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 