The document discusses government monopoly in India. It provides examples of sectors that were historically government monopolies, such as railways, electricity, aviation, nuclear power, and telecommunications. It notes that government monopolies aimed to provide stable prices and public services but lacked competition, consumer choice, and hindered economic growth. While government monopolies were significant until economic reforms in 1991, liberalization has since allowed private sector participation in many industries.

1. Government Monopoly in
India
Presented by:
Mr. Shiva Teja(10041)
Mr. Naresh(10042)
Economics Project Presentation on

2. Monopoly:
 Market situation where there is only single seller of a commodity and
there are no close substitutes of that commodity.
 Characteristics of Monopoly
Single seller
No close substitute.
No entry of new firms
Profit in long run
Losses in short run
Price discrimination
Firm is a price maker

3. Government Monopoly
 Monopoly in which a Government agency or a Government
Corporation is the sole provider of a particular good or service.
 Government Monopoly types:
National
Regional
Local
Coercive Monopoly

4. Advantages of Government Monopoly
 Stability of prices.
 Public benefited.
 Source of revenue for Government.
 Price discrimination can be applied.
 Economic differences can be reduced.

5. Disadvantages of Government Monopoly
 Poor level of service.
 No consumer sovereignty.
 Lack of competition & proper care leads to lower quality.
 No consumer choice.
 Hinders the economic growth.

6. Government Monopoly in India
 Indian Government is the sole provider of some goods & services in the
country.
 No private organizations or firms should enter in those.
 State or Local Government bodies are the Monopolies in their
respective regions.

7. 1. Indian Railways
IR is the state-owned railway company of India.
One of the largest and busiest rail networks in the world.
Very recently, Indian govt allowed FDI to invest in railways.

8. 2. State Electricity Boards
 State Electricity Boards(SEBs), Licensed suppliers of Electricity operated by the state
governments.
 Consumers have no other alternatives, but the option of purchasing electrical
power from SEB’s / Single Licensees.

9. 3. Hindustan Aeronautics Limited
 An Indian PSU leaning on Domestic Monopoly in the production of
aircraft.
 Government allowed FDIs in 2011 to invest upto 26% in it.

10. 4. Nuclear power
 Main reasons are safety & risk, for the Government being monopolistic.
 It is being done through NPCIL.
 Corporate Giants Reliance, TATA have been forcing the Government for
liberalizing the Nuclear power production since a long time.

11. 5.
5.
• Tele communication White elephant of Indian Government.
• After 1991, its monopolistic identity has confined only to
Landline communication.

12. 6. Bus Transportation
 Though private travelling agencies competing with RTC, it is still the sole
transportation source for many rural areas.
 In those respective regions, it is still the Monopoly.

13. Government Granted Monopoly
 Form of Coercive monopoly.
 Government grants exclusive privilege to the private firms.
 Regulations will be made by the Govt in favor of firm for being
Monopolistic.
 Examples:
Copyrights
Patents
Contracts

14. History at a glance
 Government Monopoly had significance till 1991.
 India came out as a mixed economy after independence.
 The deep rooted Socialistic ideas made the Government act as
monopolistic in major economic issues.
 The country’s backwardness was also the main reason.
 At the end of 1980’s & early 1990’s economic crisis pinged the
nation.

15. History at a glance (contd.)
 The crisis became the main cause for the historical Economic reforms which
changed the face of the country’s economy.
 This was happened under the Govt of Dr. PV Narasimha rao, Prime Minister & Dr.
Manmohan Singh, Finance Minister.

16. History at a glance (contd.)
 The reforms stretched their welcome hands for the private firms to invest.
 The highlights of the Liberalization are:
 Private Couriers came into action.
 Private firms started their services in Telecom Sector.
 Buses of Private Travels came on the roads.
 Availability of Motor Vehicles increased

17. Why Government Monopoly failed in India?
 Government owned everything in the country.
 Only small & medium sectors were allowed for public.
 The intension was to provide service at a reasonable cost & also
employment.
 The leaders intended to take forward the nation with their socialistic
ideas.
 The process was slow because of the Direct Democratic System.
 Decision making became a tough task.
 The absence of economic policies & their perfect execution
dragged the economy into severe crisis.