Is India a capitalist country? This may appear to be a bizarre question to be asking in 2011, two decades after the beginning of the economic liberalisation process that has seen the country’s international standing transformed. When even some of the worst slums in India – such as Dharavi, a teeming mass of humanity where it is not unknown for a four-figure number of residents to have to share one toilet between them – are turning into export powerhouses with turnovers in the hundreds of millions of dollars, probing India’s capitalist credentials may appear to be the ultimate exercise in futility.
Yet a recent article in London’s Financial Times prompts a sober reconsideration: a profile of Vijay Mallya, the scion of pioneering industrialist Vittal Mallya, who has built up the family business – the United Breweries Group (‘UBG’) – into a global liquor industry behemoth. Under Mallya Jr.’s stewardship, UBG paid $857m for the marquee Scottish spirits label Whyte & Mackay in 2007, doing much to secure the group’s future supply chains; the Chairman is every inch the flamboyant and fabulously wealthy businessman, famous for his lavish parties, diamond ear studs and private aeroplane with his initials – VJM – painted in gold lettering on the engine and wingtips.
And herein lies the problem: economically, India is perhaps now more than ever a country of dualities. Those with more wealth than anyone sane can possibly quantify sit atop a pyramid where the vast bulk of the population – while not living at the level of those in Dharavi – do not possess anything like middle-class purchasing power. A 2009 report entitled India 2039: An Affluent Society in One Generation published by the Asian Development Bank illustrates how the South Asian superpower-in-waiting is evolving in a manner that suggests oligarchy:
1. About 10 families in India hold more than 80% of the shares in the largest Indian corporations, and these families wield massively disproportionate political influence;
2. Most of India’s lucrative government contracts are divided up between a handful of large corporations;
3. The bulk of India’s natural resources are also controlled by a small number of giant companies, which also vaunt ‘privileged access to land’.
Moreover, the report warns: ‘the continuation of a combination of a weak and ineffective state and more powerful and creative big business houses will inevitably lead to large-scale misuse of market power and invite a massive backlash against a market-based system…[the] concentration of wealth and influence could be a hidden time bomb under India’s social fabric’.
Therefore, while it is not necessarily incorrect to label India a capitalist country, Indian capitalism evinces a pronounced oligarchic flavour which, if unchecked, may end up throttling the undeniable dynamism that permeates the nation – Vijay Mallya included.
Mediolana 
Haves and have nots, one raj has been replaced by another. But I still have faith in India’s society versus China, mainly due to its democracy. The problem with India is that the pace of change is going to be very slow for many of its citizens as well as the obvious size of the society that is to be transformed.
India’s relatively open political system is probably its biggest advantage with respect to China. However, India has certain cultural attributes which arguably entrench and normalise severe inequality, and these will take some shifting.
Let us not forget that there are many social groups in India most particularly the many castes that continue to exist with values that contrast with capitalist norms, most particularly the notion of material and relative wealth.
I would argue that while India exhibits the qualities of a capitalist nation as a whole, these parameters appear to be restricted to heavily urbanised areas e.g. Mumbai, Delhi, which are the epicentre of outsourced call-centres and manufacturing industries, while rural villages outside of the main cities continue to use outhouses as sanitary facilities.
The case of Kerala, from its humble beginnings of spice trade to being a major hub for the service sector (FDI, Public Administration etc) does however add to the argument that India is indeed open to more capitalist intervention.
Indeed, Clement: Kerala is the exception to the Indian rule in many respects.