Indians have revelled in the grandiose lives of the Rockefeller’s, Vanderbilt’s and Morgan’s of the Gilded Age for ages and it gives me immense pleasure to announce that Indians by the end of this decade will have their very own Gilded Age to boast of. Ok, maybe not immensely pleased but it is a monumental something worth taking a moment to ponder over. Coming back to point, the Rockefeller’s, Vanderbilt’s, and Morgan’s have been replaced by none other than our very own Ambanis, Adanis, and Tatas, all of whom have been consolidating power across the Indian economy at an unprecedented rate. Whilst many aspects of conducting business have changed over the past century the undertones between the two periods remain jarringly similar.
Allow me a moment to explain how.
Mukesh Ambani has amassed business interests spanning energy to telecommunications to retail, all of which he dominates by market share; Gautam Adani has over the past decade built himself a shipping, minerals, power, airports, energy et al business empire, which is so impossibly vast that I myself cannot list everything in a single line; and lastly, Tata Sons has over the past century built itself into an IT, automotive, steel, and retail juggernaut amongst other many varied business interests. Yes, between the three business groups almost every nook and corner of the Indian economy has been covered, and not only is that disturbing but also a stomping ground for widespread corruption and inequality.
Just today Adani Enterprises was allotted 130 acres by the Andhra Pradesh government to set up a data centre park and on top of that, they bought a 20% stake in Cleartrip. The pace at which Adani Enterprises has transformed itself from a “big” business group to a true goliath in the Industry is unimaginable, which only makes one wonder about the Modi government’s hand in all this. Corruption and inequality will hallmark characteristics of the Gilded Age both of which have resurfaced to unheard-of levels in India.
Corruption, despite Modi’s best efforts, has remained at unsuitably high levels with a 39% bribery rate, the highest in Asia, according to a 2020 Transparency International survey. Income Inequality had been the highest in India amongst major economies like the US, UK, and China as early as 2017 according to the Wealth Inequality Database. As can be seen in the graph below, India’s top 1% have amassed wealth that is almost five times the wealth of the bottom 50%.
The numbers are far more staggering if you pay close attention to the findings of the 2020 Oxfam Inequality Report, a snapshot of which I have attached below.
The gamut of capitalism in play presently is unfathomable especially when one questions the government’s hand in all this. The government’s frequent policy changes in the E-commerce marketplace have historically coincided with major Reliance Retail business activities, Adani has gotten effective control of major and most Indian airports without the usual government red tape delay, and the Tata’s, well, they have had some massive wins too with the government like winning the lucrative Central Vista redevelopment contract without having the experience and pedigree of a company like L&T.
Since there is nothing one can do about it let’s talk about the implications of this.
For starters, consolidation of economic activities will not only strengthen but also create monopolies out of these corporations especially in sectors with little or no competition and high barriers of entry. This could mean the customer might end up paying more for goods from a theoretical point of view, but I don’t believe that it would be possible considering how the price-sensitive nature of the Indian customer could hurt the earnings of the business, which they wouldn’t want to happen. MSME companies might be the most drastically affected, though, since they could be decimated to shadows of their former selves through a bruising pricing war, which could consequentially harm the prospects of India as the economy would become dependent on the output of the few remaining large players. Not only would this make us vulnerable but moreover it could further the concentration of power and wealth in the hands of the top 1%. This could end up being the vortex that could choke the ability of the common man to upstart, earn higher and dream of becoming the next Indian billionaire in his lifetime.
But things needn’t be so dreary as the consolidation of power and wealth in the hands of the rich few could lead to greater innovation and research on their parts for the betterment of their business interests and thus, the Indian consumer. While this may sound like a long shot it is still a ray of hope to hold onto. I can confidently deem this to the dawn of the Indian Gilded Age and hope that this too ends much like how the Carnegies, Rockefellers and Mellons ended the Gilded Age by giving away all their moolah to philanthropy.