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WORK TITLE: The Billionaire Raj: A Journey Through India’s New Gilded Age
WORK NOTES:
PSEUDONYM(S):
BIRTHDATE: 1977
WEBSITE: http://www.jamescrabtree.com/
CITY: Mumbai
STATE:
COUNTRY: India
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RESEARCHER NOTES:
PERSONAL
Born 1977.
EDUCATION:Elion Academy, B.S., 1998; attended London School of Economics; Harvard University, Kennedy School of Government, M.P.P., 2006.
ADDRESS
CAREER
Work Foundation, London, England, research director, 2001-03; Institute for Public Policy Research, London, England, visiting fellow, 2004-05, associate director, 2008, NDN, Washington, DC, senior policy advisor, 2006; UK Prime Minister’s Strategy Unit, London, policy advisor, 2007-08; Prospect Magazine, senior editor, 2008-10; Financial Times, comment editor, 2010-11, Mumbai, India, bureau chief, 2011-16; Lee Kuan Yew School of Public Policy, Singapore, senior visiting research fellow, 2016–. associate professor of practice, 2017–. MySociety, trustee, 2005-16. Chatham House, London, England, nonresident fellow in Asia program.
AWARDS:Fulbright Scholarship.
WRITINGS
Contributor to periodicals, including Nikkei Asian Review. Economist, Wired, and Foreign Policy.
SIDELIGHTS
James Crabtree, a journalist and scholar with much experience in economics and public policy, profiles the twenty-first-century business tycoons of India in The Billionaire Raj: A Journey through India’s New Gilded Age. Among his subjects are Mukesh Ambani, the chief executive officer of Reliance Industries, an oil and gas firm, and India’s wealthiest man; Naveen Jindal, head of a steel company; and Vijay Mallya, who made his fortune in beverages, and Lalit Modi, a sports mogul, both of whom took refuge in London amid accusations of criminal behavior in India. He contrasts their way of life with the poverty of ordinary Indians. Ambani and his family live in a twenty-seven-story, 400,000-square-f00t home in Mumbai with a ballroom, gymnasiums, saunas, areas for playing cricket and soccer, hanging gardens, and a six-floor parking garage. Mallya’s home in London has gold toilet seats. The huge economic divide between these men and most Indians is similar to the divide seen in the United States’ “gilded age” of the late nineteenth and early twentieth centuries, Crabtree writes. These wealthy Indians, he reports, have a symbiotic relationship with the nation’s politicians; corporate heads make campaign donations, often illegally, in exchange for favors. Prime Minister Nahendra Modi, who took office in 2014, is supportive of the nation’s top business leaders, and they support him. Crabtree sees widespread corruption in the interactions between business and government, but he also foresees change. The U.S. gilded age was followed by an embrace of progressive policies aimed at reducing economic inequality, and India’s gilded age may be as well, he writes.
In the United States, “gradually, corruption was driven out of politics,” Crabtree told Ari Shapiro on National Public Radio’s All Things Considered. “You move from a buccaneering, corrupt, rapacious society to one that was much more socially just. And I think that’s perfectly possible in India.” Such change, however, “doesn’t happen by accident,” Crabtree continued. “You have to deal with deeply rooted inequality. You have to stamp out corruption. You have to have an industrial system where you can, you know, build infrastructure without corruption. And so the point is that India stands on the cusp of that change.” He added that the rest of the world has a great interest in the financial and political health of India, which promises to be a burgeoning economy during the coming decades.
Several critics thought Crabtree offered a wide-ranging view of his subject, along with keen commentary. “His book is full of sharp snapshots from what he calls India’s new gilded age,” while “he also makes a muscular argument about the interlinkage of democracy, business and development,” remarked a contributor to the Economist‘s U.S. edition. The reviewer added: “The analysis really sings when Mr Crabtree finds new ways to capture the collision of profits, politics and public opinion.” In the San Francisco Chronicle, Sonia Faleiro related: “In profile after carefully observed profile, Crabtree, a former Financial Times Mumbai correspondent, shows us rich men lolling in their habitat. The effect is as off-putting as one might expect.” Much of this information has been reported previously, she noted, but nonetheless, “there has never been a better time to examine the deep links between India’s rich and powerful.” Oliver Balch, writing in Literary Review, reported that “this is not a book primarily about personalities. Crabtree is no Tatler hack or tabloid muckraker. Cheap credit lines and accountancy tricks, infrastructure financing and resource licensing: these are what work him up. It is testament to his skill as a writer and storyteller that the hard economics at the core of The Billionaire Raj neither bores nor overbears.”
Some reviewers did see flaws in the book. Faleiro maintained that India’s culture of political and business corruption “requires a more critical examination than Crabtree is willing to give.” She found his prediction of a newly progressive era in India overly optimistic, and she saw a possibility, given the continued cronyism between the business and public sectors, that the nation will become less democratic, not more. Jonathan A. Knee, critiquing in the New York Times, had a similar observation, saying Crabtree’s “nuanced portrait of contemporary India … may not support this level of confidence” in a progressive future. Knee also faulted Crabtee as failing “to deliver on the promise of a comprehensive portrait of a newly minted cluster of billionaires,” This, however, “does not mean the book is without interest,” he continued. “On the contrary, the book is chock-full of profoundly revealing vignettes from various corners of India’s endlessly diverse society and economy. Mr. Crabtree introduces us to local political fixers, national anticorruption crusaders and even India’s equivalent of Bill O’Reilly.”
The Billionaire Raj received praise from several other commentators, such as Financial Times contributor Meghnad Desai, who wrote: “Crabtree’s vivid portrayal of the corruption of politics is very informative, and thought-provoking. He travels the country to show both how deep corruption reaches into electoral politics—but also how functional it is.” In the Washington Post, Bilal Qureshi remarked: “While Crabtree’s book occasionally suffers from abrupt shifts in focus, it offers an excellent survey of India’s economic and political transformation. In crisp language designed for a general reader, The Billionaire Raj provides an overview of just how India became the world’s most coveted market after its independence from British rule.” A Kirkus Reviews critic termed it “solid reading for students of economic development and global economics.” A Publishers Weekly reviewer concluded: “This is an invaluable commentary on Indian democracy and the forces that threaten it.”
BIOCRIT
PERIODICALS
Economist (US), July 7, 2018, “The Great Ghatsby; India’s Rise,” p. 69.
Financial Times, July 4, 2018, Meghnad Desai, “The Rapid Ascent of India’s Super-rich.”
Kirkus Reviews, May 15, 2018, review of The Billionaire Raj: A Journey through India’s New Gilded Age.
Literary Review, July, 2018, Oliver Balch, “Rise of the Bollygarchs.”
New York Times, July 10, 2018, Jonathan A. Knee, ‘The Billionaire Raj’ Offers Reasons for Optimism in India’s Gilded Age.”
Publishers Weekly, Aprol 23, 2018, review of The Billionaire Raj, p. 74.
San Francisco Chronicle, August 10, 2018, Sonia Faleiro, review of The Billionaire Raj.
Washington Post, August 3, 2018, Bilal Qureshi, “A Portrait of India’s Fragile Democracy in an Era of Financial Excess.”
ONLINE
James Crabtree website, http://www.jamescrabtree.com (August 27, 2018).
Lee Kuan Yew School of Public Policy website, https://lkyspp.nus.edu.sg/ (August 27, 2018), brief biography.
National Public Radio website, https://www.npr.org/ (July 9, 2018), Ari Shapiro, “Author James Crabtree on India’s Growing Income Divide and ‘The Billionaire Raj'” (broadcast transcript from All Things Considered).
Penguin Random House website, https://www.penguinrandomhouse.com/ (August 27, 2018), brief biography.
Quoted in Sidelights: “gradually, corruption was driven out of politics,” Crabtree told Ari Shapiro on National Public Radio’s All Things Considered. “You move from a buccaneering, corrupt, rapacious society to one that was much more socially just. And I think that’s perfectly possible in India.” Such change, however, “doesn’t happen by accident,” Crabtree continued. “You have to deal with deeply rooted inequality. You have to stamp out corruption. You have to have an industrial system where you can, you know, build infrastructure without corruption. And so the point is that India stands on the cusp of that change.”
Author James Crabtree On India's Growing Income Divide And 'The Billionaire Raj'
July 9, 20184:58 PM ET
Heard on All Things Considered
ARI SHAPIRO
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NPR's Ari Shapiro speaks with author James Crabtree about his book The Billionaire Raj. The book talks about the growth of super-wealthy Indians and why there are so many.
ARI SHAPIRO, HOST:
The spirit of an age is often captured in its grandest buildings. That's a line from journalist James Crabtree's new book "The Billionaire Raj." In modern Mumbai, that building is Antilia, a skyscraper that looks like a game of Jenga.
JAMES CRABTREE: In there, you have a hotel-style ballroom in the basement. In the subbasement, you have an indoor football pitch and a basketball pitch. You've got six floors of parking for the family car collection. And then you go up and up and up through luxurious amenities - you know, gyms and saunas, hanging gardens, a fantastic roof terrace. But this is known colloquially in Mumbai as the billion-dollar home.
SHAPIRO: That's right - home. With all of its opulence and exuberance, Antilia is a single-family home built by India's richest man, Mukesh Ambani. He's just one of the billionaire tycoons rapidly reshaping modern India and contributing to one of the fastest-growing income divides in the world. When I spoke with James Crabtree about his book, I started by asking him about that divide.
CRABTREE: India remains a very poor country. And yet at the very pinnacle of society, you have people like Mr. Ambani who's not only the richest man in India, he's the richest man in all of Asia. And in many ways, this is quite similar to the phenomenon that happened in the United States in the aftermath of the Civil War, the Gilded Age where you have rampant corruption and cronyism in politics. The stages the two countries are at are very different in many ways, but they're going through a sort of similar period in their histories.
SHAPIRO: The Gilded Age in the United States ended at the turn of the 20th century with economic turbulence and reforms and the rise of labor unions. Do you think that India is headed on a similar trajectory?
CRABTREE: I think it certainly could. So that's the optimistic scenario. So in the U.S., you had many of these similar characteristics. So Mukesh Ambani bears some similarities to Cornelius Vanderbilt, who was also, I mean, I think the richest man who had ever lived by the time that he died in the latter part of the 19th century. The U.S. example is a very positive one because you move from the Gilded Age to what tends to be called the Progressive Era. Gradually, corruption was driven out of politics. You move from a buccaneering, corrupt, rapacious society to one that was much more socially just.
And I think that's perfectly possible in India. But in order to get there, it doesn't happen by accident. You have to deal with deeply rooted inequality. You have to stamp out corruption. You have to have an industrial system where you can, you know, build infrastructure without corruption. And so the point is that India stands on the cusp of that change.
SHAPIRO: Is this a moment in India right now where everyone's life is improving and the growth is just most dramatic among the super-rich, or are the wealthiest people in India profiting at the expense of the poor?
CRABTREE: I think it's a little bit of both. India has had a reasonably positive record on poverty reduction. The image many people have of India is of grinding abject poverty when that's actually not really how things are anymore. Since liberalization, the rising tide is lifting all boats to some degree. It's just that the people at the top are shooting off into the distance.
SHAPIRO: You write that this is ultimately an optimistic book. And having read it, that is not obvious to me (laughter). So explain why you see it that way.
CRABTREE: I think we have seen many examples of countries that have come through this. If you were to have lived in the United States in 1880 and you were to have seen the mansions of Newport, R.I., and the slums of New York, you might not have been very optimistic about America's future. You might have said, you know, this is an endemically corrupt country run by complete scoundrels in which the rich are running away with everything. And yet, you know, within 10 or 20 years, you had the beginnings of a movement which changed the country very fundamentally.
And I think we in America and Britain, in the West have a great stake in this. I mean, India is going to be one of the world's fastest-growing economies for the next 20 or 30 years. But it's also a democracy at the time in which China is slipping backwards into a form of quasi-dictatorship. The same is true with Russia. You look around the world, it's not an optimistic picture.
We all have a huge interest in the success of India. If India can become a prosperous parliamentary democracy with something approaching a liberal market economy in which its various diverse peoples - Muslim, Hindu, Sikh, Christian - can live together in some form of harmony, then this would be a wonderful thing for humanity.
SHAPIRO: James Crabtree, thanks so much for speaking with us today.
CRABTREE: Thank you, Ari.
SHAPIRO: His new book is called "The Billionaire Raj: A Journey Through India's New Gilded Age."
Copyright © 2018 NPR. All rights reserved. Visit our website terms of use and permissions pages at www.npr.org for further information.
James Crabtree
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ABOUT THE AUTHOR
James Crabtree is an associate professor of practice at the Lee Kuan Yew School of Public Policy at the National University of Singapore. He was formerly the Mumbai bureau chief for the Financial Times.
James Crabtree is a writer, journalist and author living in Singapore. He is currently an associate professor of practice at the Lee Kuan Yew School of Public Policy, and a senior fellow at the school’s Centre on Asia and Globalisation. His first book, The Billionaire Raj: A Journey Through India’s New Gilded Age, will be published in July 2018.
At the Lee Kuan Yew School, James teaches courses on leadership and political communication, and researches the future of globalisation, including new regional connectivity projects in Asia, and in particular China’s Belt and Road Initiative.
James is also a non-resident fellow at the Asia programme at Chatham House, and writes a fortnightly column for Nikkei Asian Review.
Prior to moving into academia, James worked for the Financial Times, latterly leading the newspapers coverage of Indian business as Mumbai bureau chief between 2011 and 2016, having previously worked on the opinion page in London, as Comment Editor.
Before joining the FT, James was first managing editor and then deputy editor at Prospect , Britain’s leading monthly magazine of politics and idea.
He has also written for a range of other global publications, including the New York Times, Economist, Wired, and Foreign Policy.
Prior to journalism, James was a senior policy advisor in the UK Prime Minister’s Strategy Unit under Prime Ministers Tony Blair and Gordon Brown.
He also worked for various think tanks in London and Washington DC, and spent a number of years living in the United States, initially as a Fulbright Scholar at the Harvard Kennedy School of Government.
James Crabtree
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Writer & journalist. Associate Prof in Practice at the LKY School. Author of The Billionaire Raj, pub July 2018
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Teacher at Asia's leading school of public policy, offering classes on leadership and communication, as well as economics and finance. Senior fellow at the school's Centre on Asia and Globalisation think tank, working mostly on trade, the future of globalisation, and connectivity, specifically China's Belt and Road.
Writer and journalist. Columnist for Nikkei Asia Review and contributor to publications from Foreign Policy and Wired to the FT and the Straits Times. Ex-FT Mumbai Bureau Chief. Non-resident fellow at the Asia-Pacific Programme of Chatham House.
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My book "The Billionaire Raj: A Journey Through India's New Gilded Age" will be published in July 2018 by Random House (USA), One World (UK) and Harper Collins (India).
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The rise of India’s super-rich is threatening the country’s chance of becoming an advanced economy
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Friends in Singapore - much looking forward to chairing this event later this mount at the school on Singapore and its future to launch Mui Hoong Chua's fine new book on the same subject, with Aaron Maniam, Adrian W. J. Kuah, PhD and Lim Siong Guan. https://lnkd.in/fCH3krK
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Good crowd to talk India and its potential at 1880 Singapore last night, with Radhika Rao, Kanti Bajpai and founder Marc Nicholson. Statistic of the evening: "India has the largest cropland of any country at 179.8 million hectares, compared with 167.8 million in the US and 165.2 million in China. Russia ranks fourth". https://lnkd.in/fcPBayq
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Pleasure to have been a part of the panel with James Crabtree (author of the must-read 'The Billionaire Raj') and LKY PP School's famed Professor Kanti Bajpai, discussing thoughts on Potential Rise of the Indian Economy. Thank you Marc Nicholson for hosting us at the lovely 1880 Singapore. Congrats James for making it to the longlist for the @FT @Mckinsey Business book of the year!
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Lee Kuan Yew School of Public Policy
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Associate Professor of Practice at Asia's leading public policy school, and senior fellow at the school's Centre on Asia and Globalisation. Teaching courses on leadership and communication, and the world after the financial crisis, amongst other things.
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PROFILE
James Crabtree is an Associate Professor in Practice at the LKY school, as well as a senior fellow at the Centre on Asia and Globalisation (CAG). He initially joined the school as a Senior Visiting Research Fellow in 2016, on sabbatical from his previous job at the Financial Times. Between 2011 and 2016, James led the FT’s coverage of Indian business as Mumbai bureau chief, having previously worked on the opinion page in London, as Comment Editor.
At the school, James teaches courses on leadership and political communication, as well as the economic and political implications of the global financial crisis. As a fellow at CAG, he works on various topics related to the future of globalisation, from the future of connectivity in Asia to relations between China and India. James is also a non-resident fellow at the Asia programme at Chatham House in London, and writes a fortnightly column for Nikkei Asian Review.
James has previously worked variously as a journalist and policymaker. Before joining the FT, he was deputy editor at Prospect, Britain’s leading monthly magazine of politics and idea. He has also written for a range of other global publications, including the Economist, Wired, and Foreign Policy.
Before journalism, James was a senior policy advisor in the UK Prime Minister’s Strategy Unit under Prime Ministers Tony Blair and Gordon Brown. He also worked for various think tanks in London and Washington DC, and spent a number of years living in the United States, initially as a Fulbright Scholar at the Harvard Kennedy School of Government.
His book, The Billionaire Raj: A Journey Through India's New Gilded Age, will be published in mid-2018, by Random House in America, One World in the UK, and Harper Collins in India.
RESEARCH AREA
American, British, and European Politics
Economic and Financial Regulation
Innovation and New Technology, including the regulation of artificial intelligence
Political Communication
Politics and business in India and South Asia, including India's 2019 election
Regional connectivity, including China's "Belt and Road"
Technology and the future of media
The Future of Globalisation
Trade and the politics of trade in Asia, including RCEP and TPP
Quoted in Sidelights: “His book is full of sharp snapshots from what he calls India’s new gilded age,” “he also makes a muscular argument about the interlinkage of democracy, business and development.” “The analysis really sings when Mr Crabtree finds new ways to capture the collision of profits, politics and public opinion.”
The great ghatsby; India's rise
The Economist. 428.9099 (July 7, 2018): p69(US).
Copyright: COPYRIGHT 2018 Economist Intelligence Unit N.A. Incorporated
http://store.eiu.com/
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Kingdom of the moguls
WRITING about India generally falls into one of two categories. There is what you might call the classical view, which emphasises the country's messy democracy, the court intrigue in Delhi, the role of the powerful states, and poverty and religion. And then there is the business-school view, which sees India as a huge potential market that could one day rival China, with a dynamic business scene that is already the world's eighth-largest, ranked by market capitalisation. James Crabtree's new book, "The Billionaire Raj", does the great service of tying these two stories together, showing how India's political system and its firms are symbiotically connected, in an entertaining--and sometimes disturbing--fashion.
Mr Crabtree is a former Mumbai bureau chief of the Financial Times and his book is full of sharp snapshots from what he calls India's new gilded age. In the London home of Vijay Mallya, a self-exiled liquor tycoon, Mr Crabtree finds a golden toilet seat and melancholia. He visits the western state of Goa, where mining outfits stripped the earth of iron ore and shipped it to China while tourists frolicked on the beaches. Elsewhere, an Aston Martin is impounded after a mysterious crash.
But Mr Crabtree also makes a muscular argument about the interlinkage of democracy, business and development. The country needs its bosses to marshal capital, build infrastructure and help it industrialise. The bosses need the government for cheap credit and permits. And the politicians--often reluctantly--tap firms for illicit cash, to pay for election campaigns that in total can cost billions of dollars.
Sometimes this arrangement delivers results. In 2004-10 India had the fastest growth spurt in living memory, with GDP rising at close to double-digit rates. A group of tycoons went on an investment binge that expanded the economy's capacity. But as Mr Crabtree documents, eventually the wheels came off, with accusations of corruption and mounting bad debts. The fallout contributed to the election in 2014 of Narendra Modi, India's strongman leader, who pushed an agenda of Hindu nationalism, clean government and development.
To illustrate his case, Mr Crabtree provides profiles of businessmen whose sheer ambition, he argues, is vital. Naveen Jindal, a mid-ranking steel magnate noted for his polo-playing and business debts, is transformed into a sympathetic figure; he is depicted in the remote state of Odisha, surrounded by forests, trying to get a steel and power project up and running.
The analysis really sings when Mr Crabtree finds new ways to capture the collision of profits, politics and public opinion. His account of India's cut-throat network-TV industry, through the eyes of a star presenter, is thrilling. And he explores the paradox of India's "southern belt" of states, most notably Tamil Nadu, which have their share of charismatic politicians and graft, but are also relatively rich. They have developed an efficient kind of populism, he concludes, in contrast to the purely venal politics farther north.
The book's main flaw is that it gives a narrow view of the business world. Like Russia and other parts of Asia, India has its politically connected moguls. But it also has what may be the world's most vibrant tech scene after America and China, a large stock of investment by multinational companies and a cohort of professionally run firms that compete in global markets.
Nonetheless the nexus of business and politics is central to India's future. Mr Crabtree thinks India needs its own progressive era, like America's in the late 19th and early 20th centuries, in which the machinery of the state is reformed in order to make markets work better. But he worries that Mr Modi, despite his formidable image and some solid accomplishments, is too cautious to make that happen.
The Billionaire Raj: A Journey Through India's New Gilded Age.
By James Crabtree.
Source Citation (MLA 8th Edition)
"The great ghatsby; India's rise." The Economist, 7 July 2018, p. 69(US). General OneFile, http://link.galegroup.com/apps/doc/A545475412/ITOF?u=schlager&sid=ITOF&xid=fe1f20c3. Accessed 13 Aug. 2018.
Gale Document Number: GALE|A545475412
Quoted in Sidelights: “nuanced portrait of contemporary India … may not support this level of confidence”
“to deliver on the promise of a comprehensive portrait of a newly minted cluster of billionaires,” This, however, “does not mean the book is without interest,” he continued. “On the contrary, the book is chock-full of profoundly revealing vignettes from various corners of India’s endlessly diverse society and economy. Mr. Crabtree introduces us to local political fixers, national anticorruption crusaders and even India’s equivalent of Bill O’Reilly.”
Review: 'The Billionaire Raj' Offers Reasons for Optimism in India's Gilded Age
Jonathan A. Knee
The New York Times. (July 10, 2018): Business News: pNA(L).
Copyright: COPYRIGHT 2018 The New York Times Company
http://www.nytimes.com
Full Text:
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For close to a century leading up to its independence in 1947, India operated under a system of British governance known as the Raj, taken from a Sanskrit word meaning ''kingdom'' or ''rule.'' Then, more or less until the introduction of economic liberalization in 1991, the country stagnated under a planned economy whose overwhelming regulatory demands were described as the License Raj.
The title of the new book by James Crabtree, ''The Billionaire Raj: A Journey Through India's New Gilded Age,'' suggests that India has now come under the grip of a new but no less troublesome regime. In a nation no longer at the mercy of imperial administrators and maharajahs or petty bureaucrats, ''a new system has grown up,'' and the emerging superrich are firmly in charge.
Mr. Crabtree, a former Mumbai bureau chief for The Financial Times, makes a compelling case for focusing on billionaires. In the mid-1990s, only two Indians made Forbes's annual list of the world's wealthiest. Twenty years later, there are over 100, behind only the United States, China and Russia. A World Bank economist recently found that the growth in wealth had been surpassed only by how quickly income inequality had increased. India now ranks above the United States, Brazil and even Russia. Only South Africa is less egalitarian.
Unfortunately, Mr. Crabtree does not fully profile the diverse community of Indian billionaires, who collectively own close to half a trillion dollars in assets. In fact, he devotes only the shortest of the book's three sections to descriptions of individual billionaires. The more detailed and most entertaining of these are of the anachronistic Trump-like moguls who crave the spotlight, or the fallen moguls looking to redeem themselves and to settle scores.
Mr. Crabtree seems to have had limited direct access to more mainstream billionaires like India's riches man, the Reliance Industries chairman
Mukesh Ambani, whose story frames the overall narrative of the book. A firsthand description of the 2015 Reliance public shareholder meeting is not particularly revealing.
The failure of ''The Billionaire Raj'' to deliver on the promise of a comprehensive portrait of a newly minted cluster of billionaires who rule the world's second most populous country does not mean the book is without interest. On the contrary, the book is chock-full of profoundly revealing vignettes from various corners of India's endlessly diverse society and economy. Mr. Crabtree introduces us to local political fixers, national anticorruption crusaders and even India's equivalent of Bill O'Reilly (complete with a demagogic catchphrase: ''The Nation Wants to Know!''). The chaotic and complex nation that emerges does not appear to be under the rule of billionaires or anyone else.
Two pervasive themes touch most of the assorted observations that fill ''The Billionaire Raj'': the influence on the country of corruption and of Narendra Modi, India's prime minister since 2014. On both of these topics, Mr. Crabtree seems deeply conflicted.
With respect to corruption, a distinction is made between the fleecing of public resources that underpinned the fortunes of many of the earliest Indian billionaires and an equally ''grand but more orderly'' form of corruption in which the spoils are used to fund social progress and encourage growth. The latter is treated sympathetically, although the lines between the many forms of corruption described are far from clear.
Mr. Modi has done much to reduce some of the most flagrant forms of corruption, but at the price of a disturbing increase in nationalism and a Trumpian authoritarian streak. Although Mr. Crabtree credits Mr. Modi with having ''reset the balance of power between politics and business,'' he concedes that ''kickbacks still dominate swaths of public life.'' Despite these and a variety of other concerns about the current regime, he concludes that Mr. Modi's victory ''rebuffed the notion that India itself had grown ungovernable, as if its turbulent democracy had become such a drag on its economy that it could not follow China's rapid process of development.''
Although there may be cause for such optimism, I could not find it in the pages of ''The Billionaire Raj.'' Only 30 years ago, the economies of China and India were roughly the same size. China's economy is now almost five times as large, and at India's current growth rate, it would take decades for India to reach China's current size.
As Mr. Crabtree's narrative makes plain, the primary source of financial corruption -- the immovable rot at the base of the Indian economy -- is ''the exorbitant and rapidly rising election costs for political parties, which has pushed them to raise huge quantities of illicit funds.'' A candidate in a close parliamentary race must raise at least $1 million, a monumental sum that is largely unachievable without some illicit quid pro quo. It is hard not to conclude that India's turbulent democracy poses a serious threat to its future development. If you want to feel better about our own problems in the face of the Supreme Court's decision in Citizens United, read ''The Billionaire Raj.''
Mr. Crabtree believes ''there is no reason'' that India's current Gilded Age cannot ''blossom into a Progressive Era of its own, in which the perils of inequality and crony capitalism are left decisively behind.'' The nuanced portrait of contemporary India that he has provided may not support this level of confidence, but I can't help but agree with Mr. Crabtree that ''the world's hopes for a more democratic, liberal future'' very much depend on India's ''getting this transition right.''
Jonathan A. Knee is professor of professional practice at Columbia Business School and a senior adviser at Evercore Partners. His latest book is ''Class Clowns: How the Smartest Investors Lost Billions in Education.''
Source Citation (MLA 8th Edition)
Knee, Jonathan A. "Review: 'The Billionaire Raj' Offers Reasons for Optimism in India's Gilded Age." New York Times, 10 July 2018, p. NA(L). General OneFile, http://link.galegroup.com/apps/doc/A545996749/ITOF?u=schlager&sid=ITOF&xid=fe0baaf4. Accessed 13 Aug. 2018.
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Quoted in Sidelights: “solid reading for students of economic development and global economics.”
Crabtree, James: THE BILLIONAIRE
RAJ
Kirkus Reviews.
(May 15, 2018):
COPYRIGHT 2018 Kirkus Media LLC
http://www.kirkusreviews.com/
Full Text:
Crabtree, James THE BILLIONAIRE RAJ Tim Duggan Books/Crown (Adult Nonfiction) $27.00 7, 3
ISBN: 978-1-5247-6006-9
A report from the front lines of inequality and corruption in India, one of the world's rising economies.
It's not the Taj Mahal, but it's got two-thirds of the floor space of Versailles--and on a footprint of just an
acre. Former Financial Times Mumbai bureau chief Crabtree considers the Mumbai apartment tower built
by billionaire Mukesh Ambani to be the pre-eminent symbol of "the power of India's new elite," one that
pointedly emphasizes the sharp divide between rich and poor in the country--and indeed, the divide between
the merely rich and the superrich. The creation of a class of hyperwealthy commoners owes at least in some
measure to domestic economic reforms meant to advance a free market but that, instead, in combination
with modernization and globalization, ushered in an era of staggering corruption, with the government
machinery simply unable to keep up with a wave of crony capitalism. "The 1991 reforms," writes the
author, gave "Indians a taste of a new world of mobile phones, multi-channel television and foreign
consumer goods." They also inaugurated an enthusiasm for globalization that is largely unmatched; most
Indians, Crabtree asserts, are all for it. However, support for globalization does not necessarily mean
support for the greatest beneficiaries of it; anti-corruption campaigns are increasingly commonplace. Yet
state apparatus is too inefficient to do much about it. As Crabtree notes, there are so many layers of
bureaucracy that a would-be entrepreneur has to negotiate that it's only natural for a businessperson to try
"to strike a deal towards the top of the decision-making chain." Corruption has not moderated under the
"big-government conservative" Narendra Modi, who, Crabtree foresees, will in his second term yield to the
temptation to substitute nationalism for economic reform, following the path set by Putin in Russia and
Erdogan in Turkey. Even so, writes the author, it is not inevitable that India become "a saffron-tinged
version of Russia."
Solid reading for students of economic development and global economics.
Source Citation (MLA 8th
Edition)
"Crabtree, James: THE BILLIONAIRE RAJ." Kirkus Reviews, 15 May 2018. General OneFile,
http://link.galegroup.com/apps/doc/A538293975/ITOF?u=schlager&sid=ITOF&xid=0950763d.
Accessed 13 Aug. 2018.
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Quoted in Sidelights: “This is an invaluable commentary on Indian democracy and the forces that threaten it.”
The Billionaire Raj: A Journey Through
India's New Gilded Age
Publishers Weekly.
265.17 (Apr. 23, 2018): p74.
COPYRIGHT 2018 PWxyz, LLC
http://www.publishersweekly.com/
Full Text:
* The Billionaire Raj: A Journey Through India's New Gilded Age
James Crabtree. Crown/Duggan, $27 (369p)
ISBN 978-1-5247-6006-9
In this eye-opening rumination on wealth, power, and those who seek both, Crabtree, a former India
correspondent for the Financial Times, ventures deep into the shadowy heart of India's "black-money"
economy. From the cantilevered skyscrapers of Mumbai's billionaire elite to a neglected Muslim ghetto in
Ahmedabad, Crabtree brings a reporter's precision and flair to his story, arguing that the rise of the
"Bollygarchs" and the takeover of Indian politics by huge sums of private money has led to a boom-andbust
cycle in India's industrial economy. Weaving in interviews with politicians, central bankers, and
industrial tycoons, he concludes that a lack of state capacity in India--the famously byzantine business
licensing system, as well as low levels of investment in infrastructure--has contributed to rent-seeking and
crony capitalism on the one hand and populist politics with a Hindu nationalist tinge on the other. An inside
look into the corridors of power, this is an invaluable commentary on Indian democracy and the forces that
threaten it. Agent: Toby Mundy, Toby Mundy Assoc. July)
Source Citation (MLA 8th
Edition)
"The Billionaire Raj: A Journey Through India's New Gilded Age." Publishers Weekly, 23 Apr. 2018, p. 74.
General OneFile, http://link.galegroup.com/apps/doc/A536532922/ITOF?
u=schlager&sid=ITOF&xid=5ccb9a8b. Accessed 13 Aug. 2018.
Gale Document Number: GALE|A536532922
Quoted in SidelightsL “In profile after carefully observed profile, Crabtree, a former Financial Times Mumbai correspondent, shows us rich men lolling in their habitat. The effect is as off-putting as one might expect.” “there has never been a better time to examine the deep links between India’s rich and powerful.”
“requires a more critical examination than Crabtree is willing to give.”
‘The Billionaire Raj,’ by James Crabtree
By Sonia Faleiro
Aug. 10, 2018
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James Crabtree
Photo: Charmaine Wu
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“The Billionaire Raj”
Photo: Tim Duggan Books
Roughly 400,000 Indians visit Britain every year in an exodus that generally goes unremarked. But in March, one man’s arrival at London’s Heathrow airport made the news. That man is diamond merchant Nirav Modi, once a jeweler to the stars, now a fugitive at the center of a $2.2 billion fraud. Modi’s flight may have been influenced by drinks baron Vijay Mallya or cricket baron Lalit Modi (no relation), both of whom had earlier decided that luxurious living in London suited their temperament better than a jail cell in India, where they were otherwise headed on charges of corruption and fraud.
Such sordid rich men and their political accomplices are the focus of James Crabtree’s first book, “The Billionaire Raj,” which, although it reads like a series of profiles, is a timely primer on India’s contemporary economic history.
The book inevitably starts with Mukesh Ambani, India’s richest man, who lives in a 27-story, 400,000-square-f00t behemoth where he hosts parties at which film stars dance for guests. At one such extravagance, writes Crabtree, guests “were taken up in lifts with live butterflies fluttering around inside.” In one of the world’s most unequal countries, where the top 1 percent owns more than half of national wealth, this is a startling display of arrogance. As a fellow industrialist put it, it’s “what revolutions are made of.”
The Billionaire Raj
A Journey Through India’s New Gilded Age
By James Crabtree
(Tim Duggan Books; 408 pages; $28)
In profile after carefully observed profile, Crabtree, a former Financial Times Mumbai correspondent, shows us rich men lolling in their habitat. The effect is as off-putting as one might expect. From the gilded privilege of a Regent’s Park mansion with golden bathrooms, Mallya moans about being the victim of a witch hunt. A polo-playing billionaire boasts a custom wardrobe with the surely unintended effect of making him look a little like a “Bond villain.” A Bentley-owning financier belches his way through a meal, gibbering about “markets (being) like women.”
Crabtree is an elegant stylist, skilled at accumulating the vivid details that bring a story to life. However, he is unable to give us more information than his subjects have earlier given others. This is, of course, the risk one runs when writing about people whose business is built on secrecy. The already public nature of what the author has to say may give some readers a sense of deja vu.
Even so, there has never been a better time to examine the deep links between India’s rich and powerful. In the period from 2004 to 2014, the economy averaged growth of more than 8 percent. Prime Minister Manmohan Singh — who doesn’t get his due in this book or any other — took advantage of the unprecedented opportunity to pass landmark social welfare legislation that focused on food, education and jobs for the poor. More than 100 million people, writes Crabtree, were helped out of poverty.
The wealthy elite, meanwhile, borrowed freely from public-sector banks. They cultivated politicians who would look the other way. On the night his patron became chief minister of India’s largest state, one billionaire, notes Crabtree, “hosted a giant victory party, ferrying guests around the grounds of his mansion in a fleet of white Mercedes saloons.”
Even though corruption scandals, a public outcry and sagging growth brought an end to the free ride of a few, crony capitalism, as the author shows us, didn’t end with the fall of the Singh government. Indeed, the capture of public wealth, and the attendant subversion of democratic ideals, may well have accelerated.
A clear example is the relationship between billionaire port operator Gautam Adani and Prime Minister Narendra Modi. During the 2014 election campaign, Adani put his fleet of aircraft at Modi’s disposal, allowing him to crisscross the country at an unrivaled pace. When Modi won power — having amassed upward of $100 million in election funds — he returned the favor, taking Adani all over the world, from the G20 summit in Brisbane to the United Nations.
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This “cycle of dependence,” as the former governor of the Reserve Bank of India described it, reinforces the circle of cronyism. “The crooked politician needs the businessman to provide the funds. … The corrupt businessman needs the crooked politicians to get public resources and contracts cheaply.” The result is playing out in India right now, and requires a more critical examination than Crabtree is willing to give.
In 2016, two years after promising to spur the economy, the prime minister did just the opposite by scrapping most of India’s paper currency. The cash shortage triggered job losses, damaged the informal labor market and killed more than 100 people. Meanwhile, chaos of another kind is gnawing at the nation’s fabric. Vigilante killings targeting minorities demonized by the prime minister’s party have climbed so high that, for the first time in its history, the National Crimes Records Bureau will collect data on lynching victims.
Cluelessness on the one hand, and cruelty on the other, have virtually ensured that the gains of the boom years appear like a long-ago dream. The economy is now growing at its slowest pace since 2014.
“There is no reason why the excesses of the last decade should re-emerge,” writes Crabtree, “and turn India into a saffron-tinged version of Russia.” In fact, his book shows us exactly how this may happen. The future of democracy in India, as he writes, has never been “more critical.” If voters don’t register their protest in next year’s general elections, runaway billionaires will be the least of their problems.
Sonia Faleiro is the author of “Beautiful Thing: Inside the Secret World of Bombay’s Dance Bars.” Email: books@sfchronicle.com
Quoted in Sidelights: “While Crabtree’s book occasionally suffers from abrupt shifts in focus, it offers an excellent survey of India’s economic and political transformation. In crisp language designed for a general reader, ‘The Billionaire Raj’ provides an overview of just how India became the world’s most coveted market after its independence from British rule.”
A portrait of India’s fragile democracy in an era of financial excess
By Bilal Qureshi
August 3
Bilal Qureshi is a writer and radio journalist. He lived in New Delhi from 2015 to 2017.
Rapid high-rise construction co-exists in Mumbai with traditional ways of life and the persistence of slums. (Rafiq Maqbool/AP)
India is shining, rising, thriving and, finally, arriving. In the decades after its economic liberalization in 1991, the narrative of boundless Indian growth became a global mantra. From Davos panels to magazine covers, the technology- and services-fueled boom in the world’s largest democracy turned India into capitalism’s wildest frontier. In his new book, “The Billionaire Raj,” the Financial Times’ former Mumbai correspondent James Crabtree provides an unsettling portrait of India’s go-go 2000s. Across these pages, there are beachfront mansions, private yachts, imported supermodels and so many spectacular weddings. But instead of a raucous celebration of liberalization, Crabtree offers an exploration of the overnight ascent and dubious finances of India’s new billionaire class. Raising cantilevered skyscrapers over slums and building fortunes on graft and kickbacks, the executives profiled in the book operate with the unobstructed swagger of robber barons. Crabtree’s Indian story is a cautionary tale of globalization’s excesses and the consequences for one of the world’s most unequal societies.
(Tim Duggan)
“The Billionaire Raj” — referencing the word once used to describe India’s colonial masters — is also a portrait of a fragile democracy where the lines between politics and business have blurred to dangerous extremes. The India of today is led by a generation of “Bollygarchs” reveling in the pleasures and possibilities of rampant cronyism, financing campaigns, and even assuming political office. Crabtree’s tale opens with a chase scene straight out of the “Fast and Furious” films. An Aston Martin crashes and skids off one of South Mumbai’s busiest roadways, with its driver swept up by an accompanying motorcade and rushed behind the gates of Mumbai’s most iconic private residence, a skyscraper palace glittering above the slums below. The car at the center of the crash, worth far more than most Mumbaikars would accumulate over several lifetimes, disappears, and the identity of the driver is never resolved. Stories of scams, scandals and erased crimes follow. The Trump administration’s alleged excesses pale in comparison with the unchecked power of India’s new tycoons, enmeshed in and protected by layers of political and economic influence.
The foreign correspondent’s memoir of an adventurous, exotic posting has become a kind of publishing standard. Awed by the drama of modern India, Crabtree joins tycoons on private jets, attends lavish parties and is charmed by the eloquent elites at the forefront of South Asia’s gilded age. These chapters sometimes read a bit like repurposed articles and strung-together profiles. While Crabtree’s book occasionally suffers from abrupt shifts in focus, it offers an excellent survey of India’s economic and political transformation. In crisp language designed for a general reader, “The Billionaire Raj” provides an overview of just how India became the world’s most coveted market after its independence from British rule. Gandhi’s austere anti-colonial movement to shun materialism gave way to Prime Minster Jawaharlal Nehru’s socialist, secular vision of a highly regulated market. The decades of stagnation and political crises that followed under Congress Party rule opened the doors to the opposition Bharatiya Janata Party (BJP), a pro-business Hindu nationalist party that found a way to combine the electoral power of majoritarian populism with the mantra of red-tape-burning deregulation welcomed by the country’s business elite.
For the international reader, while the 2000s featured celebratory tomes on the possibility and promise of “India shining,” this past decade has inspired a darker library of the reality behind the gloss. Katherine Boo’s “Behind the Beautiful Forevers,” Rana Dasgupta’s “Capital” and, in fiction, Aravind Adiga’s Booker Prize-winning novel “The White Tiger” reveal the more pernicious forces of greed at play. In some of Crabtree’s strongest reporting, he zooms in on the cultural dimension of that transformation, focusing on how capitalism and communalism were braided together to fuel Prime Minister Narendra Modi’s historic victory in 2014 over the establishment Congress Party.
To students of President Trump, the cult of personality and social media savvy employed by Modi’s supporters should seem familiar. Modi arrived in New Delhi with a promise to clean up the country’s rampant corruption, but as Crabtree writes, the results have been mixed at best. The cronyism, nepotism and excesses of India’s billionaire class have continued, with newer dynasties joining the ranks of this small and powerful elite. Weak state institutions, crumbling regulations and a highly adaptive strategy for circumventing laws have left many of the government’s chronic limitations in place, despite Modi’s soaring rhetoric. Instead of extending opportunities across classes, where the BJP has been more successful is in forming a “thick identity” of Hindu supremacy. Anti-Muslim violence and fervent nationalism have boomed under BJP rule and ensured political spoils in a society where religion remains a potent force.
In a book as ambitious as “The Billionaire Raj,” there are bound to be omissions. There is too little attention paid to caste, gender and the environmental degradation facing many of India’s teeming cities, and the narration is sometimes too narrowly confined to the chandelier-strewn ballrooms of the country’s new palaces.
Crabtree suggests that the only solution to the excesses of this gilded age rests in the promise of a progressive era. Despite his reservations about the BJP’s Hindu nationalist impulse, Crabtree remains cautiously optimistic for India’s future — with a demanding list of caveats: the strengthening of banking and financial regulations, an East Asian model of manufacturing-driven growth, and drastically needed investment in health care and education. Crabtree argues that with the passing of the current gilded age into a Roosevelt-style progressive era, India could take its rightful place in the story of great Asian transformations. Whether this is even remotely possible is dealt with in the classic journalistic exit strategy akin to the elusive “only time will tell.” But the author’s first-hand journey into the dizzying heights and distressing recesses of Indian capitalism is a worthy addition to modern India’s story. It is a coming of age more complex and uncertain than globalization’s loudest cheerleaders once suggested. For now, India’s current rulers, its native-born billionaire raj, look set to maintain their reign.
Quoted in Sidelights: “this is not a book primarily about personalities. Crabtree is no Tatler hack or tabloid muckraker. Cheap credit lines and accountancy tricks, infrastructure financing and resource licensing: these are what work him up. It is testament to his skill as a writer and storyteller that the hard economics at the core of The Billionaire Raj neither bores nor overbears.”
OLIVER BALCH
Rise of the Bollygarchs
The Billionaire Raj: A Journey Through India's New Gilded Age
By James Crabtree
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In India, the Bengali writer Nirad Chaudhuri once quipped, even exceptions run into the millions. The message to anyone preparing to sit down to write a book about this diverse, dynamic, often discombobulating nation is clear: avoid stereotypes, embrace contradictions and, above all, keep a calculator close.
Nowhere is India’s mind-boggling, multi-zeroed exceptionalism more in evidence than in the growing ranks of its billionaires. At the last count, the members of the ten-figure plutocracy numbered 119, with one new arrival joining the club every month or so. Their combined worth: $440 billion. And this in a country where roughly three in every five people live on less than $3.10 per day.
Wisely, James Crabtree, the Financial Times’s former Mumbai bureau chief, keeps to Chaudhuri’s advice. In a book remarkably free of moral judgement, he delves into the world of India’s ‘Bollygarchs’ with the right mix of wide-eyed fascination and cool-headed analysis. The result is a pacey and perspicacious account of what Crabtree refers to as India’s ‘new gilded age’ – a phrase borrowed from Mark Twain’s description of late 19th-century America, where, as Crabtree recalls, everything ‘glittered on the surface … but was decaying underneath’.
The Billionaire Raj kicks off with the story of Mukesh Ambani. Worth more than $40 billion, according to Forbes, this son of a petrol-pump-attendant-turned-tycoon is India’s richest man. In 2005, he began building a 27-storey apartment block in the heart of Mumbai. Equipped with every imaginable luxury (indoor cinema, rooftop bar, six floors to house his car collection, space for six hundred domestic staff, twenty-five tonnes of imported chandeliers), the building was reputed to have set him back $1 billion.
Nor is Ambani the flashiest of India’s super-rich. That prize goes to Vijay Mallya, owner of the Kingfisher beer and airline brands – or it did before his recent fall from grace. At the height of his success, the self-branded ‘King of the Good Times’ owned a Formula One team, travelled the world in a private Boeing 727 and contracted music stars like Lionel Richie and Enrique Iglesias to sing at his birthday parties. Whither Gandhi and his warnings about the ‘monster god materialism’?
During his five years reporting in India, Crabtree has had occasion to cross paths with more than his fair share of India’s super-rich. They make for a colourful cast and one that he brings to life in a style that is consistently precise and observant. And so it is that we meet Gautam Adani, the Gujarati infrastructure and energy tycoon who always holidayed with his mother until her death, and Rakesh ‘Big Bull’ Jhunjhunwala, the boozy financier with a ‘millenarian faith in India’ and a bawdy sense of humour.
But this is not a book primarily about personalities. Crabtree is no Tatler hack or tabloid muckraker. Cheap credit lines and accountancy tricks, infrastructure financing and resource licensing: these are what work him up. It is testament to his skill as a writer and storyteller that the hard economics at the core of The Billionaire Raj neither bores nor overbears.
India’s billionaires are ultimately just the public faces of a story that goes much deeper. It is a tale that, like so much in this former jewel of the British Empire, has its roots in India’s independence. Viewing private enterprise as a vehicle of colonialism, India’s early leaders eschewed free-market economics for state-dominated socialism. The arrangement lasted until 1991, when India finally ditched its hopes of self-reliance and opened itself up to the world.
Liberalisation brought foreign investors flocking in and sent the stock markets soaring. What it didn’t do was sweep away the country’s reputation for graft. In the so-called ‘Licence Raj’ of the post-independence era, making big money depended on acquiring the right permissions from politicians. After 1991, capital began to flow more freely but the politicians did not disappear from the system. The result: an unprecedented coming together of private interest and public office that has given birth to stratospheric personal fortunes and a ‘new culture of bling’.
Crabtree’s in-depth description of India’s descent into crony capitalism doesn’t just take him into the boardrooms and private jets of the mega-wealthy. It puts him on the hunt of wheeler-dealer parliamentarians and potentate state ministers. India might be the largest democracy in the world, but it is also one of the most expensive. Campaign expenditure in the 2014 election is reputed to have reached $5 billion. Politicians are never free from the ‘money power’ of their private-sector backers.
If the book has a weakness, it is in the familiarity of some of its examples. The ‘grand wholesale corruption’ that suffuses the country is well known – especially to Indians. Crabtree’s discussions of such calculator-busting scams as the illicit issuance of hundreds of mining licences and the bargain-basement sale of 2G phone rights will be met with a weary shake of the head.
Crabtree’s unique achievement is to probe the peculiarities of Indian cronyism and lay out its structural causes. There is a fascinating section, for example, on India’s southern states, which, despite being ‘staggeringly corrupt’, still manage to deliver a modicum of development for their citizens. Why? Because the politicians take their cut and leave the rest of the cake. In the north, they just scoff the lot.
Today, India finds itself at a crossroads. BJP leader Narendra Modi won office four years ago on a promise to clean up politics. Backhanders continue, of course, but the worst scams seem to have stopped. In classic Financial Times editorial style, the conclusion provides a series of recommendations to end profit-sharing among India’s elite: it is an eminently sensible list that will, for that reason, almost certainly be ignored.
Whether Modi turns out to be a Theodore Roosevelt ushering in a Progressive Era of reform or a Vladimir Putin overseeing a ‘saffron-tinged’ oligarchy remains to be seen. Crabtree, naturally, hopes for the first, as most Indians surely must too. For sheer chutzpah, India’s billionaires provide tremendous value. All this makes for a thoroughly entertaining book, but also for a sadly enfeebled and unequal nation.
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Quoted in Sidelights: “Crabtree’s vivid portrayal of the corruption of politics is very informative, and thought-provoking. He travels the country to show both how deep corruption reaches into electoral politics—but also how functional it is.”
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Meghnad Desai JULY 4, 2018 Print this page46
India is now one of the world’s economic hotspots. Stock images of starving children, miserable peasants and cheating shop owners have been augmented with those of high-tech development and booming cities. India is now the world’s fastest-growing economy. It is about to become the third-largest economy — at least in terms of purchasing power dollars if not yet real ones. Foreign investors are rushing in. In The Billionaire Raj, James Crabtree has written a compelling guide to what awaits them.
To make India more accessible to the western investor, Crabtree draws an analogy between America’s Gilded Age at the end of the 19th century — that plutocratic moment of the Vanderbilts, Goulds, Rockefellers — and the newest of India’s billionaires. Did you know that India now has more billionaires than Russia?
This sudden enrichment was the result of the long boom of globalisation from 1991-2008. India had initiated reforms to escape from four decades of conservative socialism, initiated by Jawaharlal Nehru, which did not trust private business and put the state in command. The Indian state is inefficient as it is, but disastrous in running business. Its airline Air India has racked up billions in losses; its banks are mired in non-performing loans.
In 1991, Manmohan Singh, then finance minister, bit the bullet and began to liberalise the economy. Tariffs were cut, import licensing was removed, and the rupee was devalued twice within a week. He had little choice because India had run out of foreign exchange reserves and had to pawn its gold to secure a loan from the International Monetary Fund.
The reforms took time to work but, from 1998 onwards, the economy secured high single-digit growth rates, triple the so-called “Hindu growth rate” of 3 per cent per year that prevailed during the first 30 years of independence. With a decade-long growth spurt from 1998 to 2008 came the vast fortunes generated in a crony-capitalist relationship between the ruling Congress party and its private sector clients and financiers. Crabtree, a former FT Mumbai correspondent, gives us a detailed treatment of the links between the politicians needing money to finance elections that were both costly and cheap. (The 2014 elections cost $5bn — or $6 per voter.)
A view of the new house of Mukesh Ambani © Reuters
Crabtree gives entertaining portraits of some billionaires. The opening chapters cover Mukesh Ambani and his towering residential extravaganza Antilla, the most expensive house ever built in India, which now dominates the Mumbai skyline; the fugitive Vijay Mallya, a drinks tycoon who was once known as the King of Good Times; the reticent Gautam Adani, an infrastructure entrepreneur who owns ports, mines and refineries. Dhirubhai Ambani, the patriarch of the Reliance group, figured out how to negotiate government regulations and expand his business while keeping the ruling party on his side. Mallya went so far as to be voted into a seat in the Rajya Sabha, the upper house of parliament, after a reported donation of 550m rupees ($10m in those days). Adani prospered in Gujarat with the reported blessings of Narendra Modi while he was chief minister of the state in India’s north-west, where the politician enjoyed both a clean reputation and business-friendly credentials.
Crabtree shows both how deep corruption reaches into electoral politics — but also how functional it is
Beyond the personalities lies another part of the puzzle. Corruption has gone deep in the system. Elections cannot be financed with just legally declared donations. The donors want to escape attention of the tax man, as do the party leaders. It is a symbiotic relationship. Not even Prime Minister Modi, as he has been since 2014, is about to change it, though he has moved against crony capitalism. Armed with an electoral majority, he has set about breaking the political mould, ending the near 70-year hegemony of Congress. He has sundered the crony ties that the top echelon of government enjoyed with the “promoters” of infrastructure projects during the Congress years. Back then the nationalised banks had to lend money to a favoured few and it was understood that the money would not be repaid. No more. Insolvency procedures have been toughened. Debtors can no longer shield their assets from creditors. It was this that sent Mallya abroad.
This book was written before these drastic changes. But whether he wins or loses the next elections, Modi has made revival of crony capitalism difficult.
There are also other concerns. Crabtree worries over Modi’s dual persona as a development enthusiast as well as a Hindu nationalist. The fear is that this may increase intolerance towards minorities — Muslims and Christians — and disrupt peaceful economic progress.
Crabtree’s vivid portrayal of the corruption of politics is very informative, and thought-provoking. He travels the country to show both how deep corruption reaches into electoral politics — but also how functional it is. When an economy is regulated, riddled with permits needed to do business, a few palms may need to be greased. A payment — or rent, as economists call it — may be required. But the rewards are considerable. The corruption market works. It may be immoral but it is not inefficient.
It would be better if India became less corrupt. Crabtree thinks so. That would require a lot of courage and an ability to pursue radical reform. The leader who embarks upon it risks unpopularity — as Modi is now finding out.
These are matters that cannot be settled in a single book. Crabtree has given us the most comprehensive and eminently readable tour of economic India, which, as he shows, cannot be understood without a knowledge of how political India works.
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Meghnad Desai JULY 4, 2018 Print this page46
India is now one of the world’s economic hotspots. Stock images of starving children, miserable peasants and cheating shop owners have been augmented with those of high-tech development and booming cities. India is now the world’s fastest-growing economy. It is about to become the third-largest economy — at least in terms of purchasing power dollars if not yet real ones. Foreign investors are rushing in. In The Billionaire Raj, James Crabtree has written a compelling guide to what awaits them.
To make India more accessible to the western investor, Crabtree draws an analogy between America’s Gilded Age at the end of the 19th century — that plutocratic moment of the Vanderbilts, Goulds, Rockefellers — and the newest of India’s billionaires. Did you know that India now has more billionaires than Russia?
This sudden enrichment was the result of the long boom of globalisation from 1991-2008. India had initiated reforms to escape from four decades of conservative socialism, initiated by Jawaharlal Nehru, which did not trust private business and put the state in command. The Indian state is inefficient as it is, but disastrous in running business. Its airline Air India has racked up billions in losses; its banks are mired in non-performing loans.
In 1991, Manmohan Singh, then finance minister, bit the bullet and began to liberalise the economy. Tariffs were cut, import licensing was removed, and the rupee was devalued twice within a week. He had little choice because India had run out of foreign exchange reserves and had to pawn its gold to secure a loan from the International Monetary Fund.
The reforms took time to work but, from 1998 onwards, the economy secured high single-digit growth rates, triple the so-called “Hindu growth rate” of 3 per cent per year that prevailed during the first 30 years of independence. With a decade-long growth spurt from 1998 to 2008 came the vast fortunes generated in a crony-capitalist relationship between the ruling Congress party and its private sector clients and financiers. Crabtree, a former FT Mumbai correspondent, gives us a detailed treatment of the links between the politicians needing money to finance elections that were both costly and cheap. (The 2014 elections cost $5bn — or $6 per voter.)
A view of the new house of Mukesh Ambani © Reuters
Crabtree gives entertaining portraits of some billionaires. The opening chapters cover Mukesh Ambani and his towering residential extravaganza Antilla, the most expensive house ever built in India, which now dominates the Mumbai skyline; the fugitive Vijay Mallya, a drinks tycoon who was once known as the King of Good Times; the reticent Gautam Adani, an infrastructure entrepreneur who owns ports, mines and refineries. Dhirubhai Ambani, the patriarch of the Reliance group, figured out how to negotiate government regulations and expand his business while keeping the ruling party on his side. Mallya went so far as to be voted into a seat in the Rajya Sabha, the upper house of parliament, after a reported donation of 550m rupees ($10m in those days). Adani prospered in Gujarat with the reported blessings of Narendra Modi while he was chief minister of the state in India’s north-west, where the politician enjoyed both a clean reputation and business-friendly credentials.
Crabtree shows both how deep corruption reaches into electoral politics — but also how functional it is
Beyond the personalities lies another part of the puzzle. Corruption has gone deep in the system. Elections cannot be financed with just legally declared donations. The donors want to escape attention of the tax man, as do the party leaders. It is a symbiotic relationship. Not even Prime Minister Modi, as he has been since 2014, is about to change it, though he has moved against crony capitalism. Armed with an electoral majority, he has set about breaking the political mould, ending the near 70-year hegemony of Congress. He has sundered the crony ties that the top echelon of government enjoyed with the “promoters” of infrastructure projects during the Congress years. Back then the nationalised banks had to lend money to a favoured few and it was understood that the money would not be repaid. No more. Insolvency procedures have been toughened. Debtors can no longer shield their assets from creditors. It was this that sent Mallya abroad.
This book was written before these drastic changes. But whether he wins or loses the next elections, Modi has made revival of crony capitalism difficult.
There are also other concerns. Crabtree worries over Modi’s dual persona as a development enthusiast as well as a Hindu nationalist. The fear is that this may increase intolerance towards minorities — Muslims and Christians — and disrupt peaceful economic progress.
Crabtree’s vivid portrayal of the corruption of politics is very informative, and thought-provoking. He travels the country to show both how deep corruption reaches into electoral politics — but also how functional it is. When an economy is regulated, riddled with permits needed to do business, a few palms may need to be greased. A payment — or rent, as economists call it — may be required. But the rewards are considerable. The corruption market works. It may be immoral but it is not inefficient.
It would be better if India became less corrupt. Crabtree thinks so. That would require a lot of courage and an ability to pursue radical reform. The leader who embarks upon it risks unpopularity — as Modi is now finding out.
These are matters that cannot be settled in a single book. Crabtree has given us the most comprehensive and eminently readable tour of economic India, which, as he shows, cannot be understood without a knowledge of how political India works.
The Billionaire Raj: A Journey Through India’s New Gilded Age, by James Crabtree, Oneworld, RRP£18.99, 354 pages
Meghnad Desai’s most recent book is ‘The Raisina Model: Indian Democracy At 70’
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Sic transit gloria mundi Jul 10, 2018
I lived and worked in India for three years. Indians generally distinguish between efficient and inefficient corruption. The former is a facilitation fee which helps get things done. It adds to costs but is not unreasonable though it may in western eyes be unethical. An example might be a month long wait to get your internet fixed or, for a gift of around $5, the guy will come today. Unfortunately there is also a lot of inefficient corruption where money flows but results are much less certain.
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el bandido loco Jul 9, 2018
And yet most of the population lack the necessary tool to answer a call of nature in a dignified and private fashion and instead have to brave the elements (and rapists) by going by the rail tracks or the beach!
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CuriousGeorge Jul 8, 2018
The 'symbiotic relationship' between India's politicians and businessmen started with the 'tryst with destiny' back in 1946, when the Tata, Birla, Godrej, Bajaj and other families who supported the Congress-led independence movement were rewarded by Nehru & Co with the so-called 'License Raj'...resulting in a half century of state-sanctioned family monopolies of various industrial goods. It was the literally the heist of the century, with these families going on to make billions selling their shoddy products, while the rest of the Indian population languished in poverty. When liberalization finally arrived, these same families were well positioned to take full advantage, and have made billions more in collaboration with the global multinationals. While the rest of the Indian population continues to languish in poverty.
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Sam Jul 7, 2018
Indian billionaires may not look very polished but by and large they are much more mindful of Indian ethos than dodgy billionaires of many other countries. Those who have run foul of law has been found out to have poor management practices and are not systematic plunderer of nations wealth.
Tata Sons is a good example. More than 50% of their profit goes to philanthropy. Plus they don't hire and fire.
Same is true of many other Indian billionaires. None have the history of robber barons of USA or Russia who in their days didn't hesitate to take up violence to meet their objectives.
The writer hasn't a clue of what is meant by Hindu Growth rate of 3%. He needs to sit with Marwari business men and he would realize that they operated at a profit margin of 3%. It is a misnomer to say that Indian business wanted 3% growth rate.
Indian ethos is such that while wealth is coveted but excessive profit taking is considered a sin and nobody wants to go meet his maker carrying the sin of gluttony. This is true of most of the Indian business community.
Will have to give this armchair critique a miss - he is probably opinionated and doesn't understand what drives India.
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Howdy_Tex Jul 7, 2018
@Sam I’m sure if you asked the obscenely rich of any country about their ethics and their value to society, they would say they provide jobs, give to charity, and embody the nation’s values. You sound like any apologist for the obscenely rich in any country.
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Sam Jul 8, 2018
@Howdy_Tex No apology is being offered.
Different parts of the world see wealth differently, example Japan. The author's supposition that India would take the route of US robber barons of 19th and 20th century is not correct.
It is the generalization of what drives the rich in various countries on which I commented. As a society Indian have never accepted the concept of "Winner takes all". This may have forced rich in India to be more circumspect. This is also the essential difference between the Indian and US society.
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CuriousGeorge Jul 8, 2018
@Sam Oh don't be ridiculous. India's business class is as rapacious and greedy and selfish as any business class anywhere else in the world.
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O.J. Jul 7, 2018
Mutual back scratching.
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Sound of the Suburbs Jul 7, 2018
Disposable income = wages – (taxes + the cost of living)
The minimum wage = taxes + the cost of living
Maximising profit requires minimising wages.
China and India are very attractive for investment.
The West is not.
It's the basics of capitalism the West has failed to grasp.
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Sound of the Suburbs Jul 7, 2018
“Income inequality is not killing capitalism in the United States, but rent-seekers like the banking and the health-care sectors just might” Angus Deaton, Nobel Prize Winner
You are right there mate, the US is clueless.
The cost of living = housing costs + healthcare costs + student loan costs + food + other costs of living
They are having a laugh.
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Multatuli Jul 6, 2018
Not quite correct about the 1991 gold transactions.
These were conducted in parallel to the IMF loan, but were actually RBI transactions with the Bank of England and Bank of Japan.
indianexpress.com/article/explained/in-fact-how-govts-pledged-gold-to-pull-economy-back-from-the-brink/lite/
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Test85 Jul 6, 2018
This book deserves a better reviewer. NRIs who presume to know everything about changing India don't make one.
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Test85 Jul 6, 2018
Also, one of PM Modi's few original 'reform' moves has been ushering in of electoral bonds. It is the most brazen institutionalisation of electoral corruption anywhere in the world.
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Fotherington-Tomas Jul 6, 2018
To European eyes, the shamelessness and vulgarity of the super-rich in India is shocking. For want of a functioning government health system for the poorer parts of society, I believe India is the largest market for private healthcare.
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Sam Jul 7, 2018
@Fotherington-Tomas Indian health system including government is better than NHS especially w.r.t. doctor response time, waiting time etc. It doesn't look five star but it is functioning.
Which planet are you living on? By 2030, another report states that in India there will be no dire poverty. In 80 years a nation will be able to bring itself out of abject poverty and violence to which it was subjected by the British for about 100 years and whose fabric British tried to destroy as they were leaving the sub-continent.
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Fotherington-Tomas Jul 10, 2018
@Sam @Fotherington-Tomas Oh, really?
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kdr Jul 6, 2018
We will know the men from the boys after the next recession. A lot of this 'wealth', worldwide was created by asset price inflation thanks to near zero rates worldwide. That has changed.
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