Which one of the following is an example of a ‘natural monopoly?

A natural monopoly occurs in industries where high fixed costs and significant economies of scale make it most efficient for a single provider to serve the entire market. Public utilities like water supply and electricity distribution are classic examples because duplicating the infrastructure (e.g., laying multiple sets of water pipes) is economically wasteful. The Delhi Jal Board, responsible for water supply and sewage in Delhi, fits this definition as it operates a network where competition is impractical. In contrast, Indian Airlines and the Delhi Transport Corporation operate in sectors (aviation and road transport) where multiple competitors can and do exist. While the Steel Authority of India (SAIL) was historically part of a government-reserved sector [1], the steel industry is not a natural monopoly as it allows for multiple private producers. Therefore, the Delhi Jal Board is the most accurate example of a natural monopoly among the given options.

Sources

1. [1] Indian Economy, Vivek Singh (7th ed. 2023-24) > Chapter 6: Indian Economy [1947 – 2014] > Industrial Policy Resolution (IPR) 1948 > p. 203