December 03, 2008

Indian watchdog may take action against steel firms – Report

India’s Planning Commission, echoing union finance minister Mr P Chidambaram's assertion that cement and steel firms were behaving in a cartel like manner, has warned that Competition Commission could take action against steel producers in case they do not lower prices.

Mr Montek Singh Ahluwalia deputy chairman of Planning Commission said that "It would be in the interest of steel manufacturers if they reduce prices. Otherwise the Competition Commission could take action against them."

Pointing out that steel prices have gone up substantially this year, he said that steel manufacturers were exploiting the market by raising the rates to encash the rise in demand. He added that there is a usual tendency among manufacturers to raise prices whenever there is rise in demand and shortage of supply, but steel manufacturers have raised prices beyond all limits.

When asked how a non functional Competition Commission could take action against the cartel of steel producers, he said that it could be made functional through government support and could take action against any alleged cartel.