Opinion

What makes Indians obsessed with billionaires?

Mahesh Singhi Mahesh Singhi - 17th March 2018
Indians are furious over a $1.8 billion bank fraud case involving Nirav Modi, a billionaire and the man whom Vanity Fair called (in an astonishingly poor sense of timing) “the atelier of India’s most ambitious luxury jewelry brand.”
The diamond merchant, who boasts showrooms from Mumbai to Macau, and whose ornaments have bedazzled such stars as Kate Winslet and Bollywood actress Priyanka Chopra, is accused of conniving with employees of Punjab National Bank (PNB), the country’s second largest state-owned bank, to create fake letters of undertaking against which he and his uncle were able to raise millions of dollars in loans from banks outside india.
Now, the Nirav Modi scandal has become a critical test for the government of Prime Minister Narendra Modi ahead of election season.
A key reason for the Modi's victory in 2014 was that its predecessor, the Indian National Congress, was buried under one corruption controversy after another.
This is the second time since Narendra Modi took office that a flamboyant billionaire has effectively mocked India’s legal system by running away before the law could get to him. Liquor mogul Vijay Mallya was accused of defaulting on $1.4 billion worth of loans before leaving the country in March 2016.
Beyond our anger over the flight of these fat cats, there is a deeper question for us to confront: As we are fixated by our pursuit of global recognition, are we partly responsible for celebrating structural inequities and cronyism? we began to define our self-image by how many millionaires and billionaires made it to the annual Forbes list. And here we are, literally paying the price.
This is not capitalism, but a twisted variant. It is a morally unacceptable form of crudeness that mocks the legal system, manipulates political connections and reinforces the gap between the privileged and the ordinary.
In a country where nearly 270,000 farmers have been driven to suicide since 2000, and nearly 80 percent because of an inability to repay small loans (the average value of most of these outstanding loans is about $3,000), it is criminal that millionaires and billionaires live it up as their unpaid loans suck dry the banking sector, never to return. Yet, because these men make up India’s power elite and are embedded deep within the political system, their violations are handled with kid gloves — until it blows up in our faces.
The Indian National Congress was voted out in large measure because of disgust with the cronyism that facilitated collusion between government and big business. Narendra Modi promised to change that, but he needs to shed the statism that is associated with Big Government, and make good on his promise of “minimum government, maximum governance.” Ending the nationalization of banks — a relic from Indira Gandhi’s contentious decision in 1969 — could be a start.
Otherwise, scandals such as that involving Nirav Modi will happen again — and may unwittingly rob the other Modi of some of his own political glitter


Mahesh Singhi
Managing Director - Partner,
Singhi Advisors Pvt. Ltd.


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