Ministry moves Cabinet note to set up NCPA

The Ministry of Consumer Affairs has moved a Cabinet note for setting up the National Consumer Protection Authority (NCPA), which is likely to hear a majority of cases that are before India’s anti-monopoly body.

The move is aimed at filling the void after the Monopolies and Restrictive Trade Practices Commission (MRTPC) is replaced by the Competition Commission of India (CCI), the proposed anti-trust body.

Once set up, the NCPA is likely to deal with cases under “unfair trade practices”, as the competition panel would only be concerned at macro issues like abuse of dominance by a market leader or a monopoly, said a senior Ministry for Corporate Affairs (MCA) official.

At present, the MRTPC and its investigation arm functions under the MCA. The CCI is yet to be notified by the Centre. But once notified, the MRTPC would function for two years and then it would be disbanded.

Also, the person who can register complaints with the consumer affairs department is also expected to change. At present, wholesale dealers or traders, who do not consume but sell to others, are defined as “customer” and not as “consumer”. Further details of the Cabinet note were not available. When contacted, Yashwant Bhave, secretary of consumer affairs department, did not respond.

The creation of the NCPA is significant as more than 80 per cent of cases handled by the MRTPC belong to “unfair trade practices”.

“There is need to deal effectively with deceptive practices, including misleading advertisements. Besides, there would be a gap in legislation to be caused by the proposed winding up of the MRTPC with respect to unfair trade practices. The gap can be filled in by establishing a National Consumer Protection Authority through enactment of a National Consumer Protection Authority Act,” the Planning Commission said in a note on “Consumer Protection and Competition Policy” in the current five year plan period ending March 2012.