Page 207 - DMGT401Business Environment

Business Environment

Notes
today, with 55 top stocks in the ‘A’ group falling by 8 per cent before they hit the lower
‘circuit filter’ which stopped all trading in them.
In continuing with the trend of the past few days, technology firms like Infosys and
Satyam were the worst hit – tech stocks have been falling on the US Nasdaq as well with
investors of the view that these stocks have been hyped too much. Technology shares like
Infosys, Satyam and Wipro, pharma shares like Ranbaxy, L&T, MTNL, Reliance, HFCL,
VSNL and SBI plunged on sustained unloading of shares by panicky investors.
Today’s bloodbath, initially triggered off by the collapse of the American Nasdaq after the
US court ruled that Microsoft had indeed violated antitrust legislation, was worsened by
rumours spread by interested stock market operators in the Indian markets.
One of the country’s pink financial dailies carried a report this morning (April 4) that the
income tax authorities were demanding taxes from Foreign Institutional Investors (FIIs)
which had routed their investment through the Mauritius tax-haven, to claim tax
advantages. While the report was denied by the Finance Ministry in New Delhi early
enough in the morning – the income tax claims were a mere 9 crores from just 7 of the
total of over 600 FIs who operate in India – operators used this to wreak havoc.
Rumours were spread that this was just the beginning of a massive income tax swoop on
FIIs.
Question
State the case for and against Microsoft as a company.

Source: The Economic Times, April 4, 2000

8.4 Summary

The legal environment in India is such that the Indian judiciary is known for its
independence and extensive powers. The High Court or the Supreme Court in exercise of
their constitutionally conferred writ jurisdiction is empowered strike down legislation
on the ground of unconstitutionality.
The Directive Principles of our constitution suggest that ownership and control of material
resources should be widely distributed and there should be no concentration of wealth
and means of production.

Before the 1991 amendment, the MRTP law sought to control the concentration of economic
power by requiring undertakings that had assets over 100 crores and/or were 'dominant
undertakings' to register themselves with the Monopolies and Restrictive Trade Practices
Commission.
The Commission can enquire into any restrictive, unfair or monopolistic trade practice (a)
upon receiving a complaint from any consumer or a consumers' association, (b) on reference
made by Central or state government, (c) on an application made by DGIR, (d) on its own.
The MRTP Act was implemented in keeping with India's adopted political ideology of
socialism. Its basic objective was to restrict the concentration of economic power by
restricting and controlling the big companies, but in reality it only restricted and controlled
the growth of Indian economy.
In India, Intellectual Property Rights (IPR) fall under item 49 of list - the union list of the
7th Schedule to the Constitution.

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