Our Gilded Age (India version)

James Crabtree’s The Billionaire Raj is a page turner – really informative and well written (as one would expect from the FT’s former Mumbai bureau chief), full of surprises, and above all a fascinating window on India’s super-wealthy. The theme of the book is corruption, and its co-evolution with the Indian economy as the ‘licence raj’ restrictions were progressively removed, and new sectors like telecoms grew dramatically. In this new world, the super-wealthy businessmen and the politicians found they needed each other: the deployment of legislation and contracts helped the former, the opportunity to take part in business helped the latter. As one of the interviewees puts it: “They [the politicians] are saying: ‘We don’t want briefcases full of cash and Swiss bank accounts and all that any more. We want to own businesses ourselves. We want equity stakes.”

The scandals covered in the book – from airlines to cricket – are extraordinary, as are the descriptions of wealth flaunted. It is somewhat cheering to know that some scandals resulted in at least disgrace and sometimes arrest. There are also some thoughtful reflections on whether the practices described are always entirely bad: might they in some phases of development ensure that infrastructure gets built? One example in the book is a half-built steel mill and power station complex, halted by the cancellation of coal mining licences  due to allegations of corruption. Crabtree writes: “Watching him [Naveen Jindal], I was struck by the stress of his position: the billions in loans, the half-finished projects and the thousands of workers who …expected him to find a way to fix them.” The downside of doing business by politica favours is the unpredictability of it all.

There is something of this flavour in David Pilling’s Lunch with the FT with Nigeria’s Aliko Dangote, who recounts how he got his big break:

‘“Obasanjo called me very early in the morning and said, ‘Can we meet today?’ ” says Dangote, recalling the presidential summons. He wanted to know why Nigeria couldn’t produce cement, instead importing it by the boatload. Dangote told him it was more profitable to trade than to produce. Only if imports were restricted would it be worthwhile. Obasanjo agreed. Dangote has never looked back.’

Crabtree also cites Katherine Boo’s book Behind the Beautiful Forevers, (reviewed on this blog), which describes corruption at the bottom of the income scale. Although this clearly acts as a tax on low incomes, she has sympathy for those who earn so little that they can’t afford not to demand bribes.

I ended up not sure whether to be optimistic about India’s dynamism and scale, seeing this Gilded Age as growing pains, or pessimistic because of the debt mountain involved, and the nationalist politics of the present government – the chapters on Narendra Modi do not leave the reader reassured. Either way, this book opens a window on an extraordinary period of change in India, a country too big and important for its future not to affect all of us.

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Here is the author being interviewed about the book on NPR.

One thought on “Our Gilded Age (India version)

  1. The Mughal Empire collapsed. The British Empire collapsed. When will the Nationalist Empire of India collapse? Coming soon to the financial markets?

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