State no match for Reliance

NEW DELHI: If the size and heft of any country’s economy is a measure of its global influence, it’s pretty much true of big companies within a country as well.

And if you needed more proof of big private sector corporates’ influence on India’s economy, you need not look further than their sales.

The biggest private sector company in India, Reliance Industries (RIL) is bigger than any state government in terms of revenues, yes much bigger than the richest state Maharashtra, which has total revenue receipts of Rs 50,429 crore compared with RIL’s net sales of Rs 81,211 crore as per the latest available figures.

In fact, the RIL group as a whole matches revenue generation in two of India’s biggest states, Maharashtra and UP, put together. The top five private Indian companies — RIL, Tata Motors, Tata Steel, L&T and ICICI Bank — are individually bigger than as many as 17 states, and this includes some big states such as Haryana, Orissa and Delhi.

Only seven big states pip Tata Motors, with even big ones such as Rajasthan, Madhya Pradesh, Bihar and Punjab being dwarfed by revenues of the country’s biggest automaker. The contrast is starker when top ten private sector companies’ sales is compared with the group of smaller states.

To give you a flavour, RIL’s revenues surpass the revenues of 15 Indian states at the bottom of the heap put together. Even the smallest company among the top ten, information technology major TCS boasts of revenues which is more than that of 14 Indian states.

The combined sales of India’s top ten companies (Rs 2,03,016 crore) is greater than state government revenues of the country’s top five states put together — Maharashtra, UP, AP, TN and Karnataka — which stands at Rs 1,94,543 crore.

The top five companies rake in annual revenues (Rs 1,45,499 crore) greater than the combined revenue receipts of all but the top ten Indian states (Rs 1,37,315 crore).

For companies, we have taken sales net of excise, and for states, total receipts include the state exchequer’s total tax plus non-tax revenues accruing from all sources including central government plan and non-plan grants.

Little wonder then, most of these business giants have the ability to influence government policies and push their agendas, especially in smaller states. The current race amongst few big states to sign on marquee corporate names for setting up special economic zones, big factories for manufacturing cars, steel, et al will only intensify further.