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Nothing symbolises the power of India’s new elite more starkly than Antilia, the residential skyscraper Mukesh Ambani built for himself, his wife and their three children. Rising 160 metres in height, the steel and glass tower has a floor area roughly two thirds the size of the Palace of Versailles, although it stands on a plot of barely an acre.1 A grand hotel-style ballroom takes up most of the ground floor, fitted with twenty-five tonnes of imported chandeliers.2 Six storeys of parking house the family’s car collection, while a staff complement in the hundreds caters to their needs.
Together its members owned assets worth $479 billion in 2017.8 One level below them the country has 178,000 dollar millionaires.
China entered the World Trade Organization in 2001, kicking off one of the most remarkable expansions of any country in history.
It was in the mid-2000s that the fortunes of India’s tycoons really began to change. For all its drama, only a handful of
sectors took off in the decade after 1991, including generic pharmaceuticals and software outsourcing. Over that ten-year period India’s economy also barely grew faster than it had in the previous one. But in the early years of the new millennium the twin impact of liberalisation and hyper-globalisation became impossible to ignore. 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. Others rushed to build toll roads and power stations, or spent heavily on Airbuses and
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Just as importantly they began to reintegrate India with the rest of the world. The Indian subcontinent had been the planet’s largest economy for most of the last two millennia.11 Three centuries of colonial rule ruined that legacy, as the East India Company suppressed and plundered southern Asia.
In the late seventeenth century, when Britain controlled just a handful of coastal cities, India’s Mughal Empire presided over close to a quarter of global gross domestic product.
at four per cent when the last British troops left, not long after ...
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India is now a remarkably globalised nation once more. Rather than struggling to scrape together foreign exchange, it holds hundreds of billions of dollars in reserves. It is on some measures a more open economy than China, which began to liberalise roughly a decade earlier. India now trades more goods and services as a proportion of GDP than its larger Asian neighbour, and far more than America. The value of that trade has rocketed from just seventeen per cent of GDP when its economic reforms began 1991 to around sixty per cent today.
Its citizens remain instinctive internationalists, boasting the world’s largest diaspora population and sending home more than $60 billion in remittances each year.
The fear that India would reject the arrival of foreign companies and global investment, viewing them as akin to a new form of colonialism, has been handily disproved. Indeed, globalisation 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.
Rather than fearing the world, India has embraced it.
Yet for all their benefits, these decades of whirlwind growth have proved to be economically disruptive, socially bruising and environmentally destructive, leaving in their wake what novelist Rana Dasgupta has described as a sense of national ‘trauma’.18 Those benefits have also undeniably been shared unevenly, with the greatest portion of India’s new prosperity flowing to its top one per cent, or, more specifically, the top fraction of that one per cent.
Prior to Independence the country was subjugated by imperial administrators, as well as myriad maharajas and the feudal monarchies they led. Yet in the decades after 1947 it at least grew economically more equal, with an elite that lived modestly by the standards of the industrialised West.
India remains a poor country. The average citizen earns less than $2,000 a year. To be counted among its richest one per cent required assets of just $32,892, according to research from investment bank Credit Suisse in 2016.21 But that same one per cent now owns more than half of national wealth, one of the highest rates in the world.
The International Monetary Fund (IMF) suggests that India, alongside China, now ranks as Asia’s most unequal major economy. Thomas Piketty, the French economist famous for his work on global inequality, has shown the share of Indian national income taken by the top one per cent of income earners to be at its highest level since tax records began in 1922.
Recent IMF research has challenged the consensus that inequality does little economic harm, showing that unequal nations tend to grow more slowly and be more prone to financial instability.
There is also every reason to believe that, without intervention, the gap between India’s rich and the rest will keep widening.
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, for...
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alike to pay myriad bribes for basic s...
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Politics in the world’s largest democracy no longer comes cheaply. One estimate suggested that India’s last election, in 2014, cost close to $5 billion.24 The contest was won handily by the Hindu nationalist Bharatiya Janata Party of current Prime Minister Narendra Modi, in large part because Modi managed to tap public anger about corruption, promising both economic renewal and an end to graft.
But the more obvious parallel is with America, and the era that ran from the end of the Civil War in 1865 to the turn of the twentieth century: the Gilded Age, or the era of ‘the great corporation, the crass plutocrat [and] the calculating political boss’, as one historian put
Mid-nineteenth-century America viewed itself as a rural, egalitarian idyll: a nation of yeoman farmers governed by gentleman politicians.
Industrial centres like Chicago and Pittsburgh absorbed millions who left their land and millions more immigrating from Europe.
What had been a nation of isolated smallholders turned into a giant continental economy and the world’s leading industrial power.
In 2013 its GDP per capita, adjusted for the cost of living, was $5,200. The US hit that same level at the height of the Gilded Age in 1881.31 Whatever happens, India is set to grow in economic might
and political power for the remainder of the twenty-first century, as America did during the nineteenth.
By mid-century more than 400 million Indians will have moved from villages to cities, in one of the largest ever human migrations, while New Delhi and Mumbai are projected to become the world’s two largest cities, with fifty million residents apiece.33 Today, India’s $2.3 trillion economy is slightly smaller than Britain’s.34 Barring something unforeseen it will surpass America in size by mid-century, and then, perhaps, China too.
The decades that followed America’s Gilded Age were known as the Progressive Era. This era had a lasting and positive effect, both at home and abroad. Anti-corruption campaigns cleaned up politics. Monopolies were broken up. The middle classes exerted control over government.
For those who knew the Ambani clan the building carried still deeper symbolism. Dhirubhai Ambani passed on without leaving a will, assuming that his sons – Mukesh, then forty-five, and Anil, two years his junior – would go on to control Reliance together. The pair had contrasting reputations: the elder unflashy, introverted and well organised; the younger a flamboyant financial wizard. They worked together amicably enough under the old man’s gaze. But relations soured quickly without him, and a ferocious battle for control began. Over three acrimonious years their feud gripped India, playing
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The old commercial elite were English-speaking and cosmopolitan, with accents polished at foreign schools and family fortunes dating back to imperial times. For them, liberalisation had been at once thrilling and unnerving: a font of opportunities but also a source of raw new competitors muscling their way in from unfamiliar parts of India, of whom the Ambanis were merely the most
forceful. Thousands thronged the streets when Dhirubhai Ambani died in 2002, a sign of the affection with which he was held by shareholders and ordinary citizens.
In India, unlike in the West, wealthy neighbourhoods tend to have lower voter turnouts while poor areas stream to the polls, in the hope that loyalty to some local politician or other might improve their lot.
Speaking in 1916, Mohandas Gandhi warned that India faced a pernicious new kind of commercialism. ‘Western nations are groaning today under the heel of the monster god materialism,’ he told students at a college in the heartland state of Uttar Pradesh. ‘Many of our countrymen say that we will gain American wealth, but avoid its methods. I venture to suggest that such an attempt, if it were made, is foredoomed to failure.’27 Gandhi’s views were rooted in his own era, chiming with the theories of anti-colonialism and non-violent protest that earned him the title ‘Mahatma’, or ‘great soul’ in
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to get the money to do this, as well as to fund election campaigns,
In the early stages of America’s Gilded Age, as in India’s, an alliance grew up between tycoons and politicians, with the former funding patronage controlled by the latter. ‘Obviously, to do some of this, some of these guys need resources,’ he told me. ‘And where do you get resources from? You get resources from business.’
‘It’s sort of an unholy nexus,’ Rajan said of India’s situation. ‘Poor public services? Politician fills the gap; politician gets the resources from the businessman; politician gets re-elected by the electorate for whom he’s filling the gap; and electorate turns a blind eye to the deals done with the businessman.’
Although Sonia Gandhi chose not to be prime minister herself, handing the role to Manmohan Singh, she was understood to control his government behind the scenes, making her in effect the fourth member of the dynasty to rule India since 1947. (The Gandhi family are not related to Mohandas Gandhi.) At
More than anything it was public disgust at corruption that lay behind Narendra Modi’s electrifying election victory in 2014.
Voters turned to Modi, the self-described son of a poor tea seller, hoping that his record of clean governance and rapid economic growth when he was chief minister of his home state of Gujarat could be transferred to New Delhi. For decades Indian voters had grudgingly tolerated venality among their politicians. But now the sheer scale of the kind of cronyism Rajan described had pushed the public to breaking point.
few analysts thought he was likely to make back its estimated $31 billion in costs.40 ‘It is madness, complete madness, what this guy is trying to do,’ the head of another telecoms group told me back in 2015, as the momentous scale of Ambani’s plans began gradually to leak out.41 Ambani himself talked about his aims in plainer language, promising a service at a price that ordinary Indians could afford. Indeed, when it did finally launch later that year, he offered it for free, beginning a violent price war with rival operators, who accused him of unfairly cross-subsidising the new business
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The licence had been won at auction initially by a tiny and previously little-known outfit called Infotel Broadband, which bid $2 billion, despite the company itself being worth just a fraction of that amount. Reliance then bought Infotel soon after the announcement of its auction success. Ambani’s company denied wrongdoing, but the auditors still raised questions about the process.45
Reliance denied wrongdoing on this issue too, but that did not stop its owner facing further attacks during the 2014 election, as anti-corruption campaigners painted Ambani as the unacceptable face of Indian cronyism. Modi’s election proved no less complicated for the tycoon, as the new prime minister, fearful of accusations of favouritism, cut out much of the kind of insider access enjoyed by senior industrialists.
But Jio’s ambition posed a more profound question, namely: what was the point of being a tycoon if not to take just the kinds of wild risks that would intimidate more conventionally minded businesses – and perhaps, in the process, bring seismic change to industries or countries?
invited similar questions more than a century earlier, as they built the canals and railroads and steamships through which America grew. In their own eras all were pilloried as corrupt and avaricious. Over time, all have gradually been rehabilitated as masters of new technology and pioneers of industrial change rather than robber barons – the embodiment of what economist Joseph Schumpeter would later call ‘the perennial gale of creative destruction’.55 In time Ambani and his fellow Bollygarchs may come to be viewed in this way too, as the details of their methods fade but the scale of their
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‘People just don’t understand that for him this has to work. This is the big roll of the dice,’ one adviser who worked closely with Reliance told me, not long before Jio’s launch. ‘So you almost have to expect him to behave irrationally, to spend any kind of money. Because he can’t afford to lose.’
Some thought the elder Ambani a relic from an earlier era, and predicted his decline, as happened to America’s Gilded Age tycoons before him. Yet Ambani seemed determined to fight this very possibility, from the Pharaonic scale of his investments to the over-the-top grandeur of his family home. No one embodied so clearly the power of India’s new super-rich. And looking down from Antilia’s roof terrace – his own ‘pinnacle of moneyed magnificence’ – no one else could grasp quite how far there was to fall.
As new prime minister Manmohan Singh settled into office, India’s circumstances looked promising. The
economy purred along at around nine per cent growth per year, an unheard-of level in a country that had long endured what was mockingly called the ‘Hindu rate of growth’ – in the low single digits prior to liberalisation in 1991.
