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[flagged] The staggering rise of India’s super-rich (theguardian.com)
75 points by dmmalam 6 months ago | hide | past | web | favorite | 65 comments

Over time I have started to dislike long read articles. Most of the time articles all over the place and inundated with useless fillers.Stuff about length of hair or type of earphones are just fluff.

And the article confuses the message as well. For example,

In the mid-1990s, just two Indians featured in the annual Forbes billionaire list, racking up around $3bn between them. But against a backdrop of the gradual economic re-opening that began in 1991, this has quickly changed. By 2016, India had 84 entries on the Forbes billionaire list. Its economy was then worth around $2.3tn, according to the World Bank. China reached that level of GDP in 2006, but with just 10 billionaires to show for it. At the same stage of development, India had created eight times as many.

What has number of billionaires have to do with anything? As per Forbes, 100 and 1 billion are the same.

On the Nirav Modi and Mallya saga, India's bankruptcy system was broken and many times banks were in doldrums trying to recover dues. There is a new bankruptcy law which should help to smooth things out. But then the article spends too much time talking about Mallya and reduces an important piece of legalisation to a mere mention.

So, while I agree to the premise that India's rise has been astounding and corruption/cronyism is a problem, this article is not worth anyone's time.

My least favourite approach to the "long form" article is where the journalist is intent on launching into a narrative without making clear in the leading paragraphs what the real subject is.

I'm not a great author by any means but it just seems so self indulgent when journalists do that.

Oh fuck, yes.

And then everytime it seems they're finally getting to the meat, they jumb back to describing someone's upbringing.

> Over time I have started to dislike long read articles. Most of the time articles all over the place and inundated with useless fillers.Stuff about length of hair or type of earphones are just fluff.

Yes. That's why I love forums:

- The main points and main criticisms are probably presented by someone.

- Many people comment. Thus one is not limited to the presentation of the journalist.

Forums are a proxy for the article, someone has to read the article. You may like Reddit.

Yes. I like Reddit.

India isn't just rich in the general top 1% argument sense. India's upper middle class is quite rich. And more importantly invisible and hides everything. This has been possible largely due to a combination of real estate prices going up due to urbanization, conservative spending and a rich investment driven culture.

The other factor is gold savings. Most families have a large amount of it, and provide good insulation against inflation.

Pretty much bulk of India's middle class got rich in the post 1992 era, when the market were opened up making it easy to do business. The software riches came due to US money flowing in, the salaries were high. And most people got to travel abroad. And given foreign exchange factor most people made a killing till 2005. Back then it was easy to get US visas and work there. The dollar paid 35 rupees a piece and land prices in most Indian metros(especially Bangalore) were quite cheap. People who bought lands anywhere in peripheral Bangalore have seen their wealth increase by crazy factors.

The other factor is again opening up of mass private sector hiring, subsequent growth in economy and the stock market.

And lastly of course, corruption, nepotism and dowry market.

Is the real estate market still good? I have family abroad and want to invest.

Not good. I've been tracking the prices in Mumbai which has the most expensive market with the least supply in India and prices have not moved since 2014. There is potential for drastic fall as per the unsold inventory which may take over 7 years to sell based on current sales numbers. The Delhi-NCR market has seen drops of 20-25% as its a much bigger market and developers do not have the financial muscle compared to the ones in Mumbai.

> There is potential for drastic fall as per the unsold inventory which may take over 7 years

I have been hearing that for the last 7 years.

Its not quite out in the open yet, but it is happening when you sit on the table and negotiate. A prime builder in the most prime location (BKC) is offering nearly 30% off on initial quote after a few rounds. There is humongous over supply in areas like Goregaon and Worli/Lower Parel. As per industry sources there is very little movement for properties north of INR50m which is essentially every apartment >=2br south from Bandra onwards. Builders like Oberoi have still not managed to sell flats which have been ready for 3-4 years in Goregaon, resulting in the recent 25% * 4 years scheme. It's a matter of time till they capitulate. Even otherwise, if they stay at old rates, they're effectively falling on account of inflation every year.

Depending on context, does the potential for an event go away when the event does not occur for a long time? Much of the time I'd say that that has no information value whatsoever, and sometimes it may actually signal worse to come. So by itself I would claim the piece of data that you mention, accepting it at face value, is meaningless.

There is also a clear change in the sales pitch. 4 years ago the pitch was about "investing". Now its about "end use". Clear sign of ending of investor fueled bubble.

Thanks everybody, you saved me a lot of money. I had completely different information about the market.

Not really. Liquidity is a major problem. Properties sit n the market for years sometimes (as my dad's) before finding a buyer at supposed market valuation (which, in my view, is highly inflated)

Residential property is overpriced and supply exceeds demand. It's unlikely prices will fall - in India people would rather hold on to property than sell at even a slightly lower price - but you would have to be in for the really long haul to realize a decent profit.

That depends on what time scales you are looking at.

Also staying Abroad and investing in India isn't a good thing to do. Sometimes there are encroachment issues.

That's only if you buy land. Not if you buy an apartment or fully constructed house.

Could you elaborate on the dowry “market”?


Basically if you are a able male with a good income and family background, you ask for top money as gifts during marriage.

Dowry is not so common among the (upper) middle class these days - with the exception of certain communities especially in Andhra/Telangana. Gifts are certainly given when the bride's side can afford it, but seldom extravagant and rarely asked for.

> Politicians spend the money to fund campaigns, but also on handing out favours, jobs and cash to constituents. “It’s sort of an unholy nexus,” as Raghuram Rajan put it to me during his tenure as head of India’s central bank. “Poor public services? Politician fills the gap; politician gets the resources from the businessman; politician gets re-elected by the electorate for whom he’s filling the gap.”

I know this will never be popular opinion, but as a citizen of a poor, developing country with widespread corruption, I sometimes have to wonder: is democracy really the best model for poor nations that don't have the foundations to foster it?

You want a layered, federated, representative democracy. Not just a democracy.

By layering and federating, you introduce noise into the system. One layer may be controlled by one party, another by another. You are purposefully introducing noise and isolating possible corruption vectors. With enough noise and isolation, each time power switches over at a node or layer, there's widespread "corruption cleaning" that mostly involves running out all the corrupt guys from the other party and setting up your own corruption that works in a different way.

Looked at another way, the system has to have a way to be wrong. If one person or one party controls everything from top to bottom (or the system stops being layered and federated), then there's no feedback loop -- and there's your unholy nexus.

Personally I'd add term limits to the mix, mainly because I think whatever the government is, it should be understandable and controllable by an average citizen. Also if you're in for a long time, it's doubtful you'll change your ways -- and there goes the feedback loop again.

You never eliminate corruption. That's a fool's game. Instead what you want is to isolate it in such a way that over time it's easy to identify and remedy.

The government at federal level is still a very "noisy" affair. The ruling coalition though enjoying significant majority in lower house is far from simple majority in the upper house which holds elections once in 6 years. You only need to watch a few minutes of a session in action to realize it is well and truly a very noisy affair.

India saw the rise of regional parties with the parallel fall of the Congress party since the 90s. There are many states now where Congress has only namesake presence. This resulted in coalition rule at the federal level which was finally reversed in 2014 when BJP came to power with simple majority (though also as part of the NDA coalition). Subsequently it won most state elections, effectively gaining power in 19/31 states/union territories. But due to the bicameral nature of Indian parliament, it is far from majority in the Rajya Sabha (Upper House, where the MPs are indirectly elected). Because of this they have not been able to introduce many legislations.

The government at federal level is still a very "noisy" affair.

Perhaps so. Perhaps not. I suspect we have different definitions of "noisy". There's also a tremendous gap between what you see in the media and how things actually work. That's one of the cornerstones of a corrupt system, sadly: the impenetrable nature of trying to observe it from the outside.

I wish you the best of luck. My advice is to acknowledge human nature and create systems that work with it. These systems tend to be the ones that are able to adapt and thrive over time.

I completely agree with your POV. Hoping corruption will go away is a fool's game indeed. Just trying to highlight that compared to US system of 2 party rule, India is a true multi party system since the 90s (from a faux one earlier when Congress dominated). The BJP lead coalition appears to be reversing this but its dominance is still far below the levels enjoyed by Congress from 1947 to late 80s. And there is good possibility of its dominance reducing starting from the state elections scheduled later this year.

I think you've got a fair point. But democracy is the least worst system of government that we know of. This idea has been around for a long time. I know the Churchill quote 'Democracy is the worst form of government, except for all the others.' Apparently he said this in the 1940s but he attributed it to some earlier source.

Modern well established democracies have just had a longer time to refine the system to a slightly less shitty version of the democracy that come before them.

So you might be right, but I wonder if it's the journey that matters? Ie is it that countries have to go through the process in order to get to a better place? So you can't just drop a democracy system from another country in place somewhere, and hope that it works. That of course doesn't mean you shouldn't learn from the mistakes of others.

I dislike the term "democracy". The correct term that characterizes the western systems (such as the US) is "checks and balances". Having multiple check and balances is the best way to limit corruption, having general elections is a very poor proxy. Just see how many countries have general elections (and so can call themselves "democracies") and are ruled by a president for life.

>I know this will never be popular opinion,but as a citizen of a poor, developing country with widespread corruption, I sometimes have to wonder: is democracy really the best model for poor nations that don't have the foundations to foster it?

I actually think you have a very valid concern. As Churchill once said "Democracy is the worst form of government, except for all the others." ( I know it isn't Churchill who said it first, but let not derail the topic )

As someone who has lived in Representative Democracy, Direct Democracy, and Authoritarian countries, My only conclusion is, none of the above form of government matters as much. What is much more fundamental, in every form of government is well educated, and well informed people. They need to be taught to think independently, and critically, to make values of things, to make a judgement, and (much) more importantly, to learn from the mistakes if they did make a wrong judgement. Education is the key and possibly the only key to political and society progress. Once we have that, any form of Government will work, as ultimately the power of Government comes from People, even Authoritarian.

That is of course ignoring capitalism sneaking through, where human greed are maximised. Where Education isn't about teaching the basics of thinking and values, but skills set that you are required to get a job.

Democracy depends on the knowledge and understanding of the people (demos).

General mistrust regarding the media and politicians is required. E.g. the weird behavior of the top UK politicians in the Skripal case, the lies related to the war in Iraq, the war in Libya, the war in Syria.

Understanding the basics of science is important too. If you believe in working cars then you should believe in climate warming and the need for urgent change too because the involved science is basically the same.

Understanding of non-classic or modern or progressive economics is important too.


What's the alternative? Enlightened dictatorships are even worse. Sure, they work for a while, but at some point family ties override everything and you end up with Dumbo as chief of state when his brilliant parent dies.

Counter point: singapore.

Singapore might be a flawed democracy, but it still is one. The ruling party does fear losing vote share in elections and adapts its policies to win public support (e.g. in the 2011 elections when the opposition won 40% of the vote).

During its forming it was essentially a dictatorship

Even Singapore's founder/dictator said that Singapore style government wont work in huge country like India with its different religions, languages, cultures etc.

I do know about Singapore. Feel free to point out another 5 examples from the entire history of mankind, all 5000 years of it, all across the world.

Oh, to clarify, I want a longer time frame. I want a autocratic regime which didn't hit the "Dumbo peak" within 1 century, +/- 20 years. Heck, even Singapore doesn't qualify, their system has been up for only about 60 years. They still have about as many years to hit a dud.

I'll wait :)

This is a silly argument. Every regime has an arch and succumbs to corruption eventually. "Works for a while" describes every regime in history of mankind.

Why would it be silly? The whole point of democracy is to prevent that decay...

Or are you assuming that democracy naturally devolves into a corrupt regime? I doubt it. It seems to be the exact opposite: stable, long term democracies are the most resilient ones.

>Or are you assuming that democracy naturally devolves into a corrupt regime?

All governments regardless of their nature or intent devolve into corrupt regimes over time. The nature of government - authority through a monopoly on violence and coercive taxation - makes corruption, authoritarianism and collapse inevitable.

Gardens also degrade. That's why we invented gardening, checks and balances and reforms.

But what happens when your children inherit the garden, or their children? Maybe after a couple of generations, they no longer think a garden is worth the effort, and don't bother pulling the weeds. Maybe they hire someone to manage the garden for them, or maybe they just pave the whole thing over altogether.

Checks and balances only work when both the people insist on them and the government recognizes them. But in a democracy, people can be convinced to vote against their own interests, to vote out checks and balances or vote in autocrats or extremists, or to simply not care to stop power concentrating or collaborating where it shouldn't.

This discussion boils down to: I think democracies are our best option. What's your alternative?

>I think democracies are our best option. What's your alternative?

Given a choice between statism (a monopoly on violence) and anarchy (a free market of violence), I would more trust a democratic form of a monopoly on violence, so I would agree... at least that democracy is the least worse option, depending on what you want.

But I also believe democracies tend to devolve into autocracies the larger and more complex they become and the more abstracted the machinery of power becomes from the voters, so I would add a caveat that democracies when limited in their scope and power are the best option, and that one should expect that, inevitably, the entire thing will rot on the vine and have to be done away with entirely.

Although I wouldn't go as far as Thomas Jefferson and say a democracy should have a revolution every 20 years, I think the concept of a regular (nonviolent) "reset" in order to keep government from growing too removed from the will of the people is worth considering.

How many long term democracies are there? If you mean US and not see corruption (which is only getting worse) then you are paying very poor attention. The US is an oligarchy at best and a fascist state (and no I do not mean Trump) at worst.

Democracies are not only direct, they're also representative. Also, no plan survives contact with the enemy, I'm not talking about Utopia here. The US is absolutely a democracy, as one manifests itself in real life. So is the UK, France, the Scandinavian countries, Australia, Canada, New Zealand, etc.

All of which are young. Saying singapore does not count while they do is cherry picking. The US if you count the time of slaves and when only white men could vote as a democracy is the oldest and arguably one of the most devolved and corrupted. So your argument for better stability is weak. The case for the US such as it is to be in its last days is quite strong.

Yes? I think it’s the habits of being a democracy, checks and balances, informed citizens, independent police and judiciary - that make a working system.

But if you are never allowed to build that, then what ?

I hold an even more unpopular opinion - socialism doesn't help the poor which it actually tries to. Take a look at how China, Russia and even India's elite have amassed wealth. Purely through a socialistic system which is supposed to help everyone by giving too much power to a handful of people.

To paraphrase someone on HN - laws tend to made for David to fight Goliath. But with time Goliath comes to understand the rules and uses it to shut down the Davids.

I believe this is the comment you are referring to:


This is an evergreen story. Regulations sold as weapons for davids to defend against goliaths are instead used by goliaths to fend off davids. It turns out that Goliath can learn to use a sling too, and can hurl bigger stones with it. This is why goliaths like regulations so much, and why patents may be more disease than cure.

Yes, thank you. Tried to find the relevant article using algolia but couldn't remember the exact thread.

FYI: I used algolica and limited the search to comments in the past week and searched for the term "davids" (without quotes).

It depends on how you define and view "socialism". It seems to me most US citizens have a vert different view on socialism then everyone else from CommonWealth countries.

Chinese style governance is undisputedly better.

Even I have thought this for a while and India in it's current state has been a good example of a failed democratic state. While dictatorship cannot be the answer, I wonder if we should have some other alternatives mode of ruling too.

Without imposing 40% https://en.wikipedia.org/wiki/Inheritance_tax India cannot solve Poverty/Corruption/Crime/Unemployment/Underemployment

>> India in its current state has been a good example of a failed democratic state.

That's too big a thing to say! Please elaborate more.

When votes can be easily bought by the politicians, the power resides with wealthy and few. Religion and caste still play very important role in politics. Outsides won't understand and insiders fail to accept the truth. Because democracy is considered to be "untouchable" just like religion.

What makes England (London specifically) a desired locations for all the financial fugitives? I don't hear these kind of cases for any other country.


It's got remittance basis taxation which is very easy going on rich foreigners compared to say Paris or New York, and it's low crime so they don't get kidnaped and the like. And there's a large community of Indian, Russians and many other nationalities unlike say Monaco. Good for flights too.

It's where they keep their money. The can go to the UK and live like kings with access to the money they've stolen. They can't do that in other countries.


Switzerland is also famously attractive to that demographic (generally, don't know about Indians specifically).

Not surprising to see such an article in Guardian, known for its left of center leanings. Most of the billionaires in India have public listed companies, and have multiplied their wealth with the resultant growth in the stock markets, hence also contributing to wealth of investors. India's stock market is far superior and far open, to the ones in China, helping in faster monetization of their business. I do remember reading here about the crazy patterns in stocks in China last year, hitting the circuit every day for weeks and months, because they were allowed to list at a much lower value with very low circuit breakers, growing at 5% everyday like clockwork. The same happened in the opposite direction earlier this year and the Chinese market regulator actually stopped trading in many stocks trying to prevent their fall.

The much maligned demonetization exercise carried out in end 2016 had at least one major positive - people started putting their money into mutual funds rather than buying gold. The size of Indian funds has grown manifold since then, and their contribution has bypassed that of foreign funds. With growing number of people entering the middle class with disposable incomes, this is only going to go up.

As for the people like Nirav Modi and Vijay Mallya, an Insolvency and Bankruptcy code was introduced in 2016 which has started showing results. Previously banks would spend years trying to get loans back from defaulters with very little coming back. This law allows quick bankruptcy and sale of assets while they still hold value.

There is certainly no harm in rise of billionaires if there is reasonable trickle down effect. And comparing the numbers with China is a bit apples to oranges as its a far more closed society with potentially many more unknown billionaires in the ranks of the Communist Party.

Wealth inequality is always the problem.

There is no Inheritance Tax in India;

1% people in India cannot own 60% wealth unless they're running Pyramid schemes https://qz.com/843902/1-of-indians-now-hold-nearly-60-of-the...

When will the Brahmin-Bania hegemony end?


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