By killing transparency and competition, crony capitalism is harmful to free enterprise, opportunity and economic growth. Crony capitalism, where rich and the influential are alleged to have received land and natural resources and various licences in return for payoffs to venal politicians, is now a major issue to be tackled. One of the greatest dangers to growth of developing economies like India is the middle-income trap where crony capitalism creates oligarchies that slow down the growth.

Correct Option (C)

The passage explicitly identifies crony capitalism as a significant impediment to free enterprise, competition, and economic growth, primarily due to its inherent lack of transparency and the resultant creation of oligarchies. It highlights that influential entities receive preferential access to resources and licenses through illicit means, undermining fair opportunity. Therefore, addressing these systemic issues requires enhanced transparency in government operations and measures to broaden economic participation, such as financial inclusion, to counter the concentration of power and wealth described.

Incorrect Options:

Option (A) is incorrect because the passage focuses on the structural economic distortions caused by crony capitalism, such as lack of transparency and competition, rather than the need for increased welfare schemes. While welfare programs address social needs, they do not directly resolve the issues of corruption and unfair resource allocation detailed in the passage.

Option (B) is incorrect because the passage advocates for transparency and fair competition in resource and license allocation, not for a policy of granting licenses specifically to the poor. The core problem identified is the mechanism of allocation (cronyism) and its impact on economic principles, not merely the socio-economic status of beneficiaries.

Option (D) is incorrect because the passage discusses the broad impact of crony capitalism on overall economic growth and opportunity. It does not provide any basis for comparing or prioritizing the manufacturing sector over the service sector as a solution to the problems described.