The Billionaire Raj: A Journey Through India's New Gilded Age

by James Crabtree

If you take billionaire wealth as a proportion of national output, the super-rich do best of all in Russia, whose powerful oligarchs are renowned for their lavish lifestyles and corrupt business dealings.8 But India now often ranks close behind, with a new super-rich business class sometimes jokingly dubbed the “Bollygarchs,” for their ability to bring together much the same mixture of industrial might and intimacy with power.

It was in the mid-2000s that the fortunes of India’s tycoons really began to change.

Pumped up by foreign money, domestic bank loans and a surging sense of self-belief, industrialists like Ambani dumped billions into projects from oil refineries to steel mills.

From 2004 to 2014 India enjoyed the fastest economic expansion in its history, averaging growth of more than eight percent a year.

The Indian subcontinent had been the planet’s largest economy for most of the last two millennia.9 Three centuries of colonial rule ruined that legacy, as the East India Company suppressed and plundered southern Asia.

Nearly half of all the freely traded shares on Indian stock markets are owned by foreigners.13

Its citizens remain instinctive internationalists, boasting the world’s largest diaspora population and sending home more than $60 billion in remittances each year.14

Indeed, globalization remains strikingly popular. More than four in five Indians currently view it positively, among the highest rates of any country, reflecting the sharp improvements in basic living conditions most of its people have experienced since reopening.15

This changed rapidly from the beginning of the 2000s, as wealth flowed first to an educated, globally connected elite. A newly prosperous class emerged in major cities, giving birth to “islands of California in a sea of sub-Saharan Africa,” in the words of economists Jean Drèze and Amartya Sen.17 The wealth accumulated at the very top was most eye-catching of all. In 2008, as the scale of India’s new billionaire fortunes became clear, economist Raghuram Rajan, the future head of India’s central bank, asked: “If Russia is an oligarchy, how long can we resist calling India one?”18

The rise of the super-rich then ties into a second issue: crony capitalism, meaning collusion between political and business elites to capture valuable public resources for themselves. India’s old system of central planning and state controls created fertile ground for graft, forcing citizens and businesses alike to pay myriad bribes for basic state services. Yet these problems of retail corruption were trivial compared to those that emerged during the go-go years of the 2000s. Scarce assets worth billions in sectors like telecoms and mining were gifted to big tycoons, in a series of scandals known as the “season of scams.”