Business Groups in India

 A business group or group of companies is a collection of parent and subsidiary corporations that function as a single economic commodity through a common source of control. If the corporations are engaged in completely different businesses, the group is called a conglomerate.

Concept of Business Group

• Business groups are a prevailing economic force in India particularly and have been so historically.
• About 31 per cent of firms in India belong to business groups but this 31 per cent accounts for almost 59 per cent of total assets held by all firms in India. This highlights the economic importance of business groups in the Indian context and makes it compulsory to understand how they work.
• Business groups are an important part of a nation's thrift and a major contributor to the GDP of the country.
• The industrial strategy of many developing economies is identified by various business groups. They have been an important part of the economy ever since the emergence of industrial activity in the latter half of the nineteenth century. In India, 90 per cent of the businesses are family-owned
• They have played an important role in the development of the Indian economy by filling the gaps in sluggish markets and institutions.