NEW DELHI: Raising questions about the creeping trend of "crony capitalism", Prime Minister Manmohan Singh has said industrialization could not depend only on large corporate groups and the country needed small and medium units for both growth and employment.
"We cannot depend only on a few large industrial houses and capitalists for driving our industrialization process. The employment intensive nature and the greater regional spread of SMEs makes them an attractive option for industrial growth," Singh said here.
Referring to media reports that India's top business leaders operate in "oligopolistic" market and in sectors where the government had conferred special privileges on a few, Singh said "this sounds like crony (monopolistic) capitalism".
"Are we encouraging crony capitalism? Is this a necessary but transient phase in the development of modern capitalism? Are we doing enough to protect consumers and small businesses from the consequences of crony capitalism," Singh asked. Inaugurating the new campus of Institute for Studies in Industrial Development (ISID), Singh expressed concern over "persisting regional imbalance" in industrial development and urbanization.
He also said credible policy solutions were required to bring new regions under industrialization process. "I am puzzled by the persisting regional imbalance in industrial development and urbanization in India," he said.
The Prime Minister also said he wondered whether labor laws were inhibiting the growth of new businesses. "If so, where and how? How do we create not just skilled jobs but unskilled ones to help agricultural workers make the transition to industry," he said.
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