to this, the commission also targets to introduce healthy measure for promotion and sustenance of competition.
(III) It largely targets to protect the interests of the consumers and give fair trade practices their due place.
(IV) The Commission has also kept the target to place its opinion on the issues about competition prevailing in India.
(V) It would also act on a reference received from a statutory authority, if the same has been undertaken by any law in order to promote competition and create awareness in public, and inculcate training on majors issues in competition.
Functions of Competition Act
The Act establishes a Commission which is duty bound to protect the interests of the free and fair competition (including the process of competition), and as a consequence, protect the interests of consumers. Broadly, the Commission’s duty is:-
- To prohibit the agreements or practices that have or are likely to have an appreciable adverse effect on competition in a market in India, (horizontal and vertical agreements / conduct)
- To prohibit the abuse of dominance in a market
- To prohibit acquisitions, mergers, amalgamations etc. between enterprises which have or are likely to have an appreciable adverse effect on competition in market(s) in India.
The Foreign Exchange Management Act, 1999 (FEMA)
The Foreign Exchange Management Act, 1999 (FEMA) is an Act of the Parliament of India “to consolidate and amend the law relating to foreign exchange with the objective of facilitating external trade and payments and for promoting the orderly development and maintenance of foreign exchange market in India”. It was passed in the winter session of Parliament in 1999, replacing the Foreign Exchange Regulation Act (FERA). This act makes offences related to foreign exchange civil offenses. It extends to the whole of India., replacing FERA, which had become incompatible with the pro-liberalization policies of the Government of India. It enabled a new foreign exchange management regime consistent with the emerging framework of the World Trade Organization (WTO). It also paved the way for the introduction of the Prevention of Money Laundering Act, 2002, which came into effect from 1 July 2005.
Features of FEMA
- Activities such as payments made to any person outside India or receipts from them, along with the deals in foreign exchange and foreign security is restricted. It is FEMA that gives the central government the power to impose the restrictions.
- Without general or specific permission of the MA restricts the transactions involving foreign exchange or foreign security and payments from outside the country to India – the transactions should be made only through an authorized person.
- Deals in foreign exchange under the current account by an authorized person can be restricted by the Central Government, based on public interest generally.
- Although selling or drawing of foreign exchange is done through an authorized person, the RBI is empowered by this Act to subject the capital account transactions to a number of restrictions.
- Residents of India will be permitted to carry out transactions in foreign exchange, foreign security or to own or hold immovable property abroad if the currency, security or property was owned or acquired when he/she was living outside India, or when it was inherited by him/her from someone living outside India.