ABSTRACT
Rather early in the history of the analysis of the structural characteristics of Indian industry, it was established that the representative unit of capital in India’s large industrial sector was the ‘business group’ or the ‘business house’ (Dutt 1969; Ghose 1972; Hazari 1986). The defining feature of this unit was that, unlike the diversified, single conglomerate firm which was the industrial, decision-making unit in the West, the business group consisted of a large number of legally independent firms which functioned as a single entity according to the dictates of a single decision-making authority (Chandrasekhar 1999). This feature of the representative unit meant that the expansion of the business group, either into areas in which it already operated or into new industrial areas, was based primarily (though not exclusively) on the creation of new companies or the acquisition of existing companies which continued with their independent identity. Thus, even though merger of one or more companies into one entity, resulting in the loss of the identity of the acquired firm, was a phenomenon that occurred periodically during the first three decades of planned development, it was not the dominant form of growth for the business group.
