In 1945, three of the richest families in Asian business were Indian?the Tatas, Birlas and Dalmias. Remember, this was a time when Bombay (as Mumbai was then known) and Calcutta (as Kolkata was then known) were world class cities. Seoul, Taipei, Jakarta, Kuala Lumpur and Bangkok were small towns. And then, we went through the long nightmare of what Rajaji called the ?permit-licence Raj?; when we were not allowed to get rich. Things have changed since Narasimha Rao?s government liberated Indians. We can create wealth?and guess what, we are not inferior to any other races or nationalities in this regard. A series of sensible finance ministers gradually undid the damage of TT Krishnamachari (of the 97% Income Tax and rapacious Wealth Tax fame!).
Indian businesspersons no longer have an incentive to stash money in Switzerland. Their heirs can inherit wealth in India without facing the wrath of the Estate Duty Department. People no longer suppress prices of shares where they have large holdings because they do not need to do so to lower their wealth tax dues. Hardly anyone wants to remit money to Switzerland. If anything, the rumour mill tells us that India?s rich are bringing their money back with a pit-stop in the enchanted isle of Mauritius.
Forbes and others of its ilk find it difficult to get hold of the books of Swiss banks. No wonder most of the ?rich? folks they track have wealth invested in the shares of publicly traded companies. As our laws have changed, as we have been allowed to create wealth, as we are no longer subject to expropriation if we report our wealth transparently, and as night follows day, Indians are making it to the Forbes list.
But we have the residual legacy of old times. Many of the Indian rich live outside India, which is a reminder that till not so long ago, to be rich and an Indian in India was almost impossible. Brain drain and talent drain were the inexorable results.
Any time people get wealthy, others get envious. And if the ?others? happen to be of the leftist persuasion and ensconced in cozy positions in academia and media, they are bound to get hysterical that the very existence of wealth is vulgar (simply because leftist academics don?t have it, I suppose!). It is useless to try to argue with them that the poor will not be better off by impoverishing the rich. They have no genuine interest in making the poor better off. Their interest lies in destroying the rich and successful. It is imperative that the current environment for wealth creation and for its transparent reporting not be undermined. Otherwise, we can postpone the emergence of all Indians from poverty to prosperity by another two generations.
Having said this, we as a society have two essential moral imperatives to contend with. The first is the imperative of ?free entry?. This implies that talented, hard-working and of-course lucky people must have the opportunity to get rich.
Wealth cannot and should not be seen as solely a matter of inheritance. If people can have legitimate aspirations to get rich, then that society ensures that creativity, initiative and enterprise flourish.
But if Blacks or Jews or Dalits or Adivasis, or for that matter any talented and diligent people feel that the dice are loaded against them, that situation is morally untenable and socially explosive. We must be eternally guarded against the temptation that the current rich and their political cronies may have to suppress the emergence of others into the portals of wealth. Free entry and fair access to markets for resources (including capital) are the foundations of successful and morally-informed market capitalism. The second imperative is to create an environment where human beings have not just a theoretical right to become wealthy, but the practical wherewithal to do so.
Access to quality education is the single most important element. If we want more Indians in the Forbes list 20 years from now, then as of today, we should get more Indians (in fact, all Indians) into good schools (not government schools where unionised teachers don?t turn up, but, for instance, schools that parents choose based on vouchers of choice that the state makes available to them). Health, infrastructure, good governance all matter?but if I were to choose just two items that are essential for us to continue to celebrate the fact that some Indians (not just Koreans or Taiwanese) are finally rich, an open society that can support positive upward aspiration for all and quality education that can translate this aspiration into a realistic option would have to be the two we pick.
The writer divides his time between Mumbai and Bangalore. These are his personal views