{"id":27501,"date":"2023-07-18T19:45:28","date_gmt":"2023-07-18T14:15:28","guid":{"rendered":"https:\/\/pwonlyias.com\/stage\/?post_type=editorial-analysis&#038;p=27501"},"modified":"2023-07-18T19:45:28","modified_gmt":"2023-07-18T14:15:28","slug":"indias-conglomerates-are-getting-too-big-for-comfort","status":"publish","type":"editorial-analysis","link":"https:\/\/pwonlyias.com\/stage\/editorial-analysis\/indias-conglomerates-are-getting-too-big-for-comfort","title":{"rendered":"India\u2019s Conglomerates Are Getting Too Big For Comfort"},"content":{"rendered":"<p><b>Context:<\/b><\/p>\n<p><span style=\"font-weight: 400;\">This article is expressing concerns with the <\/span><b>financial divide among the business groups<\/b><span style=\"font-weight: 400;\">.\u00a0<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">India\u2019s big businesses seem to be thriving, but small- and medium-scale firms, and informal enterprises are not doing well and are yet to recover their COVID-19-inflicted losses.<\/span><\/li>\n<\/ul>\n<p><b>Need for Big Businesses and Industries:<\/b><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Development<\/b><span style=\"font-weight: 400;\">: By the investment, they made to the development of businesses helps in the development of the nation like<\/span><b> job creation, unemployment and poverty reduction, etc.<\/b>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">India has 112 million working-age people between the ages of 20 and 24. In the absence of government jobs, this demographic dividend is accelerating towards the private sector.\u00a0\u00a0<\/span><\/li>\n<\/ul>\n<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Profit to the Government<\/b><span style=\"font-weight: 400;\">: The big businesses and industries pay high amounts of taxes to the government, hence helping in the growth of the nation.\u00a0<\/span>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">According to an estimate, a 2% tax on the top 100 billionaires would give the government enough money to<\/span><b> raise health expenditure to 3% of the GDP.<\/b><\/li>\n<\/ul>\n<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>The Face of the Nation<\/b><span style=\"font-weight: 400;\">: Big industrialists represent the face of their nation likeBill Gates, Elon Musk, Mukesh Ambani etc.<\/span>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">As per<\/span><b> Oxfam India\u2019s report,<\/b><span style=\"font-weight: 400;\"> the total number of billionaires in India increased from 102 in 2020 to 166 billionaires in 2022, which is an indication of the growing economy in India.<\/span><\/li>\n<\/ul>\n<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Investment &#038; Technology Upgradation<\/b><span style=\"font-weight: 400;\">: Big industries attract a huge amount of foreign investments which help in bringing new technologies too. Hence, increasing the capital and development of the domestic economy.\u00a0<\/span>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">As per<\/span><b> World Investment Report, 2022,<\/b><span style=\"font-weight: 400;\"> most of the investments in India were made in the information and communication technology (ICT) and the construction industry.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Investors concluded deals worth over $650 million in the first quarter of 2020, mostly in the <\/span><b>digital sector.<\/b><\/li>\n<\/ul>\n<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Reduction in Imports<\/b><span style=\"font-weight: 400;\">: With the advancement of new technologies in the industries, these are helping in reducing imports and reducing the capital deficit of the nation.\u00a0<\/span>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Example, the <\/span><b>TATA group, Reliance and Adani<\/b><span style=\"font-weight: 400;\"> have established their <\/span><b>defense <\/b><span style=\"font-weight: 400;\">manufacturing companies which are helping in reducing defense imports and indigenization of defense products.<\/span><\/li>\n<\/ul>\n<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Philanthropy:<\/b><span style=\"font-weight: 400;\"> India industrialists and businesspersons are well known for their philanthropy.\u00a0<\/span>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">As per the <\/span><b>EdelGive Hurun India Philanthropy List for 2022<\/b><span style=\"font-weight: 400;\">, Industrialist and founder of HCL Technologies Shiv Nadar has reclaimed &#8216;India&#8217;s most generous&#8217; title with an annual donation of Rs 1,161 crore. Many more Indians hit their name in the list like <\/span><b>Azim Premji, Mukesh Ambani, Kumar Mangalam Birla, Susmita and Subroto Bagch etc.<\/b><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p><b>Concerns with the Industrial Conglomerates:<\/b><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Profiteering:<\/b><span style=\"font-weight: 400;\"> By using market power, big industrialists compress the competition. It results in profit inflation or profiteering, through the manipulation of costs and prices.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Inequality:<\/b><span style=\"font-weight: 400;\"> Industrial Conglomerates results in extreme asset and income inequality.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Dilution by Impacting: <\/b><span style=\"font-weight: 400;\">Industrial Conglomerates triggers efforts to influence institutions of democracy and dilutes the role of the civil society as a countervailing power.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Crony capitalism: <\/b><span style=\"font-weight: 400;\">Industrial Conglomerates sometimes leads to undue corporate influence over political processes and the formulation of policy.<\/span>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">A political-economic system in which success in business depends on close relationships between business people and government officials, rather than on merit and competition.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><b>Examples: <\/b><span style=\"font-weight: 400;\">The 2G spectrum scam, Coalgate Scandal etc.\u00a0<\/span><\/li>\n<\/ul>\n<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Distrust Scenario<\/b><span style=\"font-weight: 400;\">: This inequality amongst the economy sector creates distrust in the economy leading to decreased capital inflows and thus investments.\u00a0\u00a0<\/span>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><b>Example:<\/b><span style=\"font-weight: 400;\"> A recent revelation of such facts about Adani Group by the Hindenburg Report.<\/span><\/li>\n<\/ul>\n<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Few Ethical Concerns:<\/b>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><b>Inequality<\/b><span style=\"font-weight: 400;\">: The huge wealth of big industrialists is often seen as morally wrong when many people in the world live in extreme poverty.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><b>Exploitation of Workers<\/b><span style=\"font-weight: 400;\">: Low wages and poor working conditions provided to the workers by various big industrialists is a big rising concern.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><b>Tax Avoidance<\/b><span style=\"font-weight: 400;\">: Many billionaires take advantage of loopholes to avoid paying taxes on their income.<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p><b>Conclusion<\/b><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Liberalization opened up Indian markets, and subjected much of Indian business to global competition, state intervention was modified to protect and promote sections of big business.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">After more than 30 years of liberalization of 1991, it&#8217;s not the time, only to regulate markets to address the malicious outcomes, but there is a strict need to<\/span><b> physically prevent the growth of dominant businesses and excessively large conglomerates.<\/b><\/li>\n<\/ul>\n<p><b><i>News Source: <\/i><\/b><a href=\"https:\/\/www.thehindu.com\/opinion\/lead\/indias-conglomerates-are-getting-too-big-for-comfort\/article67087609.ece#:~:text=A%20former%20Reserve%20Bank%20of,%25%20to%20less%20than%209%25.\" target=\"_blank\" rel=\"noopener\"><b><i>The Hindu<\/i><\/b><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Context: This article is expressing concerns with the financial divide among the business groups.\u00a0 India\u2019s big businesses seem to be thriving, but small- and medium-scale firms, and informal enterprises are not doing well and are yet to recover their COVID-19-inflicted losses. Need for Big Businesses and Industries: Development: By the investment, they made to the&hellip; <a class=\"more-link\" href=\"https:\/\/pwonlyias.com\/stage\/editorial-analysis\/indias-conglomerates-are-getting-too-big-for-comfort\">Continue reading <span class=\"screen-reader-text\">India\u2019s Conglomerates Are Getting Too Big For Comfort<\/span><\/a><\/p>\n","protected":false},"author":11,"featured_media":0,"menu_order":0,"comment_status":"open","ping_status":"open","template":"","format":"standard","meta":{"rank_math_lock_modified_date":false,"footnotes":""},"tags":[],"paper-wise":[2089],"subject":[2100],"acf":[],"_links":{"self":[{"href":"https:\/\/pwonlyias.com\/stage\/wp-json\/wp\/v2\/editorial-analysis\/27501"}],"collection":[{"href":"https:\/\/pwonlyias.com\/stage\/wp-json\/wp\/v2\/editorial-analysis"}],"about":[{"href":"https:\/\/pwonlyias.com\/stage\/wp-json\/wp\/v2\/types\/editorial-analysis"}],"author":[{"embeddable":true,"href":"https:\/\/pwonlyias.com\/stage\/wp-json\/wp\/v2\/users\/11"}],"replies":[{"embeddable":true,"href":"https:\/\/pwonlyias.com\/stage\/wp-json\/wp\/v2\/comments?post=27501"}],"version-history":[{"count":0,"href":"https:\/\/pwonlyias.com\/stage\/wp-json\/wp\/v2\/editorial-analysis\/27501\/revisions"}],"wp:attachment":[{"href":"https:\/\/pwonlyias.com\/stage\/wp-json\/wp\/v2\/media?parent=27501"}],"wp:term":[{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/pwonlyias.com\/stage\/wp-json\/wp\/v2\/tags?post=27501"},{"taxonomy":"paper-wise","embeddable":true,"href":"https:\/\/pwonlyias.com\/stage\/wp-json\/wp\/v2\/paper-wise?post=27501"},{"taxonomy":"subject","embeddable":true,"href":"https:\/\/pwonlyias.com\/stage\/wp-json\/wp\/v2\/subject?post=27501"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}