The fourth plan looked to the monopoly legislation and appropriate fiscal policy to reduce the concentration of economic power and further to encourage small scale industries.īesides these, government set up some historical committee towards monopoly power which prove mile stone in Indian economy like Mahalanobis Committee (1960), Monopoly Inquiry Commission (MIC, 1964) and MRTP Act (1969). The third five year plan follow the same objective of earlier plan’s and further gave more importance to the public sector to control the concentration of economic power. The objective of second five year plan was to reduction of inequalities in wealth and income and more even distribution of economic power. The different measures in different plans are: Government set different objective in their five years plans to check and achieve reduction in monopoly power. To prevent the economic concentration the Indian government taken several policy measures time to time. The article 39b and 39c of Indian constitution indicated the ‘directive principles of state policy”, where consider that the ownership and control of material resources of the community are so distributed as best to sub serve the common good and that the operation of the economic system does not result in the concentration of wealth and means of production to common detriment. The basic duty of any government is to control, distribute and give right of ownership of material resources in such a manner so that each and every individual get benefitted. Therefore, it is thought to play an important part in determining business behavior and performance. Thus, we see concentration is an important dimension of market structure. Concentration is the capacity to influence economic decisions affecting the lives of large number of people, which is wielded by one or more persons, who has some obtained such capacity (Vakil, 1973). Thus, concentration treated as a technical concept dealing with concentration ratio giving the shares of the largest few firms in respect of some specific characteristics. Thus, it is important to discuss the each and every aspects of concentration.Ĭoncentration defined as the economic position of a firm or industry in which enables the concern to command control over production (possession of considerable share of the total productive capacity, control over raw material and inputs) or market exchange (power to influence the supply) or employment (power to influence the terms and conditions in respect of employment) in respect of any good or service. The industrial theory assumes that concentration is an important component of the market structure which further determines the conduct and performance of concerned firm or industry. The economist should, therefore, analyze at least the economic effects and assess their importance (Citovsky 1955). The public are concerned about industrial concentration, because they are concerned about its economic and political effects. But, the markets of the real world differ mostly in the number of firms and their relative size. With the help of these two assumptions there is no possibility of discrepancy among price and marginal receipts to attain profit maximization. Theoretically one can consider perfect competitive market as the ideal market where two pivot assumptions i) large numbers of seller (buyer) and ii) independently acting seller (buyer) prevailed. Keywords: Automobile, Structure, Concentration, Reforms JEL Classification: L620 Introduction The study found that the economic reforms of 1991 dissolved the entry, exit and FDI restrictions which lead entry of foreign players and competition goes on increasing and the concentration ratio starts declining in Indian automobile industry. It further investigated firm level market shares of each individual firm in their respective segment from 1991-92 to 2013-14. The present paper analyzed the concentration ratio of each segment Indian automobile industry. It passed from different phases, the emergence of indigenous automobile manufactures and self reliance before 1983 to Freedom to Grow after 1991 economic reforms. The Indian automobile industry occupies a prominent place in Indian economy. A Refereed Monthly International Journal of ManagementĬoncentration in the Indian Automobile Industry
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