ISLAMABAD, Aug 8: The National Assembly’s Standing Committee on Finance and Revenue is meeting here on Thursday to discuss a proposal to amend the Monopoly Control Ordinance so as to award rigorous punishment as well as to increase the existing fines against the violators.
Informed sources said that Kanwar Khalid Younus, MNA of the Muttahida Qaumi Movement (MQM), had proposed five-year imprisonment and raising fine up to Rs2.5 million for those found guilty of illegal trade practices.
The existing law has no provision for sending the guilty to jail and lets him off with a fine of Rs100,000. The standing committee meeting will be chaired by its chairman Anwar Ali Cheema.
Currently, there is no law that sends the violators to jail and maximum fine is to the tune of Rs100,000.
Mr Yunus, who is also the member of committee, believed that the existing penalties were marginal which needed to be enhanced to restrict the violations of various provisions of the ordinance of the Monopoly Control Authority (MCA).
A concerned official when contacted admitted that the existing penalties were “ridiculously low” and should be reviewed. However, he said that the MCA had already moved a bill over the issue in which strict punishments have also been proposed.Meanwhile, sources said a senior level World Bank delegation held meetings recently with top officials of the ministry of finance, including Prime Minister's Advisor on Finance Dr Salman Shah, to expedite the conversion of MCA into a Competition Commission to stop illegal trade practices.
The World Bank delegation, headed by Mr Erick Menaz, sources said, asked the government to set up the commission which had been approved after two years by the federal cabinet last month.
The competition commission is expected to prevent cartalisation and restrictive trade practices by a group of influential businessmen.
A draft law seeking conversion of Monopoly Control Authority (MCA) into a Competition Commission proposes strict laws to check cartalisation and business manipulation which were reportedly being opposed by a powerful business lobby.
However, sources said various kinds of departmental hurdles had been removed to set up the Competition Commission for broadening its scope, including the merger of the companies.
The World Bank delegation asked the government to firm up an action plan to be supported by the donors for the drastic restructuring of the MCA and thus having a Competition Commission.
The World Bank mission was here to gauge the work so far done for having a Competition Commission. The Bank and the Department for International Development (DFID) of England are providing necessary financial support for restructuring of the MCA and its conversion into a Competition Commission.
Initially, they have expressed their willingness to offer roughly $15 million for the setting up of the new organisation.
The Bank is assisting in providing necessary funding package for establishing the proposed commission and its capacity building as a new institution.
The World Bank has been urging Pakistan to track down illicit cartels to regulate businesses in the absence of which it would be difficult to attract sizable local and foreign investment in the country.
The Bank believed that proven or suspected cartels have existed and many still exist in cement, sugar, ghee, autos, fertiliser and perhaps other industries which need to be investigated.
The Bank is also of the view that cartels are by a long way the chief impediment to competition in Pakistan and that there was a need to conduct a thorough inquiry as what types of anti-competitive conduct are most prevalent in Pakistan.
The MCA has investigated 103 cases of monopoly, including cars, batteries, tobacco, electrical, gases and chemicals.
Of course, this figure by itself provides no indication of abuse of monopoly position. At the very least, however, it suggests a wide field for inquiry.