ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

Market PowerSubscribe to Market Power

Market Power and the Macroeconomy

Implications of the persistence of market power in the economy are not limited to higher prices. It has ramifi cations on income distribution, demand, and industrial performance. While higher prices are a visible outcome of the exertion of market power, other latent effects need a closer empirical scrutiny. The role of large conglomerates in shaping India’s industrial performance needs to be analysed against this backdrop.

Do Foreign Banks Affect Market Power, Efficiency, or Stability in India?

An assessment of foreign bank ownership’s direct and indirect effects on market power, efficiency, and stability in Indian banking produces two main results. First, foreign banks have greater market power, lower marginal cost of the production of bank output, greater price–cost margin, and higher insolvency risk than domestic banks. Second, greater foreign bank presence increases market power, reduces marginal cost of the production of bank output, increases price–cost margin, and reduces inefficiency, insolvency risk and net non-performing loan ratio of an individual bank. The findings have implications for a policy decision on foreign bank presence.

Atmanirbhar Bharat Abhiyan and Agriculture

In this short note, we critically examine two proposals specific to agriculture announced as part of Atmanirbhar Bharat Abhiyan and the subsequent ordinances. We argue that while the investment in infrastructure is a welcome step, market reforms proposed are inadequate to improve the prospects of smallholder farmers. An enabling ecosystem that enhances the market power of farmers must be created for smallholders to take advantage of the reform measures.

Conflict between Regulation and Competition Law in the Indian Telecom Sector

The debate regarding the respective realms of competition law and economic regulation is not new. In the Indian context, complaints filed against the telecom incumbents Airtel, Vodafone and Idea by Reliance Jio before the Telecom Regulatory Authority of India and the Competition Commission of India bring to the fore such an example. This case is analysed primarily through the legal standpoint, and it is argued that competition law intervention is warranted only in “gap” cases: where the regulatory regime cannot account for consumer welfare. Where the regulatory and competition agency reach conflicting decisions, the issue can be resolved by a third body whose decision is binding on both the regulator and the competition agency.

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