Tracing the stories of India’s billionaires, often termed the ‘Bollygarchs’, in his book, The Billionaire Raj, James Crabtree talks with Sunday FE about the inequality of wealth in India, crony capitalism and the challenges facing the nation as it aspires to be an economic superpower.
Your book talks of India’s new gilded age, yet you acknowledge that India’s growth is unsustainable, as even becoming a middle-income country remains a dream, more so in absence of the right political push. Is ‘gilded age’ a misnomer then? My book is optimistic about India’s future, even though I argue that the country is going through a stage I call ‘the Billionaire Raj’. My argument is that there are three fault lines that mark this stage, which include the inequality that has come along with the rise of India’s new super-rich, and also problems of crony capitalism.
I make an analogy with the US gilded age in the late 19th century simply to note that other countries have been through similar periods, including many in Asia, over the last half-century. I see no reason why India, with appropriate reforms, cannot do the same—although my argument is that this, of course, will not happen by accident, and thus radical reforms are needed, as they are in any country. As far as I am aware, I do not argue that India’s growth is unsustainable, and with appropriate reforms, high and stable growth in India should be perfectly possible.
You have skipped India’s start-up generation and the IT sector in your book. Don’t you think they are significant enough?
Any book has to have a focus. Mine was India’s new super-rich and various related problems that have come with their rise, as well as issues of corruption and cronyism in business and politics. For instance, I look in detail at the third fault line I identify in The Billionaire Raj, namely the boom and bust cycle in India’s industrial economy, and the problems of debt and bad loans that came with it. I covered the IT sector as a journalist, and I know it well. I am a big admirer of India’s tech entrepreneurs and they are a source of optimism for the country’s future. In fact, I do mention the sector at various points, for instance, in the discussion in the conclusion of the book about the various broad sectors of India’s economy. But in the end, I had to pick the areas I wanted to go into in detail. I equally don’t give much time to companies like Tata and Birla, even though these are hugely significant.
The emphasis on Narendra Modi is strong, but mention of previous governments and economic liberalisation is fleeting. Why?
Again, you can’t put in everything. I wanted to write a book that wasn’t simply a tour d’horizon of everything that had ever happened in India. I don’t go into details of many crucial elements of India’s history, given that so many other books have done that. My experience was rooted in a particular time and place—I lived in Mumbai at a particular period in India’s history, and I met your country’s corporate titans as they grappled with things happening then, and, indeed, now. So instead of rehashing debates of the past, I focused on what matters now—questions like ‘how exactly has India become just about the world’s most unequal country in terms of wealth, and is that a problem’? I think it is.
The solutions you provide for India are a little too utopian. Do you frankly think India can pull them off?
I don’t offer a detailed set of answers, but the broad direction I sketch out seems quite reasonable. India needs to combat inequality, manage and reduce corruption, develop a new model for industrial investment and improve capacity. Clearly, there are a range of other crucial steps, from investment in basic health and education to improving the capacity of export-focused manufacturing. But lots of other countries have managed this. With sensible reforms, I don’t think it’s utopian to think India might be able to do the same.
You acknowledge that Modi is temporary. What alternatives do you see in Indian politics in the coming years?
All leaders are temporary, so I am only saying what is obvious. Yet Modi is the dominant figure of the age. I think India needs to think deeply about what post-Modi politics will look like. This might happen after 2019, although the odds are that Modi will return. I am not confident that a second-term Modi government will be more economically radical than the first. Once an oddly cautious administrator, always a cautious administrator. I think India’s politics is fluid. The most likely outcome after Modi is a return to fragmentation. I don’t rule out a Congress return under Rahul (Gandhi). People used to mock Canada’s Justin Trudeau a decade ago, and the two men at that time shared much in common. At present, though, there is little sign of his being able to win mass support.