Amit Tandon on a future without promoters: “As family ownership gives way to institutionally- owned and -controlled companies, there are many questions that need to be asked, including what the implications on investment and growth are? Will businesses become more short-term and less long-term in outlook? Will these businesses re-invest in India over five or 10 years? Will managements have the same risk appetite? Will they be imbued with animal spirits in the same measure as the crop of Indian families? Will the institutions prefer to take money out and chase the next growth opportunity outside India? If India suddenly becomes a less attractive investment destination, where will risk capital come from? As business families have a charitable streak, how will philanthropy change? How will the changed ownership impact our society and polity and policy-making?”
Post-Covid, India’s Weakest Link May Be Its Informal Sector: from BloombergQuint. “Close to 80% of India’s workers are employed in the informal sector, which accounts for nearly 50% of the India’s GDP. Few high frequency economic indicators capture the health of this segment of the economy.”But a lot is at stake. Ignoring the informal sector can hurt jobs, wages, and even macro stability,” wrote Pranjul Bhandari, chief India economist at HSBC.The 20% of workers in India’s formal sector doing relatively well. But the fortunes of the remaining 80% are split in two halves, with those working in agriculture better off than those working outside of the agrarian economy, Bhandari wrote.”
Eamonn Butler: “The inability (or unwillingness) of business people to explain the public benefits of entrepreneurship and free markets is surely a huge weakness of capitalism, and a huge threat to it. By muddling capitalism with cronyism, such supposed champions do the cause no favours. The idea of capitalism is hard enough to understand already: the immediate benefits of interventions are easy to grasp, but not the long-term advantages of leaving markets and competition to work; and few people realise how delicate the market order is, and how wildly it can be thrown out of gear by even small political interventions.” [via CafeHayek]
