The Pluralism of Indian Business Enterprises : Mixed , Hybrid and everything else !
Author : Sunny Narang
Source : From LinkedIn Archives
Date first published : September 3rd , 2016
India is not a simple Public-Private sector dualism . India has so many types of business enterprises , with each sector or industry having its own unique realities .
For example in Milk we have MNC’s , Public, Big Private , Big Cooperative , Small Private and Coops , as well as the Doodhwallah .
In textiles we have Mills , Powerlooms , Handlooms , Khadi , Hosiery at all levels of scale, from a single family to thousands of employees in an integrated mill .
I am personally always curious how is data of the various sectors collected and by whom .
From MSME to PSU to Cooperatives to Informal sector , the number of state , private , Non-profit institutions taking out research and reports are many .
There is never in India , a dearth of opinions , but also there is no dearth of data.
All of us are so occupied within our silos of industry and occupation , and the complexity of Indian Enterprise pluralism is so much , that no one even attempts an understanding . As even the data , the non-reported is probably a higher percentage than the reported .
Look at the National Cooperative Union of India report of 2011–12.
According to them , even in the Organised sector , the employment in cooperatives in India , equals the Public Sector (That is Government employment at all levels ) at about 18 million each .
The private sector just about reaches 11 million !
And look at their reach in membership : almost 250 million .
The present day India is the leading incubator of more than 6 lakh cooperative societies constituting of 250 million members, covering more than 97% villages and 71% rural households.
These cooperatives in totality advance agricultural credit amounting to over 70 thousand crore rupees and making up around 19% of the institutional agricultural credit in the country.
And their share of Dairy and Sugar sectors : They produce almost 40% of the sugar in India . It has reduced from about 60% in 1994–95 , but remain a significant player .
In 2011–12, cooperative dairies put together procured an average 280 llpd of milk, whereas the organised private industry, covering those handling 50,000 litres and upwards, would have accounted for 350 llpd or more. That works out to a 55:45 ratio of private versus cooperative . India produced over 127 million tonnes (mt) of milk in 2011–12, as against 58 mt recorded for 1992–93.
In India the Cooperative sector has spread to education , construction labour , housing , fisheries , food and grain processing , credit and many many more.
The collective revenue of the world’s largest co-operative enterprises is about USD 1.6 trillion.
According to the ILO, Financial cooperatives serve over 857 million people — 13 per cent of the world population while agricultural cooperatives produce 50 per cent of global agriculture output.
So with 250 million in India alone , we have almost 30% of the cooperative members in the world !
The ILO estimates that almost a 100 million jobs are provided by cooperatives amounting to 20% more jobs than being created by the world multinational companies.
International Co-operative Alliance (2010), “Global300 Report 2010: The world’s major co-operatives and mutual businesses”, available from http://2012.coop/sites/default/files/attachments/Global300%20Report%202011.pdf
And the Public Sector remains highly powerful, and no political party can even attempt to privatize it without a huge backlash . At most they can put more equity in the share market .
The CPSU revenue is about Rs. 20 lac crores a year . And they are forming joint-ventures internationally and within India in the next growth phase .
The Centre announced plans in February , 2016 , to set up a mega 60 million tonnes per annum (mtpa) refinery on the west coast in two phases.
To be set up at a cost of Rs 1.5 lakh crore, this would be the world’s largest refinery complex. IOC, India’s largest refiner, is likely to take up 40 per cent stake in the project while BPCL and HPCL will take 20 per cent each.
India’s current refining capacity is 230 mtpa, including the just commissioned 15 mtpa IOC refinery at Paradip. The public sector accounts for 66 per cent (150 million tonnes or mt) of the total capacity while the private sector accounts for the rest 34 per cent or 80 MT.
The share of the private sector, including refineries by RIL and Essar Oil, in the total capacity has come down from 37 per cent two years ago.
RIL held the largest refining capacity with its 60 mt Jamnagar refinery complex until April 2015 when IOC pipped the private refiner by commissioning the 15 mtpa Paradip facility, taking IOC’s total capacity to 69 mt.
India is a net exporter of petroleum products.