7 ms·

The staggering rise of India’s super-rich

75 points by dmmalam 8y ago

kamaal 8y ago
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.
- hkmurakami 8y ago
  Could you elaborate on the dowry “market”?
  - kamaal 8y ago
    https://en.wikipedia.org/wiki/Dowry_system_in_India https://en.wikipedia.org/wiki/Dowry_system_in_India Basically if you are a able male with a good income and family background, you ask for top money as gifts during marriage.
    - hiyer 8y ago
      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.
- mockingbirdy 8y ago
  Is the real estate market still good? I have family abroad and want to invest.
  - kamaal 8y ago
    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.
    - hiyer 8y ago
      That's only if you buy land. Not if you buy an apartment or fully constructed house.
  - sidm83 8y ago
    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.
    - sumedh 8y ago
      > 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.
      - ItsMe000001 8y ago
        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.
      - 8y ago
known 8y ago
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-countrys-wealth/ https://qz.com/843902/1-of-indians-now-hold-nearly-60-of-the...
known 8y ago
When will the Brahmin-Bania hegemony end? https://www.livemint.com/Leisure/3u2QUPuXBEFPaBQXU2R8mJ/When-will-the-BrahminBania-hegemony-end.html https://www.livemint.com/Leisure/3u2QUPuXBEFPaBQXU2R8mJ/When...
sidm83 8y ago
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.
throwawayqdhd 8y ago
> 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?
- oblio 8y ago
  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.
  - rapsey 8y ago
    Counter point: singapore.
    - rueynshard 8y ago
      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).
      - rapsey 8y ago
        During its forming it was essentially a dictatorship
    - oblio 8y ago
      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 :)
achow 8y ago
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. https://economictimes.indiatimes.com/news/politics-and-nation/list-of-14-fugitives-given-to-uk-again/articleshow/62516856.cms https://economictimes.indiatimes.com/news/politics-and-natio...
- ido 8y ago
  Switzerland is also famously attractive to that demographic (generally, don't know about Indians specifically).
- slivym 8y ago
  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. https://www.chathamhouse.org/publications/twt/london-money-laundering-capital https://www.chathamhouse.org/publications/twt/london-money-l...
- tim333 8y ago
  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.
thisisit 8y ago
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.
- gepi79 8y ago
  > 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.
  - DEADBEEFC0FFEE 8y ago
    Forums are a proxy for the article, someone has to read the article. You may like Reddit.
    - gepi79 8y ago
      Yes. I like Reddit.
intended 8y ago
Wealth inequality is always the problem.

75 points by dmmalam 8y ago

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.

hkmurakami 8y ago
Could you elaborate on the dowry “market”?
- kamaal 8y ago
  https://en.wikipedia.org/wiki/Dowry_system_in_India https://en.wikipedia.org/wiki/Dowry_system_in_India Basically if you are a able male with a good income and family background, you ask for top money as gifts during marriage.
  - hiyer 8y ago
    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.
mockingbirdy 8y ago
Is the real estate market still good? I have family abroad and want to invest.
- kamaal 8y ago
  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.
  - hiyer 8y ago
    That's only if you buy land. Not if you buy an apartment or fully constructed house.
- sidm83 8y ago
  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.
  - sumedh 8y ago
    > 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.
    - ItsMe000001 8y ago
      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.
    - 8y ago

known 8y ago

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-countrys-wealth/ https://qz.com/843902/1-of-indians-now-hold-nearly-60-of-the...

known 8y ago

When will the Brahmin-Bania hegemony end? https://www.livemint.com/Leisure/3u2QUPuXBEFPaBQXU2R8mJ/When-will-the-BrahminBania-hegemony-end.html https://www.livemint.com/Leisure/3u2QUPuXBEFPaBQXU2R8mJ/When...

sidm83 8y ago

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.

throwawayqdhd 8y ago

> 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?

oblio 8y ago
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.
- rapsey 8y ago
  Counter point: singapore.
  - rueynshard 8y ago
    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).
    - rapsey 8y ago
      During its forming it was essentially a dictatorship
  - oblio 8y ago
    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 :)

achow 8y ago

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. https://economictimes.indiatimes.com/news/politics-and-nation/list-of-14-fugitives-given-to-uk-again/articleshow/62516856.cms https://economictimes.indiatimes.com/news/politics-and-natio...

ido 8y ago
Switzerland is also famously attractive to that demographic (generally, don't know about Indians specifically).
slivym 8y ago
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. https://www.chathamhouse.org/publications/twt/london-money-laundering-capital https://www.chathamhouse.org/publications/twt/london-money-l...
tim333 8y ago
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.

thisisit 8y ago

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.

gepi79 8y ago
> 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.
- DEADBEEFC0FFEE 8y ago
  Forums are a proxy for the article, someone has to read the article. You may like Reddit.
  - gepi79 8y ago
    Yes. I like Reddit.

intended 8y ago

Wealth inequality is always the problem.