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View: Why India's corporate profits show a reverse trend despite the rise of superstar firms
Synopsis
In a perennially capital-starved country, further constrained by leveraged corporate balance sheets and reduced business risk appetites, it is the superstar firms that manage to attract large amounts of capital. At India’s level of development, any capital is welcome.
By Somnath MukherjeeLow corporate profit-to-GDP ratio, check. Single firm dominance in a range of industries, check. Dipping investment rates, check. Slowing productivity growth, check. India, circa 1990? Yes, but also, India circa 2020. Anaemic macros amid islands of prosperous micro-beneficiaries — the narrative is historically intuitive. But the reality is more complex.To be sure, the trend towards monopolisation of businesses is a fact.
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