The Biggest corporate group of india  Reliance Industries Limited (RIL) is the biggest example of Crony Capitalism. The Group with  Equity of USD 40 Billion and Assets worth USD 85.90 Billion has been in public eyes for all the negative reasons since its first brick was laid. Dhiru Bhai Ambani , founder of the Reliance Empire himself started the crony capitalism in Reliance. Dhirubhai and his relations where exposed by media houses about illegal imports and botched attempt to acquire Larsen&Turbo.

http://www.countercurrents.org/varman050313.htm

RIL got the contract to extract natural gas for the Indian govt in early 2000. The cost of extraction was found out to be less than USD1/unit . RIL signed a contract with NTPC (Northwest Territories Power Corporation) for 17 years at a price of USD 2.3/unit. RIL used it political links and connections to hike up the selling price of the gas to  USD 4 /unit. RIL didn’t stop at that. 

In the year 2013-14 , RIL manipulated the extraction of gas to create an artificial shortage to blackmail the govt. RIL produced only 18% that year of the 80 Million units contract. This shortage led to import of natural gas and inflation in the always inflated indian economy.

In March 2014, RIL again used its political connections and passed a regulation to double the price of its gas to USD 8/unit. This amendment would have resulted in profit worth Rs 54000Crore ( USD 9 Billion ) per annum to RIL. RIL was opposed by a new political party AAM AADMI PARTY (AAP). RIL responded by saying that the prices where set according to international markets. This move was opposed by the political parties and media. RIL had to revert its amendment to USD 4/unit. 

NIKO Resources Ltd , Partner of RIL to extract natural gas , still continues to sell gas to Bangladesh at USD 2.34/unit. According to CAG (Comptroller and Auditor General of India)

RIL has received windfall gain of Rs 1.25Lakh Crore ( USD 20.6 Billion ) from the govt of India for its projects. 

RIL remains to be the biggest and one of the most corrupt business entities of INDIA

Reference – https://www.youtube.com/watch?v=NRWUmXDjO8U

The Comm 101 first lecture drove us through the impact of government intervention on business. Some still believe that government intervention is necessary. Roughly 9% of Comm 101 103 students thought that government should always interfere in business when they were asked “Should there be government interference in business for setting prices” . There were about 41% who argued that interference should depend on product while 9 students of the 52 voters voted that government should interfere only in weak market.

Picture Taken From – http://indianexpress.com/article/cities/delhi/delhi-government-can-now-raise-vat-to-30/

Government interference usually plays spoilsport for strong business monopolies in free market. Recently the newly elected state government of Delhi, India made an amendment that allowed it to hike the Value Added Tax (VAT) on several goods. The government can now hike VAT up to 30%. Tobacco and Petroleum related business got the worst welcome gift and most goods under the “To-Be-Hiked” category were from these industries.[1]

The Delhi government didn’t stop its massive rampage over business monopolies until it doubled the entertainment and luxury tax to 40%. This move by the finance department of Delhi State has resulted in fall in sale of luxurious goods and services in Delhi but a significant increase in revenue of Gurgaon, a city in the National Capital Region (NCR) of Delhi.  [2]

What I Personally believe from my readings and observation is that the big TOBACCO Corporates are putting a bad show in the business world by their constant lobbying of all major political party leaders and central government ministers to get new regulations to counter the Delhi Govt’s VAT policy as well as WHO’s policy of big statutory warning on cigarette packets. In a report of Times Now on TOBACCO LOBBYING , they actually raised questions on the ethical values of cigarette manufacturers , business firms and politicians when the cartel of so called candy-makers tried to reduce the statutory warning on the packet. [3]

The freshly Elected government of Delhi is going on its plan to bring down the cartel of Petroleum, Tobacco and Liquor Industry. This Government Intervention will turn out to be major hindrance for the big corporations that were accused of lobbying earlier this decade. These steps have gained the attention of economic and health experts all over the country as the main declared motive of the government is to discourage the use of liquor, tobacco, and other luxurious item related to these things.

[1] http://indianexpress.com/article/cities/delhi/delhi-government-can-now-raise-vat-to-30/)

[2] ( http://timesofindia.indiatimes.com/entertainment/hindi/bollywood/news/Entertainment-tax-doubled-in-Delhi-Delhis-loss-will-be-Gurgaons-gain/articleshow/47832617.cms )

[3]  http://www.timesnow.tv/Debate-Tobacco-kills-but-not-in-India/videoshow/4474595.cms