Chances are, you have read this already. If you haven’t, I would urge you to read this sharp piece by Andy Mukherjee. It’s an alarming tale, cautioning us of the monopoly India is poised to be heading towards. If privatisation has done any good, it has mostly done it for the capitalists, more recently in ownership of airports. Mukherjee puts it succinctly:
Airports are natural monopolies. To have one private owner controlling eight or more — a fresh batch of six will soon go under the hammer — can’t possibly be great news for airlines, fliers, or businesses operating from the premises.
More worryingly, the concentration of economic power in aviation infrastructure is now symptomatic of a broader trend in India, particularly in businesses where the government supplies a key ingredient, such as telecom spectrum.
Further (packs a punch):
The worry is that dominance by a handful of capitalists may not leave enough space for others. But then, who’s even ready or willing to compete, especially in sectors where state policy has a big role in determining winners? Barring some notable exceptions, the Indian business class is overextended, trapped in the debris of assets created with the help of syndicated loans from pliant state-run banks. Politicians even have a name for it: phone banking, where they make the calls and tell bankers to whom to give loans.
Extremely important piece on Indian business today. Must read. Go here.