These days, various economists and economic experts are trying to present their views on whether the private sector in the Indian economy has entered a state of monopoly. Before the 90s, India’s economy was in the era of licensing. However, during that time, when the foreign exchange crisis deepened, only the private sector actually implemented economic reforms, and later it was also aided by globalization. Within 75 years of independence, two factors have greatly influenced Indians. On one hand, undoubtedly, everyone feels proud that today India is a $4 trillion economy, making it the fifth-largest economic superpower in the world. On the other hand, India has become the world’s most populous country. But this aspect is a cause for concern because the gap between the poor and the rich has been continuously increasing in India for a long time. It is also being said that India’s contribution to the world’s poverty is greater than its contribution to the world’s population, and this is directly linked to the ever-increasing profitability of the private sector.

In the midst of all this, a well-known economist who has held a big position in India’s central bank recently presented the apprehension through his research that five big private houses of India have reached the position of monopoly in the areas related to infrastructure development, including steel, aluminum, cement, telecom, infrastructure, crude oil, etc. Their monopoly will also be established on the prices of commodities as well. As a result, the common man may soon be away from the mainstream of economic development. In 1991, these private houses contributed 10 percent in the industries related to the infrastructure sector, which increased to 18 percent by 2021. It is surprising that during this period, the contribution of industrial houses after these 5 houses has fallen very fast. These five houses have flourished by building upon the accomplishments of others. Apart from this, the percentage of business mergers and acquisitions in these industrial houses, has also increased significantly. Therefore, it is discussed that something similar to the economic policies of division of public sector enterprises should also be done in the private sector so that the ideology of inclusive economic growth in the economy is always maintained.

Now the other side of the picture is that, the contribution of 5 big private industrial houses in the areas related to infrastructure development has steadily declined in total assets and profits from 1990 to 2015. For example, in 1990, where the contribution of five large private industrial houses to the total sales was 62.40 percent, it declined to 42.80 percent in 2015. Similarly, the contribution of other industrial houses other than the first five industrial houses was also reduced. In 1990, it was 10.4 percent but in 2015 it was 5.4 percent. But it is worth noting that the profits of other industrial houses or companies in total sales doubled from 1990 to 2015. In 1990, their contribution was 27.20 percent, which went up to 51.70 percent in 2015. In the midst of all this, it is also very important to present the fact that after 2015, till the present situation, the contribution of the first 5 big industrial houses has definitely increased, but not of any other industrial houses. Now, it does not seem appropriate to establish a one-sided view that five industrial houses have created a monopoly-like situation in the Indian economy in the recent past. The fact related to this is that the last 5 years have also been a period of economic upheaval because during that time a new tax policy came in India which affected the entire business world and later there was also the economic crisis of Corona.

Another important fact is that the arrival of new business houses and companies in the field of infrastructure business has been steadily increasing. In 1990, there were only 439 business houses under the infrastructure sector, which has reached 1242 in 2020. In 2015, the number was 1,235. This fact itself confirms that if the Indian economy was monopolized by five big industrial houses, would the number of other business houses or companies be constantly increasing? Now if we talk about mergers and acquisitions, then it is very important to understand on this side that not all types of acquisitions take place in the economy with negative energy. Significantly, we saw during Corona that many small startup companies were acquired by a big company in the field of online education and that acquisition became an economic lifeline for small startups. On the other hand, that big company also got a new reach in the society. On this side, why do we forget that the Competition Commission of India is also there and it is playing its role meaningfully. The laws of mergers and acquisitions are also constantly being changed. Under the current financial budget, the deal value was also included in it. Earlier, only valuation of assets and valuation of turnover were considered as the basis.

The telecom sector has emerged as a main pivot in the infrastructure in the Indian economy for some time now, which has given a new direction to the development of technology. In this regard, it is also very common to discuss that the arrival of new business houses in this sector is completely closed because big industrial houses have established their monopoly. These fears are also negative. The telecom sector requires huge financial capital and investment. Even globally, the telecom sector in all major countries is run by a few industrial houses only. Significantly, whenever there is talk of creating a monopoly on the internet sector on a big industrial house, it is said that it distributed the internet for free for a long time. In this regard, it is also important that if an institution attracts customers by controlling or reducing its costs, then it is not appropriate to misunderstand it. It is also necessary to clarify that almost all the companies under the telecom sector in India were provided financial assistance by the Government of India in the year 2021 because not all companies were in a profitable position. There has been a dispute between Indian Telecom Companies and the Telecom Department about the actual definition of profits for a long time. The reason for this is the share of profits from the properties.

Today, India holds a significant position on the global economic map, and there is a strong possibility that it will become the world’s third-largest economy within the next 10 years. Given this context, the notion that certain companies might collude to monopolize prices appears entirely baseless. It is important to note that the costs of products related to infrastructure development or trade are still globally controlled. Steel, aluminum, crude oil, and other commodities serve as clear examples of this phenomenon. Therefore, the idea that the private sector in India has established a monopoly on the economy is ridiculous.One thing is evident: for the past two to three decades, the private sector has held complete control over the reins of the economy. In contrast, during the first 50 years after independence, the government sector employed over 80 percent of the population. However, this scenario has now reversed, with the majority of employment opportunities shifting to the private sector. It is essential to recognize that granting economic profitability to the private sector is justified, as it facilitates the expansion of the economy.

Dr. P.S. Vohra , Academician, Financial Thinker & Newspaper Columnist , Views are personal