Why concentration of wealth is harmful to small businesses?

Why concentration of wealth is harmful to small businesses?

□ Most businesses fail in India because of low-purchasing power of the majority of the population  (majority being engaged in farming & allied sector earns very little & therefore spends only on the necessities).

□ Concentration of wealth is amassing of the wealth by few. These “few” are the consumers of high-end luxurious products & their spending on necessities is limited. Small businesses cannot deliver high-end products & services & hence the people with high purchasing power don’t become the customers of small businesses.

□ Concentration of wealth leads to erosion of money from middle & lower class to the upper-class i.e. in the process the wealthy few become even more wealthier. The distribution of wealth is asymmetric. Hence, the purchasing power of the middle & the lower class decreases further. It means they spend & consume less & this negatively affects the small businesses.

□ The model of development in most countries is Capitalist. In India (*a mixed economy), the Capitalist mode of development has led to widespread inequality & jobless growth. So, the purchasing power hasn’t increased dramatically among the majority. This will have severe consequences on the small businesses.

The future of the existence of small businesses lies in collaborating with big firms & MNCs.

With Great Love,

Er. Amit Yadav



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