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Market Concentration in the Indian Economy

Societies are increasingly worried about of inequality of late. Most of their disquiet stems from the growing inequality of incomes. Newspapers regale us with tales of the fortunes of Zuckerberg, Bezos and Adani, and million-dollar salaries are common for CEOs, especially of technology companies, while the rest of us scrape together a living. Sometimes the glare of attention focuses on economic or market concentration. Firms like Google, Facebook and Amazon stride their respective industries like giants obliterating all challenge while taking consumers for a ride. This perception, true or false, has led to competition authorities to conduct investigations of wrongdoing and to impose penalties if evidence can be found. Most of the concern with market concentration seems to be directed towards high technology businesses usually within the information technology sector. These are prone to monopolization and dominance according to commentators. However, there has been consolidation within other industries as well, in Europe and North America. The economic consequences of concentration could include increased prices for consumers and reduced prices for inputs. Besides concentration of economic power is usually frowned upon. The oldest competition law, the Sherman act, was specifically introduced to curb the power of trusts (a conglomeration of businesses) in the USA. Some countries in Europe and Asia resorted to nationalization of some industries to reduce concentration. The social and political effects of concentration are substantial and undesirable. On the flip side one can argue that concentration provides the necessary scale to compete in international markets.

Project Team
Subhashish Gupta and Gaurav Ghosh
Sponsor
IIM Bangalore
Select Project Type
Ongoing Projects
Project Status
Ongoing (Initiated in November 2022)
Funded Projects Functional Area
Economics & Social Science

Market Concentration in the Indian Economy

Project Team : Subhashish Gupta and Gaurav Ghosh
Sponsor : IIM Bangalore
Project Status: Ongoing (Initiated in November 2022)
Area : Economics & Social Science
Abstract :

Societies are increasingly worried about of inequality of late. Most of their disquiet stems from the growing inequality of incomes. Newspapers regale us with tales of the fortunes of Zuckerberg, Bezos and Adani, and million-dollar salaries are common for CEOs, especially of technology companies, while the rest of us scrape together a living. Sometimes the glare of attention focuses on economic or market concentration. Firms like Google, Facebook and Amazon stride their respective industries like giants obliterating all challenge while taking consumers for a ride. This perception, true or false, has led to competition authorities to conduct investigations of wrongdoing and to impose penalties if evidence can be found. Most of the concern with market concentration seems to be directed towards high technology businesses usually within the information technology sector. These are prone to monopolization and dominance according to commentators. However, there has been consolidation within other industries as well, in Europe and North America. The economic consequences of concentration could include increased prices for consumers and reduced prices for inputs. Besides concentration of economic power is usually frowned upon. The oldest competition law, the Sherman act, was specifically introduced to curb the power of trusts (a conglomeration of businesses) in the USA. Some countries in Europe and Asia resorted to nationalization of some industries to reduce concentration. The social and political effects of concentration are substantial and undesirable. On the flip side one can argue that concentration provides the necessary scale to compete in international markets.