108– Indian Economy

Unit 4. Inequality and

Economic Power in India:
4. Inequality and Economic Power in India: FDI, Angel Investors and
Start-ups, Unicorns, M&A, Investment Models, Role of State, PPP
(Public-Private Partnership), Savings and Investment Trends.
Growth of Large Industrial Houses Since Independence, Growth of
Monopolies and Concentration of Economic Power in India,
Competition Policy and Competition Law, Growth and Inequality,
India as an Economic Superpower, Growth of the Indian Middle
Class, Indian MNCs : Mergers and Acquisitions, Outsourcing,
Nationalism and Globalization, Small-scale and Cottage Enterprises,
The Role of Small-scale Industries in Indian Economy, Poverty,
Vulnerability and Unorganized Sector Employment-The High Degree
of Correlation, Estimate of Organized and Unorganized Workers. (6)
Inequality and Economic Power in India:
• Oxfam International released its annual inequality
report, 2019 report titled “Public good or Private
Wealth?” highlighted the stark Income inequality existing
in India.
• The United Nations describes inequality as “the state of
not being equal, especially in status, rights and
opportunities”.
• Inequality can be broadly classified in to:
– Economic inequality: Economic inequality is the unequal
distribution of income and opportunity between individuals or
different groups in society.
– Social inequality: It occurs when resources in a given society are
distributed unevenly based on norms of a society that creates
specific patterns along lines of socially defined categories e.g.
religion, kinship, prestige, race, caste, ethnicity, gender etc. have
different access to resources of power, prestige and wealth
depending on the norms of a society.
• Both these categories are deeply intertwined and inequality of one type
affects the inequality in another e.g. Social Inequality due to gender
have large impact on income of women. In patriarchal societies large
gender wage gap tends to exist.
Concerns Associated with Inequalities
• Normalization of Inequalities: Many major economists worldwide try to
justify growing inequalities as an inevitable by-product of economic growth
that led to the reduction of absolute poverty.
– Moreover, concerns about inequality could also be easily dismissed as
being informed by socialism, which is portrayed as a threat to
democracy.
– Due to this, the distribution of new wealth between capital and labor has
become so one-sided that workers are constantly being pushed to
penury while the rich are getting richer.
– Further, the worsening inequality in income and opportunities impacts
some sections disproportionately due to discrimination based on gender,
caste, and other factors.
• Creation of Monopolies: Despite its alleged commitment to market competition,
the neoliberal economic agenda instead brought the decline of competition and
the rise of close to monopoly power in vast swaths of the economy:
pharmaceuticals, telecom, airlines, agriculture, banking, industrials, retail.
• Unsustainable Economic Growth: One of the chief characteristics of economic
development is the intensification of energy use. There is an unprecedented
concentration of high energy density in all economic development strategies.
– The bulk of the energy continues to be generated from non-renewable
sources.
– The developed world’s primary objective is to capture energy-generating
resources from across continents and put them to use to push their GDP
growth to greater heights.
– This unsustainable economic growth model is against the concept of
sustainability, as it sacrifices the need of future generations for the welfare of
present generations.
Way Forward
• Nordic Economic Model: To make the current redistribution of
wealth more equitable, the current neo-liberal model can be replaced
by the ‘Nordic Economic Model.’
– Nordic Economic Model consists of effective welfare safety nets
for all, corruption-free governance, the fundamental right to
quality education & healthcare, high taxes for the rich, etc.
• 4P Model of Capitalism: Rather than just rhetoric, the new
capitalism model should focus on 4P’s viz. ‘Profit, People, Planet,
Purpose and it should be the government’s task to ensure that the
corporates adhere to this model.
• ‘FDI’ or ‘Foreign Direct Investment’ means investment
through capital instruments by a person resident outside
India – in an unlisted Indian company OR in ten per cent or
more of the post-issue paid-up equity capital on a fully
diluted basis of a listed Indian company.
• Note: ‘Person’ includes(i) an individual, (ii) a Hindu undivided
family, (iii) a company, (iv) a firm, (v) an association of
persons or a body of individuals whether incorporated or not,
(vi) every artificial juridical person, not falling within any of
the preceding subclauses, and (vii) any agency, office, or
branch owned or controlled by such person.
• In India, foreign investment can be made mainly under two
routes:
• Automatic Route: Under the Automatic Route, the non-
resident investor or the Indian company does not require
any approval from Government of India for the investment.
Reserve Bank of India is in charge of Automatic Route.
• Government Approval Route: Under the Government
Approval Route, prior to investment, approval from the
Government of India is required. Proposals for foreign
direct investment under Government route, are considered
by respective Administrative Ministry/ Department.
• Note: Earlier the Foreign Investment Promotion Board
(FIPB) and Secretariat for Industrial Assistance (SIA)
was in charge of recommending Foreign Direct
Investment (FDI) which does not come under the
automatic route. However, FIPB was abolished in 2017,
and its power was given to the respective Administrative
Ministries/ Departments.

• Note: Acquisition of shares and amount remitted through

RBI’s NRI Schemes are also considered as FDI.
Examples of FDI in India
• In 2020, BYJU’s (an Indian education technology firm)
raised US$ 500 million in a new round of funding led by
Silver Lake, a US-based private equity company.
• In 2020, Unacademy, an Edtech platform, raised US$ 150
million from SoftBank Group (a Japanese conglomerate).
• FDI inflows in India increased to $55.56 bn in 2015-16,
$60.22 billion in 2016-17, $60.97 bn in 2017-18, and
$62.00 bn (provisional figure) in 2018-19. India has
attracted around $74 bn investments across sectors
during 2019-20.
Angel Investors and Start-ups,
• An angel investor provides a large cash infusion of their own money to an
early stage startup. In return, the angel investor receives equity or
convertible debt. Many angel investors are accredited, though not all are. 
• Pros and cons of angel investors
• Angel investors assume greater risk compared to banks or venture
capitalists. Angel investors aren't beholden to banks or institutions, so
they can invest their money as they – and only they – see fit. That means
the investment risks that traditional funders avoid may not be of concern
for angel investors.
• As an entrepreneur, you take on less risk compared to other funding
options. In many cases, angel investors don't require repayment if your
startup fails, making them a less-risky option for growing your company.
• Angel investors have ample business knowledge.
Many people wealthy enough to qualify as angel
investors earned their money through entrepreneurship.
While launching a startup, you may benefit from their
business knowledge.
• They require large stakes in your startup. The major
disadvantage of angel investors is that their investment
often gives them a large stake in your startup, which
means you have less control over managing the business
• UNICORNS
In the venture capital industry, the term unicorn refers to any
startup that reaches the valuation of $1 billion. 
The term was first coined by Aileen Lee, founder of
Cowboy ventures when she referred to the 39 startups
that had a valuation of over $1 billion as unicorns. The
term initially was used to lay emphasis on the rarity of
such startups. The definition of a unicorn startup has
remained unchanged since then. However, the number of
unicorns have gone up.
Features of a unicorn startup
• Disruptive innovation: Mostly, all the unicorns have brought
a disruption in the field they belong to. Uber, for example,
changed the way people commuted. Airbnb changed the way
people planned their stay while travelling and Snapchat
disrupted the usage of the social media network etc.
• The ‘firsts’: It is seen that unicorns are mostly the starters in
their industry. They change the way people do things and
gradually create a necessity for themselves. They are also
seen to keep innovation up and running to stay ahead of
competitors which might later boom.
• High on tech: Another common trend across unicorns is that
their business model runs on tech. Uber got their model
accepted by crafting a friendly app. Airbnb made the world
seem smaller by making the best of the world wide web.  A
recent report suggests that 87% of the unicorns products are
software, 7% are hardware and the rest 6% are other products
& services.
• Consumer-focused: 62% of the unicorns are B2C companies.
Their goal is to simplify and make things easy for consumers
and be a part of their day to day life. Keeping things affordable
is another key highlight of these startups. Spotify, for example,
made listening to music easier to the world. 
• Privately owned: Most of the unicorns are privately
owned which gets their valuation bigger when an
established company invests in it. 
• According to CB Insights, there are 361 private
companies around the world valued at over $1 billion.
India has 16 of these companies, taking 4 percent of the
overall share. Also, India is just a shade below the UK,
which has 19 unicorns with 5 percent overall share.
The reason for slow process of mergers and acquisitions were
due to the provisions of MRTP act, 1969 where the firm had to
follow a strict procedure to get approval for the same which
acted as a deterrent. The notion of merger and acquisition in
India was not prevalent until the year 1988. After the financial
transformations that occurred in the 1991, there was tough
competition which pushed the Indian companies to go for
Mergers and acquisitions. Afterwards it became a vital option
for them to enlarge horizontally and vertically. Indian
industries were exposed to numerous challenges both
nationally and internationally, since the introduction of Indian
economic reform in 1991
The factors responsible for making the merger and
acquisition deals constructive in India are:
1. Dynamic government policies
2. Corporate investments in industry
3. Economic stability
4. "Ready to experiment" attitude of Indian industrialists
Major Mergers and Acquisitions deals in India:
• Tata Steel acquired 100% stake in Corus Group on January 30,
2007. It was an all-cash deal which cumulatively amounted to $12.2
billion.
• Vodafone purchased administering interest of 67% owned by Hutch-
Essar for a total worth of $11.1 billion on February 11, 2007.
• India Aluminium and copper giant Hindalco Industries purchased
Canada-based firm Novelis Inc in February 2007. The total worth of
the deal was $6-billion.
• Indian pharma industry registered its first biggest in 2008 M&A deal
through the acquisition of Japanese pharmaceutical company Daiichi
Sankyo by Indian major Ranbaxy for $4.5 billion.
• The Oil and Natural Gas Corp purchased Imperial Energy Plc in
January 2009. The deal amounted to $2.8 billion and was considered
as one of the biggest takeovers after 96.8% of London based
companies' shareholders acknowledged the buyout proposal.
• In November 2008 NTT DoCoMo, the Japan based telecom firm
acquired 26% stake in Tata Teleservices for USD 2.7 billion.
• India's financial industry saw the merging of two prominent banks -
HDFC Bank and Centurion Bank of Punjab. The deal took place in
February 2008 for $2.4 billion.
• Tata Motors acquired Jaguar and Land Rover brands from Ford
Motor in March 2008. The deal amounted to $2.3 billion.
• 2009 saw the acquisition Asarco LLC by Sterlite Industries Ltd for
$1.8 billion making it ninth biggest-ever M&A agreement involving an
Indian company.
• In May 2007, Suzlon Energy obtained the Germany-based wind
turbine producer Repower. The 10th largest in India, the M&A deal
amounted to $1.7 billion.
• In 2012, there was a decrement trend in mergers and acquisitions in
India. This was majorly caused by the tough macro-economic climate
created due to euro zone crisis and other domestic reasons such as
inflation, financial deficit, and currency.
Finance express report revealed that total number of merger and
acquisition deals of Indian companies in 2014 rose to 1,177 valuing
at about USD 50 billion. It is the highest ever in a decade.
• Flipkart- Myntra: This is most important acquisition of the year. The
Bangalore based domestic e-retailer acquired the online fashion portal
for an undisclosed amount in May 2014. Industry analysts and insiders
believe it was a $300 million or Rs 2,000 crore deal.
• Asian Paints- Ess Ess Bathroom Products: Asian paints signed a deal
with Ess Ess Bathroom products Pvt Ltd to acquire its front end sales
business for an undisclosed sum in May, 2014. "The company on May
14, 2014 has entered into a binding agreement with Ess Ess Bathroom
Products Pvt. Ltd and its promoters to acquire its entire front-end sales
business including brands, network and sales infrastructure".
• RIL- Network 18 Media and Investments: Reliance Industries Limited
took over 78% shares in Network 18 in May 2104 for Rs 4,000 crores.
• Challenges to mergers and acquisitions in India:
• Regulatory Ambiguity: Mergers and acquisitions laws and
regulations are still in developing stage and trying to draw near
global M&A scenario.
• Legal Developments: There have been steadily new legal
developments such as the Competition Act, 2002, the restored
SEBI Takeover Regulations in 2011 and also the notification of
limited sections of the new Companies Act, 2013, has led to
issues in India relating to their interpretations and effect on the
deals valuations and process.
• Shareholder Involvement: Institutional investors in the minority
position have become active in observing the investee companies.
Investment Models,
Money for investing in productive assets can be from Public Sources
(Government), Private Sources (Corporate) or Combined Sources
(Public Private Partnership or PPP).
• Thus one the basis of who invests in assets for increasing
production, there are three major investment models.
• Public Investment Model: For a government to invest, it needs
revenue (mainly tax revenue), but the present tax revenues of India
are not sufficient enough to meet the budgetary expenditure of India.
So India cannot move ahead in the path of growth without private
individuals; even for government to have a share in the investment,
they need tax revenue from the private investors.
Private Investment Model: The private investment can come
from India or abroad. If it’s from abroad – they can be as FDI
or FPI. (Details will be discussed later.) As India’s Current
Account Deficit is widening due to increased Oil Import, in this
age of globalization, we cannot say NO to FDI or FPI. Why
private investment in India: For a country to grow and
increase its income, the production has to be increased. More
goods and services has to be produced. Infrastructure to
support production – transport, energy and communication –
should also be developed. But how can a nation with near
30% of population below poverty line, invest in production or
infrastructure? Who has money to invest? Government?
Public Private Partnership Model: PPP means combining
the best benefit from both public and private investments.
Some of the Project Finance Schemes are as below:
– 1. BOT (build–operate–transfer).
– 2. BOOT (build–own–operate–transfer).
– 3. BOO (build–own–operate).
– 4. BLT (build–lease–transfer).
– 5. DBFO (design–build–finance–operate).
– 6. DBOT (design–build–operate–transfer).
– 7. DCMF (design–construct–manage–finance).
Again, depending from where investment comes, there are
two other investment models.
• Domestic Investment Model – It can be from Public, Private
or PPP.
• Foreign Investment Model – It can be 100% FDI or Foreign-
Domestic Mix.
And, depending on where the investment goes (or how
investments are planned), there are various investment
models. A few include:
• Sector Specific Investment Models (In SEZ or MIZ etc).
• Cluster Investment Model (Eg: Food Processing Industries)
Role of State,
PPP (Public-Private Partnership),
• Public-private partnerships involve collaboration between a government
agency and a private-sector company that can be used to finance, build, and
operate projects, such as public transportation networks, parks, and
convention centers. Financing a project through a public-private partnership
can allow a project to be completed sooner or make it a possibility in the first
place.
• In recent years, Indian government has given a greater impetus to metro rail
expansion. In 2018 itself, 6 new metro rail projects have been sanctioned.
• In recent policy regime change there is a greater involvement of private
sector in financing and developing these projects.
• In this context, concerns have been raised due to public–private partnerships
in financing and developing metro projects, and the possible implications of
these on patterns of urban land use.
Problems with PPP Projects
• PPP projects have been stuck in issues such as disputes in existing
contracts, non-availability of capital and regulatory hurdles related to
the acquisition of land.
• Indian government has a poor record in regulating PPPs in practice.
• Metro projects become sites of crony capitalism and a means for
accumulating land by private companies.
• Across the world PPPs are facing problems, performance of PPPs
has been very mixed according to study conducted by various
research bodies.
• It is also argued that PPP is mere a ‘’language game” by
governments who find it difficult to push privatization, or when
politically it is difficult to contracting out.
• Loans for infrastructure projects are believed to comprise a large share
of the non-performing asset portfolio of public sector banks in India.
• In many sectors, PPP projects have turned into conduits of crony
capitalism.
• Many PPP projects in infrastructure sector are run by “politically
connected firms” which have used political connections to win
contracts.
• PPP firms use every opportunity for renegotiating contracts by citing
reasons like lower revenue or rise in costs which becomes a norm in
India.
• Frequent renegotiations also resulted into drain of larger share of
public resources.
• These firms create a moral hazard by their opportunistic behavior.
Vijay Kelkar Committee Report on Revisiting and
Revitalising PPP Model
Finance Minister in the Union Budget 2015-16 announced that the PPP
mode of infrastructure development has to be revisited and
revitalised.
• Key recommendations of the committee:
• Contracts need to focus more on service delivery instead of fiscal
benefits.
• Better identification and allocation of risks between stakeholders
• Prudent utilization of viability gap funds where user charges cannot
guarantee a robust revenue stream.
• Improved fiscal reporting practices and careful monitoring of
performance.
• Umbrella guidelines may be developed for stressed projects that
provide an overall framework for development and functioning of the
sector specific frameworks.
• Unsolicited Proposals ("Swiss Challenge") to be discouraged to
avoid information asymmetries and lack of transparency.
• Amend the Prevention of Corruption Act, 1988 to distinguish
between genuine errors in decision-making and acts of corruption.
• Set up an institution for invigorating private investments in infrastructure,
providing guidance for a national PPP policy and developments in PPP.
• An institutionalized mechanism like the National Facilitation
Committee (NFC) to ensure time bound resolution of issues.
• Ensure adoption of principles of good governance by the Special
Purpose Vehicle (SPV).
Way Forward
• New projects especially large-scale transit projects are significant for
increasing mobility and for the series of changes in land use patterns.
PPPs have the potential to deliver infrastructure projects better and
faster. Currently, PPP contracts focus more on fiscal benefits.
• NITI Aayog in its document 'Strategy for New India @75', targeted
investment rates to 36 per cent by 2022-23 from 28 percent of 2017-
2018.
• To raise the rate of investment (gross fixed capital formation as a share of
GDP) slew of measures will be required to boost both private and public
investment.
• Private investment needs be encouraged in infrastructure through a
renewed public-private partnership (PPP) mechanism on the lines
suggested by the Kelkar Committee.
Savings and Investment Trends.
• In India, savings have contributed a lot in the economic
development since the Indian economy took off in 1960s and
70s. In the past few decades, it has been around 33% of
GDP. However, high savings rate is a necessary condition
but not a sufficient one for economic development.
• Many times high savings in isolation does not lead even to
capital formation. One also needs sound banking and
financial institutions to mobilize the savings of economy. At
the same time, presence of entrepreneurship is also critical
to convert savings into productive investment
• Why is India’s savings rate going down?
• The fact that income has grown over the last couple of
years (albeit at a slower rate) makes it difficult to identify
the reason for this fall. Even consumption growth has
slowed down, which should ideally translate to higher
savings.
• One reason could be the shift towards services
consumption such as health and education, which have
become costlier. A bigger concern is the rise
in household debt. Easy availability of no-cost EMIs
on durables could be a big reason.
Growth of Large Industrial Houses Since Independence,
• The new economy is a buzzword describing new, high-growth
industries that are on the cutting edge of technology and are
the driving force of economic growth.
• The new economy is commonly believed to have started in the late
1990s, as high tech tools, particularly the internet and increasingly
powerful computers, made their way into the consumer and business
marketplace.
• The new economy was seen as a shift from a manufacturing and
commodity-based economy to one that used technology to create
new products and services at a rate that the traditional
manufacturing economy could not match.
• According to the Economic Times Research Beareau, in 1987-88, There are
251 big companies in private sector in which 101 are considered Jiant’ and 150
as mini Jiant. Rs 29,720 crore were invested in the Jiants’ The Biggest in these
is the Reliance Industries (which had 250,00 crore rupees assets in 1988). Next
come Tata Steel, Larson & Tubro, Tata Engineering. J. K. Synthetics, and
Southern Petro-Chemicals.
• In 1987, Tata Group had the biggest assets. Then came Birlas and Reliance.
Five Toppers out of 20 have increased their assets from 7312 crores in 1983 to
14311 crores in 1987 that is 95.7% growth during the period of 5 years. Also
they controlled 58.4% of the total resources under the top 20.
• This means that the utmost concentration has been in these 5 toppers. Among
these five, Reliance stood first in the growth rate, i.e., 259.2%. Among 20,
Chidambaram Group had the most spectacular growth rate. During 4 years it
had 910% growth in its assets; it has leaped up from the 47th position in 1983
to 9th in 1987.
Growth of Monopolies and Concentration of Economic
Power in India,

The growing dominance of leading technology firms has

occasioned an intense debate about the trade-offs
between efficiency and market power (i.e more efficient
tech companies gather more market power thereby giving
rise to monopolistic trends), while raising questions about
what the changing structure of markets will mean for
innovation and the distribution of wealth in the future.
• With respect to efficiency and competition, there is already cause for concern.
There is a steep decline in annual initial public offerings, showing that those
young firms are increasingly agreeing to be acquired, rather than trying to
grow into large public firms.
• At the same time, exit rates within many industries have remained
relatively flat despite an increase in productivity dispersion. In other
words, weaker producers aren’t being knocked out of the market,
implying a lack of dynamism in many sectors of the economy (for
example, a small tech company X is weak against the big company G, but
that doesn’t force X to shut down, instead it keeps on running on weak growth
and profits).

• Though there is no evidence of market concentration/monopolization

happening in the market, there is a chance for a higher price shift later on due
to this market disruption.
What is Market Disruption?
• Market disruption is a situation wherein markets cease to
function in a regular manner, typically characterized by
rapid and large market declines.
• Market disruptions can result from both physical threats
to the stock exchange or unusual trading (as in a crash).
• In either case, the disruption creates widespread panic
and results in disorderly market conditions.
• Firms are gaining market share by becoming more
efficient, and not simply by snatching up other firms
while antitrust authorities stand aside.
Well-known market leaders such as Facebook and Google
have been offering many products and services for free
(which obviously benefits consumers), and their business
models have raised a number of pressing questions.
• For example, one must consider whether the exchange of
personal data for the use of such services constitutes a
fair trade. There is also the matter of whom these
companies do charge for services, and whether those
costs (say, for the advertisements you are forced to
watch) are being passed back to consumers (in the form
of better/new technological solutions)
• Innovation is driven largely by competition, both within an industry and
further afield, as well as by the threat of future competition. So, even if one is
not too worried about the effects of concentration on innovation today, one
still must consider whether that could pose a threat to future dynamism.
• Market disruption (involving big-tech) is slowing down investment,
research and development, or the diffusion of innovation from
superstar firms (FAANGs: Facebook, Amazon, Apple, Netflix, and Google -
they guard their IP and technology as trade secrets and therefore the trickle-
down formula doesn’t work here).
• In addition to stifling competition, this practice (of concentrating
market power and the capacity to innovate, in the hands of a few big
tech companies) is also discouraging financing by venture
capitalists (because VCs prefer to fund start-ups or companies that bring
new ideas to the table, and seldom invest in big traditional tech companies
like Google).
Politicians and regulators should take a hard look at whether IP
and proprietary agglomerations of data are being used to stifle
competition or prevent the diffusion of new knowledge and
technologies across sectors. And they should consider policy
instruments that go beyond the scope of traditional antitrust.
– For example, some have suggested that individuals should have
a right to their individual data. This could potentially improve
diffusion because firms would become purchasers of data, rather
than sellers. No longer tied to any one platform, individuals could
distribute their data to competing firms. Policymakers could also
start to push for more interoperability between platforms, which
would limit how much users could be tied to any particular
platform.
• In terms of labour, policymakers could intervene in a
number of ways. For example, there might be a case for
antitrust action against “non-compete” contracts*, which
essentially impose restraints on trade (of labour, in this
case).
• Can policymakers win back the public’s confidence,
maintain global economic stability, and find ways to
accommodate widespread technological disruptions
all at the same time?
Antitrust laws in India
• For years, India had its own version of competition law, which was enacted
through legislation called the Monopolies and Restrictive Trade Practices Act
1969 (MRTP Act).
• This legislation, based on principles of a “command and control” economy, was
designed to put in place a regulatory regime in the country which did not allow
concentration of economic power in a few hands that were prejudicial to public
interest and therefore prohibited any monopolistic and restrictive trade practices.
• Post-economic liberalization in 1991, it became imperative to put in place a
competition law regime that was more responsive to the economic realities of the
nation and consistent with international practices.
• Consequently, in 2002, the Indian Parliament approved comprehensive
competition legislation — the Competition Act 2002 (Competition Act), to regulate
business practices in India so as to prevent practices having an Appreciable
Adverse Effect on Competition (AAEC) in India.
Extent of the Concentration of Economic Power in India:
• In a developing economy such concentration of economic power
widens the gap of disparity in income and wealth, which is harmful to
the development of the country. This malady is growing fast in India.
Many committees were formed to study it and to suggest remedies.
1. Mahalanobis Committee (1960):
• According to this committee, the working system of the planned
economy has encouraged the growth of big companies in Indian
industries. These received financial assistance from Indian Industrial
Finance Corporation, National Industrial Development Corporation
etc., which are public institutions. These have derived more profit of
tax reliefs and other facilities.
2. Monopoly Enquiry Commission (1964):
• Monopoly Enquiry Commission (1964) has studied the extent,
effect and causes of this concentration and concludes that,
“Concentration has been promoted more by way of planned
economy which was adopted for rapid industrialisation in the
country.” The main causes, according to the commission, are
defective licensing system and discrimination in availability of
institutional loans.
3. Other Committees:
• Hazari Committee Report (1966) and Batta Committee (1967)
have also underlined that big houses had adopted corrupt means
for getting licences. 8% big houses received 38% licences.
Competition Policy and Competition Law,
• Competition Commission of India (CCI) is a statutory body of
the Government of India responsible for enforcing the Competition Act,
2002, it was duly constituted in March 2009.
• The Monopolies and Restrictive Trade Practices Act, 1969 (MRTP
Act) was repealed and replaced by the Competition Act, 2002, on the
recommendations of Raghavan committee.
• Competition Commission of India aims to establish a robust competitive
environment.
– Through proactive engagement with all stakeholders, including
consumers, industry, government and international jurisdictions.
– By being a knowledge intensive organization with high competence level.
– Through professionalism, transparency, resolve and wisdom in
enforcement.
Competition Act, 2002
• The Competition Act was passed in 2002 and has been amended by
the Competition (Amendment) Act, 2007. It follows the philosophy of
modern competition laws.
– The Act prohibits anti-competitive agreements, abuse of dominant
position by enterprises and regulates combinations (acquisition,
acquiring of control and M&A), which causes or likely to cause an
appreciable adverse effect on competition within India.
– In accordance with the provisions of the Amendment Act, the
Competition Commission of India and the Competition Appellate
Tribunal have been established.
– Government replaced Competition Appellate Tribunal (COMPAT) with
the National Company Law Appellate Tribunal (NCLAT) in 2017.
Judgements of CCI
• CCI imposed a fine of Rs. 63.07 billion (US$910 million) on 11 cement companies
for cartelisation in June 2012. It claimed that cement companies met regularly to fix
prices, control market share and hold back supply which earned them illegal profits.
• CCI imposed a penalty of Rs. 522 million (US$7.6 million) on the Board of Control
for Cricket in India (BCCI) in 2013, for misusing its dominant position.
– The CCI found that IPL team ownership agreements were unfair and
discriminatory and that the terms of the IPL franchise agreements were loaded in
favor of BCCI and franchises had no say in the terms of the contract.
• CCI imposed a fine of Rs. 10 million upon Google in 2014 for failure to comply with
the directions given by the Director General (DG) seeking information and documents.
• CCI imposed a fine of Rs. 258 crores upon Three Airlines in 2015.
– Competition Commission of India (CCI) had penalized the three airlines
for cartelisation in determining the fuel surcharge on air cargo.
• CCI ordered a probe into the functioning of Cellular Operators
Association of India (COAI) following a complaint filed by Reliance
Jio against the cartelization by its rivals Bharti Airtel, Vodafone India
and Idea cellular.
• The commission ordered an antitrust probe against Google for
abusing its dominant position with Android to block market rivals.
This probe was ordered on the basis of the analysis of a similar case
in the EU where Google was found guilty and fined.
• CCI issued letters to handset makers in 2019, seeking details of
terms and conditions of their agreement with Google.
– This is to ascertain if Google imposed any restrictions on them
for using the company's apps in the past 8 years from 2011.
Need of CCI
• Promote free enterprise: Competition laws have been described as the
Magna Carta of free enterprise. Competition is important for the preservation
of economic freedom and our free enterprise system.
• Protect against market distortions: The need for competition law arises
because market can suffer from failures and distortions, and various players
can resort to anti- competitive activities such as cartels, abuse of dominance
etc. which adversely impact economic efficiency and consumer welfare.
– Thus, there is a need for competition law to provide a regulative force
which establishes effective control over economic activities.
• Promotes domestic industries: During the era in which the economies are
moving from closed economies to open economies, an effective competition
commission is essential to ensure the continued viability of domestic
industries, carefully balanced with attaining the benefits of foreign investment
increased competition.
GROWTH AND INEQUALITY,
In India, following are distinctive forms of social inequality:
• Gender
• The Global Gender Gap Report, 2018, ranks India at 142 among
149 countries.
• Four parameters for measuring gender inequality are economic
participation and opportunity, health and survival, educational
attainment and political empowerment.
• Gender wage gap is highest in India according International Labor
Organization women are paid 34% less than men.
• Women comprise over 42 per cent of the agricultural labour force in
the country, yet they own less than 2 percent of its farm
land according to the India Human Development Survey (IHDS).
Caste
• Caste is significant factor for determining access to resources like education,
income, health valued by individuals.
• India’s upper caste households earned nearly 47% more than the national
average annual household income, the top 10% within these castes owned 60%
of the wealth within the group in 2012, as per the World Inequality Database.
Religion
• Religious identities are significant for an individual’s ability to mobilize resources.
• Religious identities can cause prejudices which may lead to economic exclusion
and other forms of discrimination which can impact jobs and livelihood
opportunities.
• While minorities such as Christians, Parsis and Jains have a larger share of
income/consumption than their population share, Muslim and Buddhist
populations have significantly lower access to economic resources.
• Economic Inequality
• The 2019 report by Oxfam, titled "Public good or Private
Wealth?" showed that India’s top 10% holds 77.4% of the total
national wealth, while the top 1% holds 51.53% of the wealth.
• The bottom 60% population holds only 4.8% of the national
wealth.
• 13.6 crore Indians, who make up the poorest 10% of the
country, have continued to remain in debt for the past 15
years.
• The Gini coefficient of wealth in India in 2017 is at 0.83, which
puts India among the countries with highest inequality
countries.
Consequences of Inequalities
• Inequalities tend to produce social conflict among the social
groups e.g. caste groups like Jaats, Maratha, Patels are
demanding reservations but this demand is opposed by caste
groups already claiming the benefits of reservations, such
clash of interest due to perceived inequality tend to produce
violent conflicts between opposing caste groups.
• Inequalities among ethnic groups have led to various ethnic
movements demanding separate states or autonomous
regions or even outright secession from India. North East has
been rocked by numerous such ethnic movement e.g. by
Nagas for greater Nagalim etc.
• Religious inequality tends to generate feeling of exclusion among
religious minority groups. This reduces their participation in
mainstream, in India religious minorities have large population their
economic exclusion compromises the GDP growth of nation as
whole.
• Poor development indicators like IMR, MMR, low per capita income,
lower education and learning outcomes at schools, high rate of
population growth can be traced to existing socio-economic
inequalities.
• High economic inequality is detrimental to public healthcare and
education. Upper and Middle classes do not have vested interest in
well functioning public healthcare and education as they have means
to access private healthcare and education.
Measures to Deal with Inequalities
• Constitutional Provision
– Enforcement of Constitutional Guarantee of equality as enshrined
in fundamental rights. Articles 14, 15 and 16 form part of a
scheme of the Constitutional Right to Equality. Article 15 and 16 are
incidents of guarantees of Equality, and gives effect to Article 14.
• Promoting Civil Society
– Provide a greater voice to traditionally oppressed and suppressed
groups, including by enabling civil society groups like unions and
association with in these groups.
– Scheduled castes and Scheduled tribes should be motivated to
become entrepreneurs, schemes like Stand up India need to be
expanded to widen its reach by increasing funding.
• Women Empowerment
– For gender equality policies like affirmative action by reserving seats
in legislatures, increasing reservation at Local self government both
at Urban and village level to 50% in all states, strict implementation
of The Equal Remuneration act,1976 to remove wage gap, making
education curriculum gender sensitive, raising awareness about
women right, changing social norms through schemes like Beti
Bachao Beti Padhao etc.
• Inclusion of Religious Minorities 
– Religious minority groups need special attention through
representation in government jobs, provision of institutional credit,
improvement of their education access, protection of their human
rights by empowering National commission for Minority,
strengthening rule of law etc.
• Progressive Taxes
– Additional public resources for public services by progressive taxes on
wealthy more and by increasing the effective taxation on corporations, more
importantly broadening the tax base through better monitoring of financial
transactions.
• Economic Policies
– By ensuring universal access to public funded high quality services like
Public health and education, social security benefits, employment guarantee
schemes; inequality can be reduced to great extent.
• Employment Generation
– The failure to grow manufacturing sectors like Textile, Clothing, automobiles,
consumer goods etc. is the important reason of rising inequalities.
– The Labor-intensive manufacturing has the potential to absorb millions of
people who are leaving farming while service sector tend to benefit majorly
urban middle class.
A "shining India", which is conflicting internationally and
benefiting from the powers of globalization, technological
developments and economies of scale, has grabbed the
attention of the media and the world. On the contrary,
another facade of India is “suffering India”, not as well
exposed but even more important, and has
unsatisfactorily wide samples of its population who are
poor and weak
• India as an Economic Superpower,
• A superpower is a country which has the capacity to
project dominating power and influence anywhere in the
world. Currently, the United States is the only country
which fulfills the criteria to be considered a superpower.
Superpower status is achieved by combining means of
technological, cultural, military and economic strength as
well as diplomatic and soft power influence.
• Reasons for the growing pride among Indians are not hard to find. In
terms of economy, based on purchasing power parity, the Indian
economy is the world's third-largest. High-tech centers including
Bangalore and Hyderabad, have given way to rise of top IT
companies like Infosys and Wipro. Besides, TCS, HCL, Tech
Mahindra are among the international elite in their industry.
• When it comes to telecom, India is currently the world's second-
largest telecommunications market with a subscriber base of 1.20
billion. India has as many cell phone users; almost nowhere is the
telecom industry growing faster. Indian Television industry has more
than 400 private television channels and has an overall market size
of $22.5 billion. The subcontinent is also making great strides in
renewable energy sectors like Solar and wind power.
• When it comes to defence, Indian Air Force stands at number 4 in
the list of strongest Air Force, India gets placed in 7th rank in the
powerful navies’ list and Indian Army again placed in 4th position at
the best army rankings.
• Though, India is now the world's largest weapons importer it is slowly
becoming self reliant player. With sheer military size, India is now
aggressively seeking a seat on the United Nations Security Council.
It's also a nuclear power that has expanded its arsenal of warheads.
Despite the strong displeasure among the powerful nations, India
has no intention of signing the Nuclear Non-proliferation Treaty.
• In terms of science and technology, the Indians have sent satellites
into space some time ago, and have already launched some to Mars
and the Moon.
Growth of the Indian Middle Class,

The rise of the middle class has been an outstanding

feature of the social life of the developed industrial
societies. The Indian middle class now deserves serious
attention if only because of its great size and diversity. It
has grown steadily in size since Independence and
particularly in the last couple of decades. At a moderate
estimate, it will number 100 million which is more than the
total population of any European country
Pre Independence period
• Middle class began to emerge in India in the middle of the 19th century .
• The Britishers transplanted into India a new form of government, social
and economic organisation to suit to their colonial interest.
• The British introduced a new educational policy in India with a view to
creating a class, which might assist them in administration, and in
economic transaction.
• The quote Macaulay, the founder of British education policy in India, this
was to be a class, Indian in blood and colour, but English in taste, in
opinions in morals and intellect. Thus, the British economic and
educational policies planned for the development of a middle class in
India to be a class of imitators and not the originators of new values and
ideas.
• The middle class first emerged in the presidency capitals
of Calcutta, Bombay and Madras, in law courts, hospitals,
banks and offices set up for commercial administrative
and other purposes. The backbone of the middle class is
a particular kind of occupational system which was new
in the 19th century, at least outside the West, but has
now become a worldwide phenomenon. It is a highly
differentiated system with clerical and other subordinate
non-manual occupations, at one end, and superior
professional, managerial and administrative ones, at the
other.
 According to B.B. Mishra in the preindependence period , Indian middle classes consisted in
the main of the following groups:

Urban Rural
Merchants, agents and active properties of modern trading Joint and peasant proprietors, rentiers, farmers of
firms. revenue, smallest holders of estate, etc.
Salaried executives viz., managers, inspectors, supervisors, Joint and peasant proprietors, rentiers, farmers of
technical staff etc. revenue, smallest holders of estate, etc.
High salaried officers of the trade associations, political, Rural entrepreneurs, salaried managers of landed
philanthropic, cultural, educational, etc. bodies. estates.
Civil servants, and other public servants, excepting those at the
top beyond the rank of secretaries to the government.
Professionals viz., lawyers, doctors, professors, lecturers,
journalists, artists, priests etc.
Full time students studying at the university or similar level.
Clerks, assistants, and other non-manual workers.
Upper range of the secondary school teachers, officers of local
bodies, social and political workers.
Post-independence period
• In the post-independence period, education, urbanization and
industrialization have encouraged the growth of middle class in India.
The emergence and expansion of new middle class has been a
distinctive feature of Indian society particularly after independence.
In post independence period, a number of social categories of
personnel associated with the technological scientific and
managerial developments have emerged. There is tremendous
expansion of non-manual sector in the socio-economic life of modern
urban-industrial society. Scientists, technocrats, managers,
bureaucrats, white-collar employees and various other professional
and technical groups represent the non-manual sector of the urban-
industrial society. They are considered the new middle class
Indian MNCs : Mergers and Acquisitions,
• Just like Charles Darwin’s theory of ‘Survival of the Fittest,’ only
the stronger companies survive in the end. The weak ones cease to
exist. Sometimes they join forces to take on a stronger threat to their
existence. Animal Spirits drive the companies too. 
• Mergers and Acquisitions are an inevitable part of a company’s
lifecycle. This piece talks about the best M&A deals of the Indian
market. They affect not only the Indian companies but also Indian
consumers.
The top-10 deals of the 21st century are the following (in no particular
order).
1. The E-Commerce Flip
• Flipkart is the other e-commerce giant in the Indian market. The Singapore
based firm acquired fashion and lifestyle website ‘Myntra’ in 2014, for ₹2000
crores. Just as Flipkart moved from selling books to other consumer stuff,
Myntra catapulted it in the clothing e-commerce domain. Acquiring ‘Jabong’
(in 2017) and ‘Myntra’ has made it India’s top apparel e-commerce company.
• The following year in 2018, Wal-Mart took over Flipkart in a deal of $16
billion, defeating Amazon. This deal gave Wal-Mart a fresh lease of life. It got
a chance to compete with Amazon in its field. Readers should know that
Amazon already hit hard the retail chain market of Wal-Mart. 
• Had Amazon won the deal given their deep pockets; there would have been
a virtual monopoly of Amazon in Indian e-commerce. Hence, the deal fared
well for Indian consumers.
2. The Retail Future
• Future Group owns its retail subsidiary’s under the name of
‘Future Value Retail Ltd.’ This group in 2016 bought ‘Heritage
Foods.’ Heritage got a 3.95% share in Future Retail in the
deal. The valuation of Heritage shares was ₹295 crores,
which currently values over ₹600 crores!
• Future Retail also entered in a deal with Amazon in 2019.
Amazon has bought minority shares, with an option to
purchase promoters' shares in the company after three
years.
• Future Retail is planning to expand on ‘Easy Day’ with both
these ventures.
• 3. The Start-up Stories
• Zomato recently acquired Uber Eats India for ₹2492 crores. Such
mergers are quite common in start-ups. The reason is that most of
the Indian start-ups are backed by deep pockets and depend so
much on investors. If the funding stops, start-ups end in the lurch.
Some other deep pockets would go ahead and buy them. Zomato
hence acquired its competition Uber Eats India, contesting another
competitor ‘Swiggy’ in the bid.
• This is similar to how Ola once bought ‘TaxiForSure.’ TaxiForSure
ran out of money. It increased fares. Ola arrived in the market with
fresh funding and hence offered cheap tickets. It later bought
‘TaxiForSure’ with only competition surviving in Uber.
• 4. The Vehicle Rover
• In 2008, Ford Motors was running its luxury subsidiary ‘Jaguar-Land
Rover (JLR)’ in a loss of $520 million. Nobody was ready to buy such
an indebted car company that was consistently losing its market.
• Then Tata arrived at its rescue. It not only bought the JLR for $2.3
billion, but it also reported a $3400 million profit in the year 2019. 
• Merger markets have much folklore. One says that Tata once wanted
to sell off Tata Motors to Ford Motor Company around 1998. Ford
humiliated the Asian giant. Tata backed off. Ten years later, when
Tata Motors was capable enough of the deal, Ford expressed its
gratitude to Tata that they were buying it.
5. The Steel Melting Pot
• India is one of the biggest Steel markets in the world. India is one of the largest
consumers and producers of Steel. Three major M&A deals happened in three
different scenarios.
• Amidst a recession, various European Steel companies were going bankrupt. Indian
companies felt they had the right time to buy. Mittal Steel merged with the Luxembourg
based steel giant ‘Arcelor Steel.’ The deal valued whopping $33.1 billion. The new
company, ‘ArcelorMittal,’ has now become the world’s biggest steel company.
Another deal came from Tata Steel. It went ahead to buy UK based Corus Steel. Tata
bought Corus for $8.1 billion and later renamed it Tata Steel Europe. Unfortunately, the
deal did not fare desired results for Tata Steel, and many of its officials call it a not so
wise move.
• Tata Steel recently acquired ‘Bhushan Steel’ for ₹ 35200 crores through the
Insolvency proceedings under National Company Law Tribunal (NCLT). Though the
deal looks good for Tata, it is yet to be seen if ‘Tata Steel BSL’ follows footsteps of
ArcelorMittal or Tata Steel Europe.
Public Sector Usurping
• Governments in India have milked ‘Public Sector Undertakings’ (PSUs) at
their will. Mergers and Acquisitions in PSUs mostly happen to suit the
government. The incorporation of PSU banks is just one example. Recently,
Life Insurance Corporation of India (LIC) was forced to buy the
underperforming IDBI Bank.
• LIC is a cash-rich arm of government. IDBI losses became unbearable for
the government. Its NPAs crossed 31%. Privatization of IDBI would have
invited ruckus from employee unions and customers while would have raised
market eyebrows over the health of other PSU banks as well.
• Ultimately, LIC bought a 51% stake in IDBI. The Insurance Regulatory and
Development Authority of India (IRDAI) allows only a 15% acquisition of any
company. Despite this, the mechanisms channelized so that the deal goes
through.
• Similarly, ONGC acquired a 51% stake in Hindustan Petroleum (HPCL).
Outsourcing
• The definition of outsourcing is hiring a person who
doesn’t work in your company to perform your company’s
services. Most companies use outsourcing to reduce
costs. Outsourcing can link to various job positions, from
IT to customer support. 
• This business strategy was first recognized in 1989. 
• ,
Top 10 Outsourcing Statistics for 2021  
• Around 300,000 jobs are outsourced by the US annually.
• The top reason for outsourcing (70%) is cost reduction.
• The total IT budget in 2020 grew from 12.7% in 2019 to 13.6%.
• 58.8% of US marketers saw no covid-related changes in the outsourcing
marketing activities.
•  Larger companies are 66% more likely to outsource than small
businesses.
• 36% of workers in the US are part of the “gig economy.”
• The global outsourcing market was worth $92.5 billion in 2019.
• By 2025, the global IT outsourcing market will be worth $397.6 billion.
• 83% of IT leaders are planning to outsource their security to an MSP in
2021.
• 24% of small businesses outsource to increase the efficiency of their
business.
Nationalism and Globalization,
• Globalization and Nationalism are said to be the two different parts of
the same coin. In a way, both are connected with each other, and still
are very different from each other. In the changing world, where
world is shrinking with the use of latest technology, people are
finding it tough to stay in touch with their own sense of nationalism.

• In current context the globalization versus nationalism has become

an important dichotomy and issue of controversies. The issues have
mainly become a crucial discourse in developed countries through a
political channel.
If we see at deeper level, we can find out that:
• The new nationalists seek to reassert control over their own
countries. Their targets are global structures such as the European
Union, the World Trade Organization (WTO), NATO, the United
Nations and the North American Free Trade Agreement. However,
the new nationalists posit no credible plans for replacing the
institutions of globalization they seek to tear down.
• The globalists have underestimated the collateral damage
globalization has inflicted upon workers. They placed too much
weight on the strategic advantages of trade and dismissed too
readily the value that many ordinary citizens still attach to national
borders and cultural cohesion.
• Intense backlash against immigration (and globalism) is cultural, not
fundamentally economic. The voters for Brexit and for Trump were
bothered less by competition from immigrants than by their
perceived effect on the country’s linguistic, religious and cultural
norms. This is perhaps the most troubling aspect of this new
nationalism.
• The great question for the world  may be this: How do we reap the
gains of global cooperation in trade, culture, education, human
rights, and environmental protection while respecting—rather than
diluting or crushing—the world’s many local, national, and other
parochial identities, each with its own traditions and moral order? In
what kind of world can globalists and nationalists live together in
peace is the solution that we need to find out.
• Intense backlash against immigration (and globalism) is cultural, not
fundamentally economic. The voters for Brexit and for Trump were
bothered less by competition from immigrants than by their
perceived effect on the country’s linguistic, religious and cultural
norms. This is perhaps the most troubling aspect of this new
nationalism.
• The great question for the world  may be this: How do we reap the
gains of global cooperation in trade, culture, education, human
rights, and environmental protection while respecting—rather than
diluting or crushing—the world’s many local, national, and other
parochial identities, each with its own traditions and moral order? In
what kind of world can globalists and nationalists live together in
peace is the solution that we need to find out.
Small-scale and Cottage Enterprises,
Role of Small Scale Industries in Indian Economy
1. Small Scale Industries Provides Employment
2. SSI Facilitates Women Growth
3. SSI Brings Balanced Regional Development
4. SSI Helps in Mobilization of Local Resources
5. SSI Paves for Optimisation of Capital
6. SSI Promotes Exports
7. SSI Complements Large Scale Industries
8. SSI Meets Consumer Demands
9. SSI Ensures Social Advantage
10. Develops Entrepreneurship
• Poverty,
Vulnerability and Unorganized Sector Employment-The High Degree of
Correlation,
• The unorganized sector which includes agricultural sector, construction,
fisheries, street vendors, petty service providers, salt pans, domestic work,
reworks industries, beedi industries etc comprises the overwhelming
majority of workers in the country.
• Unorganized sector is marked by low incomes, unstable and irregular
employment, and lack of protection either from legislation or trade unions.
The workers in unorganized sector are so scattered that the
implementation of the Legislation is very inadequate and ineffective.
• The growth of Indian economy has been biased against the informal
branch, employing more than 90% of the workforce, while the other branch
dominated by law-abiding big firms, seen as a source of revenue to the
state and thus, nurtured and supported, employs the rest of the workforce.
Reasons for a rise in the Informal sector
• Taxation and regulation which make legal production and
trading very expensive.
• Labour and market rigidities.
• Poor skill levels in general.
• Increasing competition due to globalization.
• Poor financial inclusion
• Low level of education and vocational skills.
Problems associated with the unorganized sector
• Workers in the unorganized sector do not have steady employment,
secure or sustainable incomes and are not covered by social
security protection.
• Problems of the workforce- little awareness of workplace hazards,
extended work hours, exploitation, no concept of occupational
safety/services, lack of implementation of Health & Safety legislation,
no concept of Trade/Labour Union, No guaranteed minimum wages,
Vulnerable to diseases, etc.
• Problems of women workers: Desperately poor low wages,
fraudulent contractors, disease-causing environments, Deplorable
social conditions, sexual harassment, and women are underpaid
compared to their male counterparts.
• The problem of child labour: Hazardous working conditions, Child
trafficking, child exploitation.
• Problems faced by Govt. - Problem of definition and identification of
unorganized labour, workforce uneducated about the benefits, scattered
nature of sector, employers avoid any form of regulation, unorganized
sectors contribute to almost 60% of GDP (apart from providing livelihood
to population) despite this the same labour laws cannot be applied to the
unorganized sector.
• Impact of Globalization: With the advent of globalization and resultant
reorganization of production chains led to a situation where production
systems are becoming increasingly atypical and non-standard, involving
flexible workforce, engaged in temporary and part-time employment,
which is seen largely as a measure adopted by the employers to
reduce labour cost in the face of stiff competition.
Measures taken by the government
• As per provisions of The Unorganized Workers Social Security Act, 2008,
every unorganized worker shall be eligible for registration.
• Every unorganized worker shall be registered by the District Administration.
• The State Governments are mandated to register the Unorganized Workers
and to provide benefits of welfare schemes other than the three basic social
security schemes of the Central Government i.e. (i) life and disability cover,
(ii) health and maternity benefits, and (iii) old age protection.
• The Central Government has also constituted the National Social Security
Board at Central level to recommend to the Central Government suitable
schemes for different sections of unorganized workers and to monitor the
implementation of schemes and advise the Central Government on matters
arising out of the administration of the Act.
• Similarly, State Governments/UT Administrations are required to constitute
their State/UT Social Security Board to carry out the provisions of the Act
Social Security Schemes for Workers in Unorganized Sector
• The various social security schemes currently in force for the
unorganized workers are:
– Indira Gandhi National Old Age Pension Schemes
– National Family Benefit Scheme
– Handloom Weaver's Comprehensive Welfare Scheme
– Handicraft Artesian Comprehensive Welfare Scheme
– Pension to Master Craft persons
– National Scheme for Welfare of Fishermen and Training and
Extension.
– Janshree Bima Yojana
– Aam Admi Bima Yojana
– Rashtriya Swathya Bima Yojana
Estimate of Organized and Unorganized Workers
While everyone agrees that most of Indian workforce today
works in the informal or unorganized sector, but absence of
a national database or a single platform makes it difficult to
identify them and understand the exact and accurate size.
The Economic Survey of 2018-19 says that almost 93% of
the total workforce in India is informal. On the other hand,
Niti Aayog's “Strategy for New India at 75”, released in
November 2018, says: "by some estimates, India's informal
sector employs approximately 85% of all workers". Thus,
estimates and numbers vary widely.
Question Answer / Final Discussion