The Visible and Invisible- Crony Capitalism in India






CRONY CAPITALISM is at force where in an economy the growth and development of the corporate houses and business class is  greatly affected by the nexus they share with the government and the political party at power. Decisions or government in a crony capitalist economy are based on favouritism and sycophancy towards huge corporate houses for their mutual benefits. 


An economic system in which individuals and businesses with political connections and influence are favoured ( as through tax breaks, grants and other forms of government assistance) in ways seen as suppressing open competition in free market. 

-Merrian Webster

Picture credit -Barbara Kelley


Pre- independence

Pre -independence the rulers of India benefitted from British crony capitalism. The European business houses were able to dominate the local free Indian markets because there was economic, political, financial and administrative support given to them by native businesses and politicians complemented by social discriminations based on colour, caste, region, gender, Payscale, religion and what not. It gave birth to ideologies such as Bagchi where only whites were given superiority at the top key positions in the administrative and military structure. 

Post - independence

After independence as the power got transferred, Indian capitalism took a new turn of 'concentration of economic power'. The licence - permit- quota-raj introduced by Swatantra party  1950-1980 led to imposition of control investment, production, imports, exports, banking and finance, land and labour, prices and capital markets. These restrictions made it difficult for entrepreneurs and businesses to come up hence giving rise to corruption where the Indian Politicians used these restrictions in their favour as they framed out permits and license to business houses in return for electoral funding and campaigns. 


Any businessman who aims to achieve massive success and be at the top of the game is faced by may regulative barrier by the government as well as other bigger competitors. To escape such hurdles they need to make strong close relationships with the bureaucrats and ruling political parties. Both the parties envolved in carrying forward this corrupt legacy of cronyism are their for individual personal benefits and money typically lubricates their bond. 

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Favourable for political parties

The political parties need majority of votes for themselves to stay at power and to get more votes they need to influence the poor class and underprivileged section in their favour. Election requires high amount of funding and to get that businessmen provide handsome amount of funds

Favourable for selective business class

For growth and development the business class needs the support of the government as many competitors are in line and to get a competitive edge over them government provides favourable laws and regulations. Government exercises control over taxing authorities, subsidy allocation, financial and regulatory functions, hence using these power as a tool in return these business classes get relaxation and providing them a monopolistic edge over the other limiting competitions against the free markets. 


Our economy is a mixed economy that is capitalist as well as socialist but our government took the worst face of both them and uses them for personal gain to stay in power. 

The government to remain in power exploits the hard earned money of the public as a tool. The GDP of India is at its worst, the education facilities are poor, medical facilities and hospitals do not have proper facilities, no food in the ration houses for the poor, improper infrastructure, proper loans and banking facilities, distribution of subsidies and relaxation is biased still somehow Selective big business tycoons are able to expand their empire at a very fast pace as compared to other competitors in the market. It is because the government helps these corporate houses with the money of the public rather than investing them for the development of the weaker sections and in return the corporate houses provide funding and votes to the parties and in between the poor suffer as they are not able to afford their basic necessities dues to high cost and monopoly of few. 


It becomes a matter to be criticized when it starts feeding upon the rights of the smaller entrepreneurs trying to come up. Government gets elected by the people and for the people in the name of democracy but many corporate houses fund election and buy votes. There need to be a transparent system of election and an equal opportunity to excel should be provided to all the smaller scale, medium scale, upcoming entrepreneurs and small businesses. Government has been elected by the the citizens of India and it should start working for the betterment of all the sections of the society rather than opting favouritism for a few selective elite business classes who help them run the wheel of corruption. It's time to wake up a d smell the coffee. 

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  1. Keep Up the Good Work!

  2. Very nicely articulated

  3. angelayushi.99Jan. 15, 2021, 5:19 a.m.

    Worth Reading. Well explained.

  4. Very insightful and well written!

  5. Very insightful and well written!

  6. Great work.

  7. Great article m