The power of India's family businesses

Indian family-owned business groups have once again been thrust into the limelight following the US prosecution of the Adani Group for alleged corrupt behaviour.

- SIMON COMMANDER & NAVEEN THOMAS

While the charge is specific, the accusation that business groups benefit from connections to power has nothing new about it. Nor indeed is the view that these groups have too much market power with excessive concentration. However, much of that discussion has been stronger on assertion than on fact.

What is not up for argument is that successive Indian governments of differing political stripes have relied on a small number of family-owned and diversified business groups for implementing industrial and development policy. Such groups - Birla and Tata being the most well-known - have consequently dug in very successfully. Nine out of the top 20 family business groups (FBGs) in 1951 were still there in the 1990s. Although subsequently there has been more entry and exit, a stable core perennially occupies the top rankings. Has this persistence been accompanied by growing or decreasing concentration, and, ultimately, what impact has it had on competition?