Finance minister P Chidambaram on Tuesday said the problem of cartelisation in certain industries, such as cement and tyre, needs to be arrested by urgently putting in place a competition law. If any law requires to be urgently amended, it is the competition law. Today, the most important task is to get the law amended and bring it into force. There is a huge vacuum in the absence of the law and, thus, one is not able to deal with anti-competitive practices, the minister said.

Speaking at the launch of a book on competition policy by Competition Commission of Indias sole member and chairman Vinod Dhall, the FM said: There are a number of emerging trends in the economy. Players need to be told that a law will govern these trends. There are many unseen cartels in the economy, especially in the tyre and cement industries. There are also other restrictive practices. He hoped that before Indian companies give into the temptation to cartelise and reap the gains, the competition law will be brought into force.

Emphasising the necessity for such a law in the current environment of consolidation, Mr Chidambaram said: Consolidation will take place and is desirable, but if it leads to restrictive practices then it is equally desirable that a competent authority looks at these restrictive practices.

The minister said the Indian market is imperfect and opportunities for anti-competitive practices are high. Markets are not perfect. They may fail. Competition law, in my view, contributes to preventing gross market failures due to restrictive practices and protects the interests of consumers, Mr Chidambaram said.

As long as everyone believed in the market and market principles, there was need for a competition law, the minister said, adding competition leads to growth but the growth must be equitable and just and competition law ensures that a market economy becomes a competitive economy.