Rise of Oligopolistic Dominance
As debt-laden distressed companies fall by the wayside, some cash-rich large companies are practically monopolising their sectors
Illustration by Siddhant Jumde
During the 26th meeting of the Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI), one of the MPC members - Jayant R. Varma, Professor, Finance and Accounting, IIM Ahmedabad - made an interesting observation, which many in government institutions would barely admit to. Anecdotal evidence suggests that in several sectors which are characterised by an oligopolistic core and a competitive periphery, the oligopolistic core has weathered the pandemic well and it is the competitive periphery that has been debilitated. Rising profits and profit margins, improving capacity utilisation and lack of new capacity additions create ripe conditions for the oligopolistic core to start exercising pricing power, he had said. An oligopoly is a form of market form where a sector/industry is
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