There are few signs of a cooling off in the bitter corporate battle between the estranged Ambani brothers. On the contrary, tempers have been further raised with a series of front-page advertisements placed by the Anil Ambani group in several newspapers, including Mint. The Supreme Court is due to start hearing the case on 1 September.
Selective leaks and discreet lobbying make it hard to judge which side has a better legal case, especially since the family agreement that is so important to this case is still not in the public domain. But what is certain is that this battle between two ambitious brothers is important for the nation on two counts.
Illustration: Jayachandran / Mint
One, the rich gas reserves in the Krishna-Godavari basin can be a game changer for the Indian economy as a whole. Two, endemic shortages of fertilizers and electricity could diminish if the natural gas being pumped out by the Mukesh Ambani group is used judiciously. Hence, the view that the brothers should take their battle elsewhere rather than bother us is way off the mark.
But there is also a larger issue involved here. The Ambani dispute has led to legitimate fears that business oligarchies and politicians with vested interests are distorting national policies. India does not as yet have robber baron capitalism, nor is inequality here measured by the Gini coefficient as acute as it is in Latin America and the former Soviet Union. But the growing power of cartels and powerful business groups is evident.
A report prepared by the Emerging Markets Forum for the Asian Development Bank said: “… there is a risk that India will evolve to a condition of oligarchic capitalism, in which the market and political power of major corporations will become a drag on long-term growth and a source of distortion in policy design”.
A top Competition Commission of India (CCI) official told PTI on Wednesday that the watchdog has not taken a close look at the Ambani gas dispute because the government has not asked it to.
There are two issues here. Why the government has not asked? And why should CCI wait for the government to ask? That’s not how competition regulators work in other countries.
The apex court will tell us whether Anil Ambani has the legal right to buy natural gas at around half the price paid by most other gas users. But there are still the allegations of market power and monopoly profits—something CCI should study closely.
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