The power and the glory - India has its own form of state-backed capitalism too

When people think of state capitalism, China springs to mind, with its giant and opaque government-controlled firms. But India, more cuddly and less competent, is not too dissimilar. Some 40% of the profits of its 100 biggest listed firms come from state-controlled ones. In finance, energy and natural resources, they control at least two-thirds of production. Most were partially privatised over the past two decades, letting in a small proportion of outside shareholders. The latest example was Coal India, the biggest producer of India’s main fuel. It was listed in 2010.


Over time, the zeal to sell big-enough chunks of these firms to enable them to become more independent has dissipated. But today’s halfway house is not all that bad. In aggregate, the 24 state outfits in the top 100 generated a 17% return on equity last financial year, on a par with the private sector, and profits almost doubled in the past five years. Privatisation has made some of them more efficient. Bharat Heavy Electricals, which makes kit for power stations, holds its own against Chinese competitors. And State Bank of India (SBI) is as tech-savvy as its private rivals. Read more at The Economist...