Acharya urges detariffing, break-up of conglomerates

Former RBI deputy Governor Viral Acharya advocates for reducing tariffs, dismantling conglomerates, and promoting competition in India's economy.

Former RBI deputy Governor Viral Acharya on Monday called for reduction of tariffs and dismantling of conglomerates even as he urged the government to refrain from protectionist policies to allow competition so that “Indian tigers” could emerge as global players and Indian consumers could get products at competitive prices.

Mr. Acharya suggested the graceful reduction of concentration (of businesses and wealth) in the hands of big conglomerates, which were benefiting from the tariff barriers and making super profits by not investing to meet global competition.

“India should shake up large conglomerates and unleash competition by allowing overseas companies to invest in domestic manufacturing,” he said, adding tariff protection had stifled innovation.

Mr. Acharya, a CV Starr Professor of Economics at New York University Stern School of Business, was addressing an event organised by Elera Capital in Mumbai.

“The protection given to the Indian corporates by way of high tariff has stifled innovation in manufacturing and incompetency survive hurting the consumers interest,” he said.

Stressing on de-tariffing in India Dr Acharya said trade barriers in India were one of the highest and ranks fourth behind Egypt, Sudan and Venezuela. He said India with average tariff of 20 which has gone up from 17% in the last few years, should be at par with China and Korea to allow its companies to be global players. 

“Indian corporates are on a cozy position where they do not have to innovate or create a global brand as they are comfortable making good profit by tapping into the domestic markets under a well-protected business environment, he said.