Corporate dominance widening rich-poor gap
INDIAN economy has witnessed a meteoric rise of corporate companies over the decades. Although the Industrial Policy Resolution of 1956 reserved the commanding heights — steel, heavy industries, machine building sector, metallurgy, defence, etc. — in the public sector through the licensing system, private companies were able to grow in consumer goods and banking businesses.
The RK Hazari Committee and S Dutt Committee were set up in the 1960s to review and examine the working of the licensing system and suggest measures to improve its working. These committees found that companies belonging to large business houses violated and exploited the system; these firms were able to get licences in areas such as defence, reserved for the public sector. Also, private companies owned by large business houses were able to get licences in sectors reserved for small and medium companies. It was found that on the pretext of foreign collaboration in 70 items in the category of non-essential items, licences were given to companies of business houses. In view of the above, the Government of India enacted the Monopolies and Restrictive Trade Practices Act in 1969. According to this Act, a monopoly company/business house owned assets of Rs 20 crore or above. Such a company or business house was not to be given licences for further expansion and setting up of new enterprises. This limit was raised to
Rs 100 crore or above in 1985. This limit of assets and definition of a monopoly house became redundant with the abolition of the licensing system.
In the wake of a foreign exchange crisis, a package of policy changes was introduced in 1991. This was called the new economic policy, marked by liberalisation, privatisation and globalisation. This was done to allow private corporate companies to expand their businesses and freely collaborate with foreign capital. This also reflected the growing clout of these companies in India.
According to the National Account Statistics, the share of corporate companies in the GDP has risen to 40 per cent. A report by the World Inequality Lab at the Paris School of Economics, authored by Thomas Piketty and others, brings out that top 1 per cent of India’s population possesses 40.1 per cent of the wealth. Consequently, the number of billionaires has risen from one in 1991 to 162 in 2022. The Forbes Global List of billionaires shows that the number of Indian billionaires has reached 200. On the other hand, 80 crore people out of 140 crore are dependent on the government for the supply of free ration.
With their increasing grip on the economy, corporates have spread their businesses in various sectors. They control industrial production, distribution of products, fruits and vegetables, telecommunications, roads, airports, ports, TV channels and newspapers, etc. The character of these houses is oligopolistic. A few companies (three or four) control a major proportion of the business in a specific line. They collude to fix supply prices of the output or purchase prices of inputs from small business or agriculture. These firms pay low wages/salaries to workers and employees. Using market power, they charge higher prices as suppliers and pay low prices when acquiring inputs to earn high profits. These firms are major beneficiaries of loan waivers and huge subsidies given by the government in the name of incentives. They have penetrated the government through lateral entry at the joint secretary level and are major contributors of election funds to political parties. Thus, the clout of the corporate sector extends from economy to administration and politics. A nexus has emerged between the ruling party at the Centre and corporate firms.
With the increase in the area of operation of big business, they have started setting the terms of discourse or the agenda for discussion in the country. One remembers how the mainstream media came out in support of the new economic policy in 1991 and later globalisation under the World Trade Organisation. It was one-sided uncritical support for the new economic regime, shifting from regulated capitalist development towards free and liberalised regime for corporates. As the hold of corporates on the media has increased, they have started their own educational institutions — from schools to universities.
While setting the terms of the discourse, the motive is to support ideas and political parties which protect corporate business and interests. This is why a discussion on poverty, inflation and unemployment is conspicuous by its absence from most media platforms. The corporate media has failed to defend constitutional and democratic values and is viewed as an opinion-builder in favour of the centralisation of politics. During the farmers’ agitation in 2020-21, a newspaper named Trolley Times was started as the corporate media was advising the protesters to toe the government’s line.
The erosion of state autonomy has weakened state governments financially and administratively. As a result, they are unable to meet obligations towards fulfilling aspirations of the people in diverse regions. This is the reason that when state governments face the wrath of the people, they try to divert the blame towards the Centre. Thus, weakening of state governments does not make country strong. In order to make the country strong, the states, regions and people must be made partners in development. Thanks to their growing proximity to corporate houses, the powers that be find themselves pitted against the people, while corporates are pocketing the benefits of high growth. This does not augur well for the objective of making the country join the league of developed nations by 2047.
