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  • Category: Miscellaneous

    What is your opinion about Crony capitalism. To what extent should it be or not be?

    Hi, What is your opinion about crony capitalism. To what extent should it be or not be? Crony capitalism refers to the economy where businesses grow due to their good relationship between the ruling government. These businesses have many advantages over others due to closeness to the authority or government etc. They get easy loan sanctions and tenders. This will create their monopoly in market and it becomes more difficult to new business players to compete with them. In most countries Crony capitalism is very high. This might me one reason where rich getting more rich and poor becomes more poor. Don't you think this is has bad impact on economy also. Please extend your opinions on this Crony capitalism.
  • #721744
    This is not advisable. One should not use the advantage of getting loans and running their business. This reflects the partiality, shown by the government, on particular companies. The government should not indulge in such practices. The loans and other facilities should be extended to the companies based on the merits and demerits of the business and the management. Because of this, some managements will become strong and they will become rich. That will make rich people more rich and poor people poorer.
    Now the persons who are taking huge loans and they never repay the loans taken. So the lending banks will have more NPAs and will suffer. Ultimately some people who have some money in those banks suffer a lot. So one should not encourage such practices.

    always confident

  • #721753
    In my opinion the capitalist or rich businessmen should not get any favour from the Govt. They should only get the tax advantage or other facilities from the Govt as other small business houses are getting as applicable under the laws and roes of the country. Crony capitalism is a bad sign for the common people as the rich businessmen will grab all the wealth in their hands.
    Thoughts exchanged is knowledge gained.

  • #721754
    Crony capitalism can be defined as an economic system where friends and relatives of political leaders, government officials and business leaders are given unfair advantages. This system is based on a nexus between politicians and businesspersons who mutually benefit from lucrative contracts, sweetheart deals and loans on favourable terms from financial institutions.
    This is not a new system in the world. It has been existing for a long time around the world. It happens in those countries where the ruling party is extremely powerful and opposition parties become irrelevant. We have seen several countries which made their distribution of wealth in imbalance manner. Crony capitalism can be good to business class whereas the lower section of the society economically goes down and the gap between these two groups keeps on widening. Sometimes, it creates germs of revolt against the ruling class. The world has seen a revolution in several countries in past.

  • #721757
    It is the fact that the government and its major policies are weighed and controlled by the Big companies who have stake directly or Indirectly. Every political; party gets huge donation from different companies and feelers from the govt would be sent to them as to what favor they want in return so that a pay back scheme is created and the company gets benefited huge than what they financed to the parties. Most of the big business houses gets free lands, no tax, tax holidays, free power and infra developments are some of the largess which are freely granted. Are you seeing a trend that edible oil rates and pulses rates have increased because the oil manufacturers association and Dal manufacturers have to pay the donation for general election and the prelude has already been started with hiked prices.
    K Mohan @ Moga
    'Idhuvum Kadandhu Pogum "
    Even this challenging situation would ease

  • #721765
    It is one of the reasons that 10% of people holds 70% of nations total wealth. It also forces customers to pay for the services as they have no other way because of no competition exists.

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