Monopolies in various sectors pushing prices higher: Jairam Ramesh

Congress general secretary Jairam Ramesh. File Pic

The Congress on Wednesday said growing concentration of economic power is having a negative effect on people's lives as monopolies in various sectors are pushing prices higher.

Congress general secretary Jairam Ramesh claimed that profit margins across all sectors have doubled from 18 percent in 2015 to 36 percent in 2021 due to growing market concentrations created by the Modi dispensation.

He said a research paper by top economist, Dr Viral Acharya has substantiated this concern about higher profit margins due to monopolies in several sectors.

Evidence by the ex-RBI Deputy Governor Acharya shows that Modi government's alleged "monopolistic" friends are a big cause of price rise in India, the Congress leader said.

"As the Adani 'megascam' has shown, PM Modi's 'suit-boot ki sarkaar' has systematically helped his cronies build large, concentrated monopolies across various sectors since he took office. Now we have fresh and credible evidence that these monopolies are driving price rise in the country by misusing their market power to systematically charge 10-30 per cent higher prices than their competitors," he alleged in a statement.

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Ramesh said this evidence comes to us from the internationally renowned financial economist Acharya, who served as deputy governor of the Reserve Bank of India from 2017 to 2019.

"This fresh evidence supports the Congress party's stand that the Modi government, by handing out favours to its crony friends, is hurting consumers, small businesses and even those large businesses trying to compete with these monopolies. In return for these favours, PM Modi and the BJP are rewarded with funding from electoral bonds," he alleged.

"Right through Bharat Jodo Yatra, Rahul Gandhi kept drawing attention to growing concentration of economic power in India and its effects on our daily lives. Now, there's a solid research paper by top economist, Dr Viral Acharya, substantiating this concern," Ramesh also tweeted.

"PM Modi's 'enabling of monopolies' is part of his 'disastrous' economic policies which have inflicted a price on Indians, such as a badly designed GST, sky-high prices for petrol and gas, indiscriminate privatisation of agriculture and PSUs," he said.

The Congress supports an economy which benefits all, including private enterprise with a fair and level playing field for large and small businesses, especially MSMEs that generate the bulk of employment in the economy, he noted in the statement.

This, he said, was the demand of the people during the Bharat Jodo Yatra, and has gained urgency after the exposure of the Adani "megascam".

"The Congress will continue to raise these issues in national interest, in Parliament, in the media, and in the streets of every village, town and city in India," he said.

The Congress MP said rising prices are being driven by five major groups, including the Adani Group, that are building "monopolies" in 40 sectors, including cement, chemicals, petrol, construction, telecom and retail trade. These groups, called the Big 5, now own 18 per cent of all assets.

"According to Dr. Acharya's analysis, this contributes to price rise in three steps: Since 2015, the Big 5 have entered many new sectors by acquiring smaller companies, and have also expanded this market share within these sectors; the Modi government has favoured Big 5 monopolists by preferentially allocating them projects, allowing predatory pricing and shielding them from international competition by raising import tariffs. In cases such as Adani we have also seen public sector institutions like SBI and LIC being 'forced' to provide loans and investment to them," he said.

"This favourable treatment has allowed the Big 5 to charge increasingly higher prices than their competitors," he said.

"As a result of growing market concentration, the average profit margin charged across all goods sectors has nearly doubled from 18 per cent in 2015 to 36 per cent in 2021. These rising prices directly hurt consumers," Ramesh also said.

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