Obscene display of wealth?
Aditya Chakrabortty in Mumbai
Fri 28 Nov 2014 07.17 GMT
In Christmas 2007, I found a nightclub in London selling the most expensive cocktail in the world. I was reporting a piece on the gulf between the super-rich and the rest of society – and here was a liquid metaphor.
Hand the barman at Movida £35,000 and he would mix up a a shot of Louis XII cognac, some Cristal Rose, a few flakes of edible gold leaf and at the bottom of the glass a diamond ring. During both mixing and drinking two security guards would keep watch.
Running around Mumbai for the past few days has sometimes felt like travelling back in time to that credit-crunch Christmas. Not because I think a banking crash is just around the corner, but because of the size of that gulf between those right at the top of this city and everyone else.
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On Thursday afternoon, an events organiser for Mumbai’s wealthiest told me stories of children’s birthday parties in which a Bollywood celebrity was hired at huge expense to sing and dance – for a group of eight-year-olds. Of crores of rupees (hundreds of thousands of pounds) being spent on wedding dancers alone. She herself would rank among the city’s elite. For her two-year-old’s birthday, a swimming trip and family lunch was planned and yet friends would ask, “Aren’t you doing anything to celebrate?”
As India’s commercial capital, Mumbai has long been home to some of the richest people on the subcontinent. But in all my travels back and forth to India, I’ve noticed across big cities over the past decade or so a much greater willingness by the wealthy to show off. In Mumbai, that has reached extremes. On our first day here, the cabbie showed us Nariman Point, the Hanging Gardens, the Taj and the Gateway of India – then drove us over to Antilia, reportedly the most expensive home in the world. Owned by Mukesh Ambani, it is worth an estimated $1bn, is 27-storeys high and has three helipads.
However extreme, Antilia is hardly anomalous. A half hour away from where I am writing this, a new residential estate is up for sale, offering seaview flats alongside access to private jets and yachts. The black and gold billboards read: For Kings. For Queens. For Royalty.
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The bit of this that really reminds me of London before The Fall is the way those enjoying this lifestyle assume that everyone else is getting a bit of it, too. I am thinking here of the property developer who is now in New York for five days’ shopping – his second trip there in two months. Just before he left, he told me that he regularly took 10 holidays a year – but then went on to talk about how his cook had also been to South Africa. Except, it turned out, his servant had gone there for work.
In the 90s, as the second great wave of globalisation got under way, policymakers thought they knew who the winners and losers would be. On the debit side were the blue-collar and manufacturing-workers of the west, whose jobs were going to move east. But that was all worth it, we were assured, as long as people in developing countries got richer. But what a visit to Mumbai shows you is the vast inequality in how those riches have been spread around. You see it in the physical infrastructure: all those new flyovers sprouting up around the city to enable the chauffeur driven classes to get about more easily, even while the commuter trains are still bursting; the crowded, chaotic public hospitals that get by while gleaming new private hospitals open up.
Unlike in Britain or America, the middle classes in urban India are still far better off than they were 10-15 years ago. But in Mumbai, you see how they also struggle to pay for their English-medium schools and non-government doctors. I am thinking here of a family I met last night who were adamant that that they were middle class and yet were also open about how much they were struggling to afford even the basics for their children.
At the end of our chat, the party planner began angsting out loud about what kind of society Mumbai was becoming. “At the top, we’re creating a generation of brats. If they have iPads and birthday extravaganzas now, what will they demand when they’re teens? And at the bottom, can you imagine how much resentment they must be carrying?”
Billionaire convoy - obscene display of wealth in third world India
The Ambani family, India's richest and one of the movers and shakers in the world (owner of world's largest oil refinery which supplies Iran and Kenya with 10% of its gasoline + diesel imports) live like Monarchs in a country where the per capita income is $6000.
The same city this video was taken in (Mumbai) is also home to the world's largest slum Dharavi.
There is a huge water crisis in the city, and the poorest even use the beach as a bathroom. Everywhere filth and the stench of families in desperate situations are stark, yet, the 1% like Ambani have never had it better.
So powerful he is, in a Wall Street Journal article it was reported that the British Petroleum CEO asked Mukesh Ambani (the father of the guy in the Rolls Royce) whether he could use his sway and muscle in politics to help milk India of its new found oil reserves with favorable terms for BP and Mr.Ambani's firm.
The second half of the video is at the entrance of his house Antilia, which is reported to cost $1 billion. Ambani is known to be corrupt - when independent oil ministers asked his firm about his firm's shady pricing - the oil minister was fired in a matter of days.
Shocking details . . .
In case you missed it, Gali Janardhan Reddy’s daughter’s wedding has been in the news for some time now. Gali Janardhan Reddy is a former politician and a Karnataka-based mining baron who hosted what is, arguably, the biggest, fattest, grandest and the most expensive wedding of 2016. The bride was his only daughter Brahmani, who tied the knot with Rajiv Reddy, son of the Hyderabad-based businessman, Vikram Deva Reddy. The wedding took place in the Bengaluru Palace Grounds on 16th November and the entire venue was made to resemble the ruins of Hampi, the great capital of the Vijaynagar Empire. So you had sections of the ground that had replicas of King Krishnadevaraya’s palace, Lotus Mahal, Mahanavami Dibba and the Vijaya Vittala Temple among other buildings.
Gali Janardhan Reddy’s daughter’s wedding had been making the news long before it actually took place. The invite, which went out months before the wedding, reportedly cost Rs 5 crore. It had an LCD screen which played a choreographed song starring the family. It also included a silver Ganesha idol. The wedding itself was touted to be a whopping Rs 500-crore affair with 50,000 guests that included politicians, celebrities and movie stars. A blatant display of grandeur, each element of this wedding garnered crazy attention. The bride, 21-year-old Brahmani, donned exclusive bridal fineries that comprised designer sarees, lehenga and, of course, diamond jewelry.
At a time when the country has been reeling under the demonetization crisis, what with the 1,000- and 500-rupee notes being banned, Gali Janardhan Reddy’s daughter’s wedding stood out (some may say like a sore thumb). Even so, we couldn’t help but be in complete and utter awe (and a tad bit jealous) of Brahmani, the lucky bride who looked resplendent not just on her wedding day but also during all the rituals that preceded it.
For the engagement ceremony, Brahmani donned a rich gold muted Kanjeevaram saree that she accessorized with a diamond necklace, kamarpatta, maang tika, bangles,and jhumkas. The estimate of this jewelry was rumored to be around Rs 70 crore. The couple looked so cute in their almost matching ensembles, don’t you think?
For the Sangeet, Brahmani donned a golden embellished Neeta Lulla lehenga that bore floral motifs inspired by the Vrindavan Gardens and accessorized it with an opulent diamond choker necklace. The curls fawning her petite face elegantly perfect her bridal ensemble. Whilst the bride glowed, the groom choose a muted green shade of kurta with black salwar.
BENGALURU: Demonetisation may have sucked the cash out of the economy but did nothing to dim the lights of the big fat wedding of the season, the betrothal of the daughter of Gali Janardhan Reddy, former Karnataka minister and mining baron accused of multiple scams.
The pre-nuptial bash at the Palace Grounds here had much to pop eyes at but also to note the incongruity: huge sets capturing the grandeur of the Vijayanagar empire competed for attention with the recreated rusticity of a village, just as samba dancers from Brazil jostled with Kathakali artistes from Kerala. Among the lesser lights of the day was a paan counter, said to have cost a mere Rs 25 lakh to set up, handed out Janardhan Reddy's favourite Gulzar pan from Ballari.
The irony of this wedding bang amidst the current crackdown against the poor Rs 500 note could not have been lost. And to complete the irony, the pantheon of the BJP, state party president B S Yeddyurappa and former chief ministers Jagadish Shettar and DV Sadananda Gowda, attended the fuction, after having raised talk that they would stay away.
Sources privy to the arrangements estimated that Janardhan Reddy, who is facing multiple charges of illegal mining of iron ore, is spending around Rs 150 crore on the wedding tomorrow. However, a complaint lodged with the Income Tax Department estimated the figure to be around Rs 650 crore.
There were 180 bouncers to mind the show, and the menu was vegetarian with a lot of variety – south, north, east and west.
The celebrations started Tuesday night with a procession of dancers from India and abroad and foreigners in traditional attire welcoming guests. Stars and singers like Yash, Arun Sagar, Anushree, Haripriya, Shankar-Mahadevan, K S Chitra and Vijay Prakash entertained the audience.
UPDATE
It was a big, fat Indian wedding to beat them all.
Mining magnate and former politician Gali Janardhana Reddy had invited 50,000 of his dearest friends to Bangalore Palace for the five-day marriage feast of his 21-year-old daughter Brahmani in 2016.
Film-set designers transformed 36 acres of the expansive palace grounds into a perfect replica of the temples and palaces of Hampi, the medieval capital of the Vijayanagara Empire. Costumed actors wandered about to add authenticity. Animatronic elephants guarded the outer gates. Drummers, musicians and dancers, including a troupe flown in from Brazil, paraded and performed.
The bride wore a blood-red couture wedding sari rumored to have cost $3 million. Strand upon strand of dazzling diamonds — $16 million worth — encircled her neck, waist, wrists and head.
The tented dining hall, seating hundreds at a time, served up dishes from all across the subcontinent on banana leaves. The cavernous space could barely handle the crush; dozens of guests pressed behind each diner’s seat, impatiently waiting their turn. A phalanx of 3,000 security guards struggled to keep order.
“It seemed to be a Niagara Falls of spending,” one guest said.
At an estimated $85 million, the Reddy wedding would have been over-the-top under any circumstances.
But the celebration began two days after populist Prime Minister Narendra Modi brought India’s cash-based economy to near collapse with a sudden “demonetization” program. Overnight, 85 percent of the nation’s currency was deemed illegal.
What was meant as an anti-graft measure targeted at gangsters and bribe-taking civil servants caused chaos as 1.2 billion Indians found their hoarded funds to be worthless.
The timing for an extravagant wedding couldn’t have been worse, but Reddy still went ahead with the event and spared no expense.
The media had a field day. Reddy “impelled public outrage at a time when so many are struggling to find the cash to buy food,” New Delhi Television reported. “A sheer obscene display of wealth,” railed a rival politician.
As one of the nation’s “Bollygarchs,” Reddy was an extreme example of how massive wealth had become increasingly concentrated in the hands of the few, as India boomed in the era of hyperglobalization. In 2017, the country boasted more than 100 billionaires, fewer only than the United States, Russia and China. Meanwhile, the average Indian earned less than $2,000 a year — making the wealth gap between the nation’s top 1 percent and the rest of its people one of the most lopsided on earth.
James Crabtree traces the resulting tensions in “The Billionaire Raj” (Tim Duggan Books), out Tuesday, with profiles of the high-flying tycoons who flaunt their extreme wealth right in front of the world’s poorest.
The divide between rich and poor is most stark in Mumbai, India’s financial capital, where 22 million people crowd a narrow peninsula. Nine million live in shanty filled slums like the infamous Dharavi, Asia’s largest and densest ghetto, with a staggering 700,000 humans per square mile.
Meanwhile, just five people reside in a 525-foot single-family skyscraper that surveys the teeming city like an aerial fortress. The modernist, cantilevered tower — called Antilia — is the billion-dollar home of Mukesh Ambani, India’s richest man. His $40 billion fortune places him at No. 19 on Forbes Magazine’s wealthiest people list.
“Money means nothing to me,” he said in 2017. “My father used to tell me, ‘All of us eat the same dal-roti.’ ”
Ambani, whose sprawling business empire includes petroleum, energy, retail and telecom ventures, completed the extravagant glass-and-steel residence in 2010. Its upper floors, draped with lush hanging gardens, contain apartments for his wife and himself, along with their three 20-something children. Their private floors offer sweeping views of the Arabian Sea less than a mile away.
Six floors of garages house the family’s massive car collection, which includes a Rolls-Royce Phantom, an Aston Martin Rapide, an armored BMW 760i, and a Maybach 62. There’s a separate floor where staff mechanics keep the vehicles in top shape.
Family members can get a workout in the building’s two floors of gyms, with a yoga studio, pool, basketball court, basement soccer field — and an “ice room,” where artificial snow flurries stave off the tropical heat.
The ground floor contains a grand ballroom where Ambani hosts company functions, charity balls and weddings for favorite relatives. “It’s all very bling,” one guest reported. “Lots of chandeliers. The chandeliers have chandeliers.” A single month’s energy bill in 2010 came to $109,000, an enterprising reporter found — jaw-dropping in a country where hundreds of millions live with no electricity at all.
This temple of wealth hasn’t gone unnoticed by the hoi polloi. “The amount of rage at Antilia has to be heard to be believed,” one local anti-corruption activist said. That might explain Ambani’s bulletproof BMW.
Ambani, who rarely engages with the press, has not commented on the backlash, but his wife Nita shrugged it off. “There have been exaggerated reports in the media about it, I must say,” she said in 2012.
Just as an industrializing America produced a crop of Gilded Age robber barons in the late 19th century, post-socialist India gave rise to the Bollygarchs at the end of the 20th.
Reformers launched a deregulation program in 1991 to undo the post-independence “License Raj,” when the government granted licenses allowing businesses to operate. Mukesh Ambani’s father founded the family empire on his ability to work the bureaucrats under this “crony socialism.”
The system that took its place soon after became a type of crony capitalism, as politicians and industrialists divvied up assets like mining and telecom rights. Many businessmen, like Reddy, took political side gigs as state ministers or members of Parliament to gain even more control. India’s billionaire explosion began.
“Your skill set was managing the government in those days,” fabric billionaire Gautam Hari Singhania says.
The giveaways and bribes began coming to light in 2010, in what became known as the “season of scams.” Years of investigations and prosecutions stoked a simmering anti-government fury that erupted in the 2014 election of Modi — a populist backlash that presaged the Brexit vote and the election of Donald Trump.
Some of the Bollygarchs’ garish projects were too far along to be stopped. Singhania, for example, completed his 36-story Mumbai home, JK House, in 2016. At 476 feet, it is the city’s second-tallest family residence. The two-level flagship Raymond retail store, the nation’s largest chain of men’s clothing shops, occupies the building’s lower floors. Above, the skyscraper holds two swimming pools, 16 floors of apartments, and a private museum devoted to the family’s century-old fabric business, the world’s largest producer of wool suiting and the primary source of Singhania’s fortune.
Singhania’s main passion, however, is for speed. He established India’s first super car club and built the nation’s first drift track for the competitive sport of stylish sideways driving. His huge collection of sports cars includes a flashy Lamborghini Gallardo and a Lotus Elise convertible. In 2015 he became the first Indian to win a race in the Ferrari Challenge Europe series, a 15-race cycle for amateur drivers, at the wheel of a Ferrari 458 that sported India’s tricolors of orange, white and green.
The textile tycoon takes his swanky taste to the sea, too, with a fleet of flamboyantly named vessels, including the speedboats GoldenEye, Goldfinger, Octopussy and Thunderball. His sleek 164-foot yacht Moonraker sleeps 10 and includes a gym, a movie theater and “emotional showers” that combine aromatherapy, colored lights and water temperature to affect mood. He also owns a rare all-teak yacht, the Ashena, decorated with luxe pieces like a marble-topped bar supported by seven silver elephants.
Singhania keeps his 30,000 factory employees on salary rather than paying them for piecework, a generous policy by Indian standards. But their starting pay of 14,000 rupees a month — about $206 — reflects the yawning gulf between the workers and the billionaire raj.
The brazen billionaire who set the trend of conspicuous consumption that later Bollygarchs followed was the self-proclaimed “King of Good Times,” Vijay Mallya, who spun out an impossibly luxe life of super-yachts and Formula One race cars to a dangerous extreme — all, he insisted, for the good of the business.
Mallya inherited United Breweries in 1983 at age 27, after his father’s sudden death. The company’s signature brand, Kingfisher Beer, was on its last legs, thanks in part to India’s strict rules outlawing alcohol advertising.
“I did what [Richard] Branson does,” he said, taking his cue from the playboy Virgin CEO. “I lived the brand.”
Mallya made headline-grabbing behavior his mission, pursuing it with a vengeance around the world. He bought multiple luxury homes — from an apartment in Trump Tower to a South African game preserve — and globe-trotted relentlessly, plying guests with his products all the way.
He cruised in a 165-foot Edwardian yacht, the Kalizma, that actor Richard Burton had presented as a gift to Elizabeth Taylor in 1967. He collected dozens of classic cars, stashing them at his various properties. He bought a cricket franchise in the Indian Premier League, naming them the Royal Challengers Bangalore after his own brand of whiskey.
His branding turned Kingfisher into a big seller, which he leveraged to continually expand his conglomerate — taking on ever riskier debts to fund ever more dubious ventures, and eventually seizing a seat in Parliament to bend regulations in his favor.
One of his brands, the low-price but luxe Kingfisher Airlines, never turned a profit in seven years. When regulators yanked its licenses in 2012, Mallya’s overinflated empire began to collapse. By 2016, $2 billion in debt to suppliers, bankers and former employees, he had a new nickname: the “poster boy of loan default.”
With Modi’s government threatening criminal fraud charges, Mallya fled to London, where he lives in luxurious exile with the remains of his fortune, a Maybach behind his mansion town house and an estate in the country — still fighting the extradition order that would land him in a New Delhi prison if he ever returns to India. His next court date is July 31.
Modi seems intent on making an example of Mallya. The former tycoon’s extradition was a prime topic of discussion when the Indian leader met with British Prime Minister Theresa May last month.
“The fact is that the law is catching up with those who felt entitled to play with the law,” a Modi spokesman said Wednesday — a signal, perhaps, to the Bollygarchs that the cronyism that made their fortunes might finally be spent.
By James Crabtree
Tue 10 Jul 2018 06.00 BST
On 3 May, at around 4.45pm, a short, trim Indian man walked quickly down London’s Old Compton Street, his head bowed as if trying not to be seen. From his seat by the window of a nearby noodle bar, Anuvab Pal recognised him instantly. “He is tiny, and his face had been all over every newspaper in India,” Pal recalled. “I knew it was him.”
Few in Britain would have given the passing figure a second look. And that, in a way, was the point. The man pacing through Soho on that Wednesday night was Nirav Modi: Indian jeweller, billionaire and international fugitive.
In February, Modi had fled his home country after an alleged $1.8bn fraud case in which the tycoon was accused of abusing a system that allowed his business to obtain cash advances illegally from one of India’s largest banks. Since then, his whereabouts had been a mystery. Indian newspapers speculated that he might be holed up in Hong Kong or New York. Indian courts issued warrants for his arrest, and the police tried, ineffectually, to track him down.
It was only by chance that Pal spotted him. A standup comic normally based in Mumbai, he happened to be in London for a run of gigs. “My ritual was to go to the same noodle bar, have a meal, and then head to the theatre,” Pal said. “I always sat by the window. And then suddenly Modi walks past. He was unshaven, and had those Apple earphones, the wireless ones. He looked like he was in a hurry.”
It was another month before the press finally caught up with Modi, as reports of his whereabouts emerged in June, along with the suggestion that he was planning to claim political asylum in the UK. (Modi denies wrongdoing, and did not respond to requests for comment.) In the process, Modi also gained entry into one of London’s more notorious fraternities: the small club of Indian billionaires who seem to end up in the British capital following scandals back at home.
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The most prominent among these émigré moguls is India’s “King of Good Times”, Vijay Mallya, the one-time aviation magnate and brewer, who transformed Kingfisher beer into a global brand. A few years ago, Mallya was one of India’s most celebrated industrialists, famous for his mullet haircut and flamboyant lifestyle. But in early 2016, Indian authorities filed charges relating to the collapse of his Kingfisher airline, which went bust in spectacular fashion in 2012, leaving behind mountainous debts and irate, unpaid staff. And so, facing allegations of financial irregularities and of refusing to repay outstanding loans, Mallya quietly boarded a plane for Britain, too.
Like Modi, Mallya denies wrongdoing. Last month he released a long statement accusing India’s government of conducting a witch-hunt against him. And to the extent that this claim has some merit, it is because Indian prime minister Narendra Modi (no relation to Nirav Modi) has of late been under great pressure to bring supposedly errant tycoons such as Mallya to book.
Men like Mallya and Modi were members of India’s expanding billionaire class, of whom there are now 119 members, according to Forbes magazine. Last year their collective worth amounted to $440bn – more than in any other country, bar the US and China. By contrast, the average person in India earns barely $1,700 a year. Given its early stage of economic development, India’s new hyper-wealthy elite have accumulated more money, more quickly, than their plutocratic peers in almost any country in history.
Narendra Modi won an overwhelming election victory in 2014, having promised to put a stop to the spate of corruption scandals that had dogged India for much of the previous decade. Many involved prominent industrialists – some directly accused of corruption, while others had simply mismanaged their finances and miraculously managed to escape the consequences. Voters turned to Narendra Modi, the self-described son of a poor tea-seller, hoping he would deliver a new era of clean governance and rapid growth, ridding India of a growing reputation for crony capitalism.
Narendra Modi pledged to end a situation in which the country’s ultra-wealthy – sometimes called “Bollygarchs” – appeared to live by one set of rules, while India’s 1.3 billion people operated by another. Yet as they continue to hide out in cities like London, men like Mallya and Nirav Modi have come to be seen as representing the failure of that pledge; the Indian authorities “have a long road ahead”, as one headline put it in the Hindustan Times last year, referring to a “long and arduous” future extradition process in Mallya’s case.
And as Narendra Modi gears up for a tough re-election battle next year, he is fighting the perception that India is unable to bring such men to heel, and that it has been powerless to respond to the rise of this new moneyed elite and the scandals that have come with them. “This ongoing battle to get India’s big tycoons to play by the rules is one of the biggest challenges we face,” says Reuben Abraham, chief executive of the IDFC Institute, a Mumbai-based thinktank. “Getting it right is central to India’s economic and political future.”
India has long been a stratified society, marked by divisions of caste, race and religion. Prior to the country winning independence in 1947, its people were subjugated by imperial British administrators and myriad maharajas, and the feudal regional monarchies over which they presided. Even afterwards, India remained a grimly poor country, as its socialist leadership fashioned a notably inefficient state-planned economic model, closed off almost entirely from global trade. Over time, India grew more equal, if only in the limited sense that its elite remained poor by the standards of the industrialised west.
But no longer: the last three decades have seen an extraordinary explosion of wealth at the top of Indian society. In the mid-1990s, just two Indians featured in the annual Forbes billionaire list, racking up around $3bn between them. But against a backdrop of the gradual economic re-opening that began in 1991, this has quickly changed. By 2016, India had 84 entries on the Forbes billionaire list. Its economy was then worth around $2.3tn, according to the World Bank. China reached that level of GDP in 2006, but with just 10 billionaires to show for it. At the same stage of development, India had created eight times as many.
In part, this wealth is to be welcomed. This year India will be the world’s fastest-growing major economy. During the last two decades, it has grown more quickly than at any point its history, a record of economic expansion that helped to lift hundreds of millions out of poverty.
Nonetheless, India remains a poor country: in 2016, to be counted among its richest 1% required assets of just $32,892, according to research from Credit Suisse. Meanwhile, the top 10% of earners now take around 55% of all national income – the highest rate for any large country in the world.
Put another way, India has created a model of development in which the proceeds of growth flow unusually quickly to the very top. Yet perhaps because Indian society has long been deeply stratified, this dramatic increase in inequality has not received as much global attention as it deserves. For nearly a century prior to independence, India was governed by the British Raj – a term taken from the Sanskrit rājya, meaning “rule”. For half a century after 1947, a system dominated by pernickety industrial rules emerged, often known as the Licence-Permit-Quota Raj, or Licence Raj for short. Now a system has grown in their place once again: the billionaire Raj.
The rise of India’s super-rich – the first and most obvious manifestation of the billionaire Raj – was propelled by domestic economic reforms. Starting slowly in the 1980s, and then more dramatically against the backdrop of a wrenching financial crisis in 1991, India dismantled the dusty stockade of rules and tariffs that made up the Licence Raj. Companies that had been cosseted under the old regime were cleared out via a mix of deregulation, foreign investment and heightened competition. In sector after sector, from airlines and banks to steel and telecoms, the ranks of India’s tycoons began to swell.
Nothing symbolises the power of this billionaire class more starkly than Antilia, the residential skyscraper built in Mumbai by Mukesh Ambani, India’s richest man. Rising 173 metres above India’s financial capital, the steel-and-glass tower is rumoured to have cost more than $1bn to build, looming over a city in which half the population still live in slums.
Ambani owns Reliance Industries, an empire with interests stretching from petrochemicals to telecoms. (His father, Dhirubhai, from whom he inherited his company, was one of the main beneficiaries of the economic reforms of the 1980s.) At Antilia, Ambani entertains guests in a grand, chandeliered ballroom that takes up most of building’s ground floor. There are six storeys of parking for the family’s car collection, while the tower’s higher levels feature opulent apartments and hanging gardens. Further down, in sub-basement 2, the Ambanis keep a recreational floor, which includes an indoor football pitch. Antilia became an instant landmark upon its completion in 2010. The city had long been a place of stark divisions, yet the Ambani’s home almost seemed to magnify this segregation. (A spokesman for Reliance did not respond to a request for comment.)
The emergence of the Indian super-rich was bound up in larger global story. The early 2000s were the heyday of the so-called “great moderation”, when world interest rates stayed low and industrialised nations grew handsomely. This was also when the fortunes of India’s new tycoons began to change. Pumped up by foreign money, domestic bank loans and a surging sense of self-belief, industrialists went on a spending spree. Ambani dumped billions into oil refineries and petrochemical plants. Vijay Mallya spent heavily on new fleets of Airbus jets. Nirav Modi began building a global chain of jewellery stores. Stock markets boomed. From 2004 to 2014, India enjoyed the fastest expansion in its history, averaging growth of more than 8% a year.
The boom years brought benefits, most obviously by reintegrating India into the world economy. Yet this whirlwind growth also proved economically disruptive, socially bruising and environmentally destructive, leaving behind what the writer Rana Dasgupta describes as a sense of national trauma. India’s new wealth has been shared remarkably unevenly, too. Its richest 1% earned about 7% of national income in 1980; that figure rocketed to 22% by 2014, according to the World Inequality Report. Over the same period, the share held by the bottom 50% plunged from 23% to just 15%.
Unsurprisingly, some feel resentful. “You walk around the streets of this city, and the rage at Antilia has to be heard to be believed,” Meera Sanyal, a former international banker turned local anti-corruption campaigner, told me in 2014. Six years before that, in 2008, as the scale of India’s billionaire fortunes were becoming clear, Raghuram Rajan – an economist who would later become the head of India’s central bank – asked an even more pointed question about his country’s tycoon class: “If Russia is an oligarchy, how long can we resist calling India one?”
Back in London, Vijay Mallya feels unjustly targeted by India’s recent attempts to shed its reputation for crony capitalism, the second defining characteristic of the billionaire Raj. “I have been accused by politicians and the media alike of having stolen and run away with Rs 9,000 crores [90bn rupees, or $1.3bn] that was loaned to Kingfisher Airlines,” he wrote in his open letter last month. His case had become, he suggested, a “lightning rod for public anger” over the alleged misbehaviour of his fellow tycoons.
In spring 2017, I met Mallya at his London home, a Grade I-listed town house a short walk from Baker Street tube station. A variety of Rolls-Royces and Bentleys were parked along the mews at the rear, alongside a fat silver Maybach with the number plate VJM 1, which idled outside Mallya’s back door. Inside, he sheltered behind a grand wooden table, a gold lighter and two mobile phones lined up in front of him. At one point I asked to be excused to visit the toilet. A flunky ushered me into a golden bathroom, with a shiny gold seat to match its golden taps and loo-roll holder. The fluffy hand towels were white, but each one came embossed with the letters “VJM” in gold thread.
On the surface, Mallya still seemed every bit the ebullient tycoon of old: a bulky man in a red polo shirt, with gold bracelets on each wrist and a chunky diamond ear stud. But by then he had been stuck in Britain for more than a year, and grew downbeat as the afternoon wound on and our conversation turned to his business troubles and the state of his homeland. “India has corruption running in its veins,” he said with a sigh. “And that’s not something one is going to change overnight.”
With his shoulder-length hair and taste for bling, Mallya had long honed an image as the most piratical of India’s generation of entrepreneurs. A specially kitted-out Boeing 727, its bar well-stocked with his own Kingfisher beer, whisked him between parties and business meetings – a distinction that was, in any case, often hazy. “It was all a bit ridiculous,” one ex-board member at a Mallya company told me.
Now marooned in London, Mallya had plenty of time to ponder his missteps. Once a member of the Rajya Sabha, the Indian upper house of parliament, his diplomatic passport has been cancelled. As a long-time UK resident, he was permitted to stay in the country, but without travel documents he was unable to travel, curtailing his notorious jetsetting lifestyle almost entirely. Earlier this month, a UK court issued an order allowing authorities trying to recover debts to enter his various British properties.
In his pomp, Mallya seemed to represent a new India. In a country whose old commercial elite had been dominated by cautious, discreet industrialists, Mallya was different: rich, powerful and not inclined to hide it. Not all of India’s pioneers behaved in this way – its software and IT billionaires, for instance, were typically less flamboyant figures. But while Mallya continues to deny that he did anything wrong, he admits that he has become what he calls the “poster boy” for a moment of public anger against India’s rich, as many newly wealthy business figures found themselves mired in allegations of wrongdoing.
India’s old system created fertile ground for corruption, forcing citizens and businesses alike to pay myriad bribes for basic state services. But these humdrum problems were trivial compared with the grand scandals that emerged during the 2000s. Assets worth billions were gifted under the table to big tycoons by senior politicians and bureaucrats in what became known as the “season of scams”. Giant kickbacks helped businesses acquire land, bypass environmental rules and win infrastructure contracts. Headlines filled up with fresh outrages, from fraudulent public housing schemes to dodgy road-building projects.
Many of those who backed India’s economic reforms hoped that a more free-market economy would lead to more honest government. Instead, crony capitalism infiltrated almost every area of national life. Hundreds of billions of dollars were siphoned away, according to some estimates, by a shadowy alliance of colluding politicians and business tycoons. India’s old system of retail corruption went wholesale.
Many politicians also became astoundingly rich, and would have made the Forbes list had their holdings not been hidden carefully in shell companies and foreign banks. Rapid economic growth increased the value of political power, and what could be extracted from it. Political parties had to raise more money, to fight elections and fund the patronage that kept them in office. One estimate suggested that India’s 2014 election cost close to $5bn, a huge increase over the cheap and cheerful polls of the pre-liberalisation era. Election experts believe most of this money is brought in illegally from favoured tycoons, in exchange for unknown future favours.
Politicians spend the money to fund campaigns, but also on handing out favours, jobs and cash to constituents. “It’s sort of an unholy nexus,” as Raghuram Rajan put it to me during his tenure as head of India’s central bank. “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.”
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This nexus between business and politics lies at the heart of the third problem of India’s billionaire Raj, namely the boom-and-bust cycle of its industrial economy. In recent decades, China went on the largest infrastructure building spree in history, but almost all of it was delivered by state-backed companies. By contrast, India’s mid-2000s boom was dominated almost exclusively by its private-sector tycoons, giving the industrialists and the conglomerates they run a position of outsized importance in India’s economic development.
Bollygarchs borrowed huge sums from state-backed banks and invested with gleeful abandon, in one of the largest deployments of private capital since America built its railroad network 150 years earlier. But when India’s good times came to an end after the global financial crisis, the tycoons’ hubris was exposed, leaving their businesses over-stretched and struggling to repay their debts. In 2017, 10 years on from the crisis, India’s banks were still left holding at least $150bn of bad assets.
Since taking office, Narendra Modi has tried, often ineffectually, to fix this corporate- and bank-debt crisis, alongside the related problems of cronyism and the super-rich that contributed to it. Watching developments such as these, some argue that the power of India’s tycoon class is fading. Yet India’s ultra-wealthy are still thriving, while its ranks of billionaires keep swelling, and will continue to do so.
There is every reason to believe that on its current course, the country’s the gap between rich and poor will widen, too. Perversely, the closer India comes to its achieving its ambitions of Chinese-style double-digit levels of economic growth, the faster this will happen. On most measures, it should already be ranked alongside South Africa and Brazil as one of the world’s least-equal countries. Even more importantly, poor countries that start off with high levels of inequality often struggle to reverse that trend as they grow richer.
Many experts believe India needs to act. “The main danger with extreme inequality is that if you don’t solve this through peaceful and democratic institutions then it will be solved in other ways … and that’s extremely frightening,” as French economist Thomas Piketty has said of India’s future, pointing to likely rising future tensions between the wealthy and the rest.
India is now entering a new phase of development, as it tries to follow Asian economies such as South Korea and Malaysia out of poverty and towards full “middle-income” status. There is no reason this cannot happen. But as we’ve seen in Latin America, the economies with the widest social divides have tended to be the ones that are most likely to get stuck in the “middle-income trap”, achieving moderate prosperity but failing to become rich. The more successful countries of east Asia, by contrast, grew prosperous while managing to stay egalitarian, partly by building basic social safety nets and ensuring that their wealthiest citizens paid their taxes. Of the two models, it seems clear which India should want to follow.
Much the same is true of corruption. India’s old system of cronyism, with its political favours and risk-free bank loans, has came under intense scrutiny, but the battle against corruption is at best half-won. Kickbacks still dominate swathes of public life, from land purchase to municipal contracts. State and city governments are just as venal as ever. Surveys report that India remains Asia’s most bribe-ridden nation. “For any society to lift itself out of absolute poverty, it needs to build three critical state institutions: taxation, law and security,” according to the economist Paul Collier. All three in India – the revenue service, the lower levels of the judiciary and the police – still suffer endemic corruption. Perhaps most importantly, the country’s under-the-table political funding system remains largely untouched.
Progress in fixing India’s problems of corporate and bank debt has also been frustratingly slow. Modi has introduced some important measures, including a new bankruptcy law and a series of bank recapitalisations. But more radical options have been ignored, notably the privatisation of struggling public-sector lenders.
If these struggles sound familiar, that is because they are. India is far from the first country to enjoy a period of rampant cronyism and wild growth, and then grapple with how to respond. In Britain, the onset of the industrial revolution in the mid-19th century kicked off such a moment, as captured in the novels of Charles Dickens and Anthony Trollope. But the more obvious parallel is with America, and the era between the end of the civil war in 1865 and the turn of the 20th century: the Gilded Age, or the era of “the great corporation, the crass plutocrat [and] the calculating political boss”, as one historian put it.
India’s own Gilded Age is different in many ways, but it shares at least one characteristic – namely, that such a period of early industrialisation is also a time of rapid political and economic change, in which it should be possible to invoke what the philosopher Richard Rorty once called the “romance of a national future”, the sense of hope that infuses powers on the rise.
India is set to grow in economic might throughout this century, as America did during the 19th. By some accounts, it has already overtaken China as the world’s most populous nation; in others, the baton will pass during the next decade or two. Whatever the case, the fate of a large slice of humanity depends on India getting its economic model right. Meanwhile, as democracy falters in the west, so its future in India has never been more critical. To make this transition, India’s billionaire Raj must become a passing phase, not a permanent condition. India’s ambition to lead the second half of the “Asian century” – and the world’s hopes for a fairer and more democratic future – depend on getting this transition right.
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