MRTP ACT, FERA ACT, MRTP ACT, FERA ACT, INCENTIVES FOR INCENTIVES FOR

EOU’S EOU’S

PRESENTED BY: PRESENTED BY: HARSH JAINHARSH JAIN

PGDM (FINANCE),PGDM (FINANCE),ROLL-5130ROLL-5130

MRTP ACT, 1969MRTP ACT, 1969 This Act was enacted:• To ensure that the operation of the economic

system does not result in the concentration of economic power in the hands of law.

• To provide for the control of monopolies.• To prohibit monopolistic and restrictive trade

practices.The MRTP Act extends to the whole of India except Jammu and Kashmir.

APPLICATION OF THE APPLICATION OF THE ACTACT

This Act shall not apply to:

• Any undertaking owned or controlled by the Government Company.

• Any undertaking owned or controlled by a corporation.

• Any undertaking owned by a co-operative society formed and registered under any Central, Provincial or State Act.

• Any financial institution.

UNFAIR TRADE PRACTICEUNFAIR TRADE PRACTICE• Misleading advertisement and false representation.• Falsely representing that goods and services are of

a particular standard, quality, grade, composition or style.

• Falsely representing any record hand renovated or old goods as new.

• Representing that goods or services, seller or supplier have a sponsorship or affiliation which they do not have.

CONT….CONT….• Making a false or misleading facts disparaging

the goods, services or trade of another person or concern.

• Giving to public any warranty, guarantee of performance that is not based on an adequate test or making to public a representation which purports to be such a guarantee or warranty.

RESTRICTIVE TRADE RESTRICTIVE TRADE PRACTICEPRACTICE

A restrictive trade practice is a trade practice which:

• Prevents, distorts or restricts competition in any manner.

• Obstructs the flow of capital or resources into the stream of production.

• Tends to bring about manipulation of prices or conditions.

RELIEF AVAILABLERELIEF AVAILABLE• The practice shall be discontinued or shall not

be repeated.

• The agreement relating thereto, shall be void in respect of such restrictive trade practice or shall stand modified.

• The commission may permit the party to any restrictive trade practice to take steps so that it is no longer prejudicial to the public interest.

FERA ACT, 1973FERA ACT, 1973

To amend the law regulating certain payments,

dealing in foreign exchange, effecting foreign

exchange and import/export of currency, for the

conversation of the foreign exchange resource of

the country and the proper utilization thereof in

the interests of the economic development of the

country.

FEATURES OF FERA ACTFEATURES OF FERA ACT• Regulated in India by the Foreign Exchange

Regulation Act (FERA),1973.

• Consisted of 81 sections.

• FERA emphasized strict exchange control.

• Control everything that was specified, relating to foreign exchange

• Law violators were treated as criminal offenders.

• Aimed at minimizing dealings in foreign exchange and foreign securities.

WHY FERA ACT?WHY FERA ACT?a) FERA was introduced at a time when foreign

exchange (Forex) reserves of the country were low, Forex being a scarce commodity.

b) FERA therefore proceeded on the presumption that all foreign exchange earned by Indian residents rightfully belonged to the Government of India and had to be collected and surrendered to the Reserve bank of India (RBI).

c) FERA primarily prohibited all transactions, except one’s permitted by RBI.

OBJECTIVES OF FERA ACTOBJECTIVES OF FERA ACT• To regulate certain payments.

• To regulate dealings in foreign exchange and securities.

• To regulate transactions, indirectly affecting foreign exchange.

• To regulate the import and export of currency.

• To conserve precious foreign exchange.

• The proper utilization of foreign exchange so as to promote the economic development of the country.

INCENTIVES FOR EOUs, INCENTIVES FOR EOUs, 19811981

• The export oriented units (EOUs) scheme is complementary to the special economic zones (SEZs) scheme which was introduced in 1981.

• It adopts the same production regime but offers a wide option in location with reference to factors like source of raw materials, port of exports, hinterland facilities, availability of technical skills and the larger area of land for the project.

• 2037 (06) units were in operation under EOUs.

EXPORT PERFORMANCEEXPORT PERFORMANCE • There are 2168 units in operation under EOUs

as on 31st Dec 2006.

• Exports during 2005-06 from EOUs were of the order of Rs.47425.87 crore as compared to the export of Rs. 37488.38 crore during 2004-05 registering the growth of 26.51%.

• EOUs are mainly concentrated in textiles and yarns, food processing, electronics, chemicals, plastics, granites, and mineral/ores.

RECENT POLICY RECENT POLICY CHANGES IN THE EOUs CHANGES IN THE EOUs

• Started in 7th April, 2006.• Procurement and export of spares/components up

to 1.5% of the FOB value of exports will be allowed to the same consignee/buyer of the export article within the warranty period. The exports of spares/components could be effected separately from the capital goods.

• The EOUs units in textile sector are allowed to dispose off the left over material/fabrics up to 2% of cost insurance freight value of imports.

CONT,…..CONT,…..• New units engaged in export of

agriculture/horticulture/aquaculture products have been now allowed to remove capital goods inputs to the DTA farm on producing bank guarantee equivalent to the duty foregone on the capital goods/inputs proposed to be taken out.

Thank you,…….

Thank you,…….