The Role of Financial Conditions
Trends in corporate concentration in India’s non-financial sector, especially since 2015, are examined, using firm-level data from the Centre for Monitoring Indian Economy Prowess database. Changes in asset and income distribution across firms are reported, noting an overall decline in the public sector’s share and a steady increase in the share held by the top five private business groups on account of an increase in their share of total assets and total debt. This occurred during a period when many other firms reduced their leverage, particularly after the implementation of the Reserve Bank of India’s Asset Quality Review. Descriptive evidence is provided on changes in firm-level borrowing patterns and financial indicators, linking them with the differences in financial conditions across firms.
The authors are grateful to Sriram Mahadevan and Naveen Thomas for helpful comments and discussions.
Trends in corporate concentration in India’s non-financial sector, especially since 2015, are examined, using firm-level data from the Centre for Monitoring Indian Economy Prowess database. Changes in asset and income distribution across firms are reported, noting an overall decline in the public sector’s share and a steady increase in the share held by the top five private business groups on account of an increase in their share of total assets and total debt. This occurred during a period when many other firms reduced their leverage, particularly after the implementation of the Reserve Bank of India’s Asset Quality Review. Descriptive evidence is provided on changes in firm-level borrowing patterns and financial indicators, linking them with the differences in financial conditions across firms.
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