Tycoon tower: the 27-storey Antilia, Mumbai residence of Reliance Industries chairman Mukesh Ambani, has come to symbolise Indian wealth disparity. Photo: Getty
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Slumdog billionaires: the rise of India’s tycoons

New non-fiction books by the novelists Arundhati Roy and Rana Dasgupta examine India’s troubled relationship with capitalism and the blurred links between political and business elites. 

Capital: a Portrait of 21st-Century Delhi
Rana Dasgupta
Canongate, 512pp, £25

Capitalism: a Ghost Story
Arundhati Roy
Haymarket Books, 125pp, $14.95

Midway through India’s recent election, I watched Meera Sanyal talk at a campaign event about a crisis in her country’s system of capitalism. It seemed an odd topic, given that Sanyal spent almost her entire professional career in finance. But late last year she quit her job as a senior banker, joined the newly formed anti-corruption Aam Aadmi (or “common man”) Party (AAP), and announced plans to run for parliament in the south of Mumbai, the financial capital.

India’s troubled capitalism was a central theme of the poll, which ended on 16 May with an overwhelming victory for Narendra Modi of the opposition centre-right Bharatiya Janata Party. When voting began in early April, the AAP launched a series of attacks on the close links between India’s business and political elites, alleging that big conglomerates had received regulatory favours in return for funnelling money to the two establishment parties: Modi’s BJP and the then-ruling Congress. Yet, in trying to distil the anger felt by many at the behaviour of the wealthy, Sanyal turned not to a company, nor to an individual, but to a house: a giant residential skyscraper in Mumbai called Antilia, which belongs to the billionaire industrialist Mukesh Ambani, the richest man in India.

“You walk around the streets of this city, and the amount of rage at Antilia has to be heard to be believed,” Sanyal said, detailing allegations that the 27-storey building had been built on land owned by a local orphanage but bought for well below market rates – allegations its owner refutes. As it was built, the high-rise mansion – a vertical palace, fit for a modern maharaja – came to symbolise an Indian elite set apart. “At first I just thought of it as a terribly ugly structure, a blight on the face of Mumbai, but you see what people say about it,” Sanyal said. “It’s not good for the country when you have crony capitalism of that nature.”

Raising these concerns did little to help the Aam Aadmi’s cause: Sanyal lost easily and the party won only a handful of seats, in a result even its leaders admitted was a great disappointment. Modi, who was sworn in as prime minister on 26 May, won in part because of his own promises to tackle corruption. On the stump, he lambasted his Congress opponents for presiding over a spate of rollicking scandals as well as plummeting growth. He has since pledged action on both fronts. Yet even if he makes early progress, India faces a more profound problem, of which Antilia is just the most visible symbol: a rapid increase in national wealth that appears to be enjoyed disproportionately by figures such as Ambani and his fellow heads of family-controlled businesses, leaving behind a country that is becoming more troubled and less equal.

Such is Antilia’s status as the icon of India’s new Gilded Age that it is hardly surprising to see it pop up at the opening of Arundhati Roy’s Capitalism: a Ghost Story. Best known for her early novel The God of Small Things, Roy has become a strident political activist and critic of India’s system of government, battling for causes ranging from Kashmiri separatism to caste and environmental justice. The supposed villainy of India’s tycoon class is her latest target, as she attacks the perfidy of industrial giants such as the Tata, Birla and Jindal groups of companies – as well as Reliance Industries, the conglomerate with interests from oil refining to retail whose profits funded Ambani’s luxurious home.

Reliance “is one of a handful of corporations that run India”, Roy says, through a mechanism she characterises as “gush-up” economics, rather than the more familiar conservative, trickle-down variant. “A Gush-Up concentrates wealth on to the tip of a shining pin on which billionaires pirouette; tidal waves of money crash through the institutions of democracy – the courts, the parliament – as well as the media, seriously compromising their ability to function,” she writes. “The noisier the carnival around election, the less sure we are that democracy really exists.”

At fewer than 150 pages, Capitalism is more a polemical essay than a book, albeit one that makes a fair point about wealth. It cannot be denied that the fortunes of India’s 1 per cent are rising. By some measures, the country comes close to rivalling Russia for the concentration of financial resources in the hands of its cadre of billionaires. Yet Roy provides an uneven blast against this trend. Her style is grating, especially her fondness for capitalised sloganeering – “the Gush-Up Gospel”, “the Privatisation of Everything”, and so on. The procession of the book’s argument is curious, too, moving from commentary on the tycoons into detours attacking the role of foreign charities in India, as well as domestic companies that set up less-than-sincere corporate social responsibility projects. Of all the faults displayed by India’s business elite, these can hardly be the most severe.

Roy is equally critical of the anti-corruption movements that gave birth to the AAP over the past three years, describing the party as an essentially middle-class affair that did little to challenge corporate power. This seems hard-hearted, especially as the AAP’s leader, Arvind Kejriwal, has become the country’s most trenchant critic of business corruption – precisely the type of crime that Roy abhors.

India’s wealthy industrialists are unques­tionably powerful, but Roy’s depiction of them as wielding unbridled influence seems at best half accurate. Mukesh Ambani’s Reliance is a case in point: it operates a giant gas field in eastern India that is stuck in endless regulatory delays. Where once India’s tycoons may have been unfettered, they often seem constrained now, not least because of those same middle-class anti-corruption campaigns that Roy disdains, which have made it more difficult for business to work the political system to its advantage.

Ultimately, however, the problem with Roy’s account is her unwillingness to acknowledge any of the good that has come with India’s recent economic development: the tens of millions moved out of basic poverty, or the rising incomes spent on education, housing and food, as well as television sets and fridges. A fairer description would note that these benefits have emerged through a process that has proved wrenching, uneven and environmentally problematic, as a long-closed society opened up in two short decades.

Where Roy’s work is slight and frequently shrill, Rana Dasgupta’s Capital provides a larger and more thoughtful canvas from which to show India’s upheavals. Dasgupta moved from New York to India in 2000, having grown up in England, his journey the reverse of the one undertaken a generation earlier by his father, who left a precarious life in his home country to become a professionally successful immigrant in Britain. Capital is also the author’s first work of non-fiction, after one previous collection of stories and a novel.

Dasgupta’s concern is partly geographic, because he moved to New Delhi, India’s most sprawling metropolis. Here, empires have come and gone, from Mughal courts and British colonialism to Nehruvian autar­chy. Yet in the past decade there has been an especially forceful tearing down and refashioning as a swift but muddled growth-fuelled expansion has taken place. Capital is equally concerned with the psychological effect of these changes and more broadly with the tide of money that has flooded through the country since the liberalisation of its economy. This has left its upper middle classes in particular suffering from a kind of developmental vertigo, which Dasgupta describes simply as “trauma”.

Delhi is a depressingly appropriate lens through which to view modern India. As the national economy has grown, so the importance of political power, and the financial rewards for controlling that power, have grown, too. Thus, the capital has acquired a dubious double reputation. It is a locus for colossal corruption, a place where fortunes are amassed ruthlessly and efficiently by back-scratching politicians and industrialists. Yet it is also marked by inaction and decline: an Indian synonym for Washington, a place known for its useless dysfunction.

Delhi is also the most obvious focus for the brewing rage that Dasgupta sees as a response to the repeated rents in the fabric of India, a problem most starkly evident in a series of high-profile sexual attacks. “Violence against women in the changing world of post-liberalisation India came not just from a variety of uncultured misfits . . . it came from the mainstream, and from every social class,” he writes. The old family-based culture struggled to adapt to the speedy shifts in gender attitudes brought about by economic reform.

Dasgupta’s style is thickly descriptive, often devoting entire chapters to individ­ual conversations or single scenes as he journeys around the city meeting minor tycoons, troubled wives, worried hospital patients and impoverished migrants. This approach occasionally leaves his narrative feeling ponderous. Nor is he an economist, and so Capital’s interest in finance is often more sweeping than precise, leaving a sense that the book’s undeniable distaste for Indian modernity stems in part from its author’s essentially conservative concern with the inappropriate influence of money.

For all that, Capital is a remarkably ele­gant work whose rich style and sweep often brings to mind V S Naipaul’s A Million Mutinies Now, which provided a similarly engrossing portrait of pre-liberalisation urges in India during the 1980s. It is also perhaps the best-written description of India’s changing face since Suketu Mehta’s Maximum City a decade ago: a book that was a hymn to modern India’s other great and troubling city, Mumbai.

Yet, for all the financial energy of Mumbai, India’s ambitions for justice and development will be realised only through political renewal in Delhi. Here, both Roy and Dasgupta sound pessimistic, the latter occasionally echoing the views of another recent, much-discussed book on capital, by the French economist Thomas Piketty. The likes of India “missed out on international capitalism’s mid-20th century – its moment of inclusiveness and hope”, Dasgupta writes. He suggests these places now have little prospect of rescuing citizens scarred by their nation’s dizzying transition.

This conclusion may be too gloomy. For all Delhi’s dysfunction, there are signs of promise in its recent anti-corruption and anti-rape movements, and the efforts of some of its admittedly flawed democratic institutions, from the Supreme Court to government auditors. That these efforts have been patchy only serves to underline what is at stake following the election. Having won, Narendra Modi faces profound choices, not only about the best way to restart stuttering national growth, but also about how to move the country on to a more egalitarian, less traumatic path to development.

In his first days as prime minister-elect, Modi spoke movingly of his plans, saying his government would “be dedicated towards the poor”. But although he is fond of fulminating against corruption, he has so far shown few signs of wanting fundamentally to reorder the broken relationship between Indian business and politics, or to curb the power of the tycoons. That does not mean that such things are impossible, however. America’s original Gilded Age was followed by a progressive era, which tamed monopolies and gradually developed a welfare state. The same things can happen in India. At one point Dasgupta notes that the country’s middle classes often try to imagine ways of improving the lot of the vast Indian underclass – only to give up, confounded by the complexity of the task. For their country, this would be the worst outcome of all.

James Crabtree is the Financial Times’s Mumbai correspondent

This article first appeared in the 28 May 2014 issue of the New Statesman, The elites vs the people

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Leader: Mark Carney — a rock star banker feels the heat

Rather than mutual buck-passing, politicians and central bankers must collaborate in good faith.

On 24 June, the day after the EU referendum, the United Kingdom resembled a leaderless state. David Cameron promptly resigned as prime minister after his humiliating defeat. His closest ally, George Osborne, retreated to the safety and silence of the Treasury. Labour descended into open warfare; meanwhile, the leaders of the Leave campaign appeared terrified by the challenge confronting them and were already plotting and scheming against one another.

The government had not planned for Brexit, and so one of the few remaining sources of authority was the independent Bank of England. Its Canadian governor, the former Goldman Sachs banker Mark Carney, provided calm by announcing that Threadneedle Street had performed “extensive contingency planning” and would not “hesitate to take additional measures”. A month later, the Bank cut interest rates to a ­record low of 0.25 per cent and announced an additional £60bn of quantitative easing (QE). Both measures helped to avert the threat of an immediate recession by stimulating growth and employment.

Since then the Bank of England governor, who this week gave evidence on monetary policy to the economic affairs committee at the House of Lords, has become a favoured target of Brexiteers and former politicians. Michael Gove has compared Mr Carney to a vainglorious Chinese emperor and chided him for his lack of “humility”. William Hague has accused the Bank of having “lost the plot” and has questioned its future independence. Nigel Lawson has called for Mr Carney to resign, declaring that he has “behaved disgracefully”.

At no point since the Bank achieved independence under the New Labour government in 1997 has it attracted such opprobrium. For politicians faced with the risk, and the reality, of economic instability, Mr Carney and his colleagues are an easy target. However, they are the wrong one.

The consequences of loose monetary policy are not wholly benign. Ultra-low rates and QE have widened inequality by enriching asset-holders, while punishing savers. Yet the economy’s sustained weakness as well as poor productivity have necessitated such action. As Mr Osborne consistently recognised when he was chancellor, monetary activism was the inevitable corollary of fiscal conservatism. Without the Bank’s interventionism, government austerity would have had even harsher consequences.

The new Chancellor, Philip Hammond, has rightly taken the opportunity to “reset” fiscal policy. He has abandoned Mr Osborne’s absurd target of seeking to achieve a budget surplus by 2020 and has promised new infrastructure investment in his Autumn Statement on 23 November.

After years of over-reliance on monetary stimulus, a rebalancing is, in our view, necessary. Squeezed living standards (inflation is forecast to reach 3 per cent next year, given the collapse in the value of sterling) and anaemic growth are best addressed through government action rather than a premature rise in interest rates. Though UK gilt yields have risen in recent weeks, borrowing costs remain at near-record lows. Mr Hammond should not hesitate to borrow to invest, as Keynesians have long argued.

The Bank of England is far from infallible, of course. In recent years, its growth and employment forecasts have proved overly pessimistic. Mr Carney’s immediate predecessor, Mervyn King, was too slow to cut rates at the start of the financial crisis and was ill-prepared for the recession that followed. Central bankers across the developed world, most notably the former Federal Reserve head Alan Greenspan, have too often been treated as seers beyond criticism. Their reputations have suffered as a consequence.

Yet the principle of central bank independence remains one worthy of defence. Labour’s 1997 decision ended the manipulation of interest rates by opportunistic politicians and enhanced economic stability. Although the Bank’s mandate is determined by ministers, it must be free to set monetary policy without fear of interference. The challenge of delivering Brexit is the greatest any British government has faced since 1945. Rather than mutual buck-passing, politicians and central bankers must collaborate in good faith on this epic task.

This article first appeared in the 27 October 2016 issue of the New Statesman, American Rage