In the wake of competition watchdog CCI imposing Rs 6,300 crore penalty on cement companies for price cartelisation, the Builders' Association of India has called for an independent regulator for the industry on the lines of insurance regulator IRDA.
The Regulator should have quasi-judicial authority, BAI trustee D L Desai told reporters here last evening.
He said the Competition Commission of India's penalty of Rs 6,300 crore on 11 cement companies last month for violating provisions of the Competition Act, 2002 was a landmark judgement.
Desai suggested that the CCI follow the trend set by its sister bodies like tribunals of Income tax, sales tax and Excise Departments and direct cement companies to deposit 50% of the fine before accepting their petition.
BAI would oppose tooth and nail any petition from cement companies seeking a stay on recovery of the penalty, he said. The development in this case, Desai said, would be path-breaking in fighting cartelisation in vital commodity sectors.
According to him the fine was meagre compared to profits earned by the industry, which has an installed capacity of 320 million tonne as against the present demand of 250 MT. CCI's penalty on them was only 0.5 times their profits in FY10 and FY11, he said.
He pointed out that even the Parliamentary Standing Committee, headed by Shantha Kumar, had concluded that price escalation in the cement sector was profit-driven and had recommended setting up a regulator.
All free markets need a regulator not only to regulate the sector but to expedite grievances of stakeholders, he said.