James Crabtree’s new book, The Billionaire Raj, promises to be interesting.
His article in the Guardian is insightful and incisive. He writes about how economic growth in India has been characterised by the ballooning of the total number of (declared) billionaires and oligarchs, and, concurrently, the impoverishment of those at the lower rungs of the economy.
It also talks about the explosive potential of growing inequality.
However, if you ask people (rich or poor) about what ails the Indian economy, people are most likely to identify corruption as a bigger problem than inequality.
Anger about corruption runs deep in India. Corruption is rampant and endemic. Not a sector of the economy and state can be said to be free of the scourge of corruption.
Indian expats are wont to wax lyrical about the sheer magnitude and inescapable tragedy of corruption in India. Let me not be an exception: Corruption suffuses the air and water in India; it infiltrates the very capillaries of life in India.
And people have been angry about it for a long time, even more so since the period c. 2010 – c. 2014, during which a series of staggering exposes of scams, and the spectacular protests that these exposes precipitated, roiled the country.
But corruption and the existence of an oligarchy are closely inter-related.
What does the existence of an oligarchy say about corruption in India? Well, everything. Most of the major scams that have rocked the country have been instances of corporate perfidy and state complicity in said perfidy.
Crabtree’s book, going by his article, promises to present some insights into the perfidies of the oligarchs and the way in which crony capitalism has led to the ballooning of both corporate and state corruption.
Fundamentally, though, he seems to be focused on the ‘big picture’, which is that India is rapidly going down the Latin American path – development and middle-income status will bring about staggering inequality, and the country as a whole will remain pegged very low in terms of the human development index.
This path is likely to lead to a situation where most of the wealth that is generated in the country will remain concentrated in the hands of the 0.001%. ‘Jobless growth’ will be entrenched.
Also – and this is something that is relevant to expat readers – it will further exacerbate a situation in which the oligarchs are earning their wealth in India and spending it overseas, leading to reduced ‘trickle down’ domestically.
While some may think that this is not concerning in and of itself (well, it actually is), the problem takes on a sinister hue when you throw corruption and global mobility into the mix.
Most corrupt oligarchs – even the average rich politician – in India is likely to siphon off ‘ill-gotten’ wealth overseas, whether through expenditures, investments or plain old Cayman Islands-style post-boxing.
If the issue of the state banks accumulating bad assets because of bad loans (including corruptly procured loans) to corporates is concerning, think how much more concerning is the prospect of never recovering wealth that has been siphoned off (Crabtree’s article provides the two prime examples of this, the ones that have hogged the headlines in recent years).
Most rich Indians spend a fair chunk of their disposable wealth overseas. This will likely continue unabated.
But, as I said, for oligarchs and the corruptly rich, the scales are quite out of whack.
Crabtree is right that Prime Minister Modi’s efforts to address the problem of ‘big picture’ corruption have not yielded the ‘big picture’ solutions that many Indians had hoped for and have been hoping for since the Jan Lokpal days.
And, while many oligarchs are out there in the limelight, corruptly rich politicians are well and truly safely ensconced in their fiefdoms.
Anyone who understands what the price of corruption is (in terms of lost human and infrastructure development) and has had the misfortune of witnessing how corrupt Indian politicians spend overseas – the misfortune of witnessing the tragedy of ill-gotten wealth that was taken from a poor country being splashed around mindlessly in a rich country – will balk at the injustice of it.
The oligarchy-style economic growth that the IMF and others have been talking about for a while now is going to turn India into a colony yet again – one where the (indigenous) colonialists extract from the public exchequer and take elsewhere.
What happens in India is that the state becomes obsessed about getting the small fish. Individual tax-payers, with modest incomes, will be hounded to hell and back, but politicians, oligarchs and even the average rich person with ‘connections’ will remain free to steal, swindle and bribe with impunity.