Indian Economics Thread II

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proelite

proelite

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gelgoog said:
Bollocks. The big conglomerates worked just fine getting Japan and South Korea into high income economy status.
Without conglomerates, it is hard to concentrate enough capital in a developing economy.
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Michael90 said:
Wrong. It's their big conglomerates that actually make them stand a chance of competing with East Asian and Western companies, else India will have little to no chance to even appear on the table. So I actually think their big private companies are doing a good job.
Tata for example is the one now investing in a new battery cell plant in India. Other small Indian companies don't have the capital, scale or skills to undertake any big projects necessary for the country. So yes developing countries need big national champions, China included. Else you won't be able to compete globally.
Reason even in China's auto industry there should be consolidation and only the most competitive innovative big companies should survive and thrive. Having several dozens of companies doing the same thing in a particular industry is a waste of resources.
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Difference is that the Chinese and SK conglomerates have businesses that mostly have synergy with each other.

The Indian ones dominates large cross sections of the economy across non-related industries. They gain revenue and lobbying power without no added efficiencies.

Take the comparison between Tata and Huawei for example.

Tata:
Automotive Chemicals
Defence
Electronics
Jewellers
Home appliances
Salt
Steel
Cement
Tea

Huawei:
Consumer electronics
Telecom equipment
Networking equipment
Semiconductors
Artificial intelligence
Automation
Cloud computing
Internet of things

It's more dangerous for a company to control 10% of a nation's economy without a monopoly in any market for a company with a 90% monopoly in a single market.

The big five conglomerates exist to simply control the entire economy and gain outsized influence in politics.

This is why the Neo-Brandeis movement and hipster anti-trust is fundamentally flawed. Brandeis wasn't afraid of Microsoft / Google, he was afraid of groups like Tata, Reliance, Adani etc.
 
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gelgoog

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Even in Taiwan you see big conglomerates as largely responsible for their current economic status. One example is the Formosa Plastics group. They started with petrochemicals, and then moved into semiconductors and board manufacture.

As for having non-related industries in the group, that is hardly something new. The Samsung group in South Korea is a good example of a successful conglomerate which used to have many disparate businesses including healthcare, insurance, and retail. Samsung started as a trading company, and then moved into manufacturing with textile mills. This is similar to the Adani group in India.

Having such concentration enables the creation of huge amounts of capital which can then be reinvested in other business lines. In a developing nation this is pretty much essential. The only other way of being able to concentrate enough capital in such an economy, is to do massive Soviet style state investment. Without capital concentration, local businesses in a developing economy will never properly develop and will be easy prey to foreign firms.
 
proelite

proelite

Junior Member
gelgoog said:
Even in Taiwan you see big conglomerates as largely responsible for their current economic status. One example is the Formosa Plastics group. They started with petrochemicals, and then moved into semiconductors and board manufacture.

As for having non-related industries in the group, that is hardly something new. The Samsung group in South Korea is a good example of a successful conglomerate which used to have many disparate businesses including healthcare, insurance, and retail. Samsung started as a trading company, and then moved into manufacturing. This is similar to the Adani group in India.

Having such concentration enables the creation of huge amounts of capital which can then be reinvested in other business lines. In a developing nation this is pretty much essential. The only other way of being able to concentrate enough capital in such an economy, is to do massive Soviet style state investment. Without capital concentration, local businesses in a developing economy will never properly develop and will be easy prey to foreign firms.
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Well in SK's and Taiwan situation they weren't democracies at the time were the conglomerates can lobby as effectively for tariffs and a protected market in perpetuity.

Also was SK and Taiwan's economy dominated by a few conglomerates? Having one or two is not as bad.

Formasa's products based on what I am seeing are related to each other, so there is synergy between the individual business groups.

Even Samsung is less diverse in terms of industries than the Indian conglomerates.
 
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gelgoog

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In the case of Samsung the conglomerate started being broken up as the founders started dividing their capital among their heirs. So it is naturally breaking up as time passes. The Reliance group in India was also broken up in two among the two inheritors.

You could argue that the major mistake India is making is letting the conglomerates control natural monopolies like energy generation or telecoms. That is where massive amounts of graft and market distortion can happen. In South Korea, there are telecoms companies owned by conglomerates (LG, SK), but there is also a large government telecom operator to keep them in check. And in South Korea electricity is largely the purvey of KEPCO which is also state owned. IMHO there is no good reason why Reliance operates power plants.
 
coolgod

coolgod

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Odisha Train Accident LIVE Updates: Coromandel Express train derailed, collided with another train, killing 277.​

Odisha Train Accident LIVE Updates: Odisha Chief Secy Pradeep Jena said that the death toll is 275 and not 288 and out of the 1,175 injured 793 have been discharged after treatment. At least 277 people died and over 800 were injured in a three-train collision in Balasore, Odisha on Friday evening, setting off a massive rescue and evacuation process.
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Mamata questions official death toll​

Odisha Train Accident LIVE Updates: West Bengal Chief Minister Mamata Banerjee on Sunday questioned the death figures given by the Ministry of Railways in the triple train crash in Odisha's Balasore, stating that 61 people from her state were dead and 182 were still missing.

Mamata Banerjee asked questions on whether Vande Bharat engines were up to the mark. "If from one state, 182 are missing and 61 are confirmed dead, then where would the figures stand?" she asked, addressing a press conference at the state secretariat, Nabanna.
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Death toll is 275 and not 288, says Odisha Chief Secy Pradeep Jena​

Odisha Chief Secy Pradeep Jena said that the death toll is 275 and not 288.

"The data was checked by DM and it was found that some bodies have been counted twice, so the death toll has been revised to 275. Out of 275, 88 bodies have been identified, he added. Out of 1,175 injured, 793 have been discharged after treatment. The figure will be updated around 2pm
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Based on these news stories and
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shared on the internet. How many people do you think died in the tragic train accident in Odisha?
A) 288
B) 275
C) 277
D) 1000+
 
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coolgod

coolgod

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proelite said:
Tragic.

Not sure why this belongs in the economic thread tho.
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Where would you put this piece of news? We can't stuff everything in breaking & world news thread, besides accidents of this magnitude have large economic repercussions.
 
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