Sunanda K. Datta-Ray | The glitter of India’s rich: What they owe to society
The wedding extravaganza in Mumbai which so excited the world’s media might never have taken place if a despondent Manmohan Singh, India’s finance minister in 1991, had not told the then Prime Minister that people were accusing him of selling out to foreign interests. P.V. Narasimha Rao retorted dryly: “Who would want to buy this country anyway?”
Given that background to the glamour and glitter of India’s billionaire raj, there was no reason for Mamata Banerjee to announce that she “might not have gone” to the Ambani-Merchant wedding “but the entire family, from Nita ji to Mukesh ji, has been repeatedly requesting me to attend, so I am going”.
Everyone would have assumed that West Bengal’s feisty chief minister would not have gone if all the courtesies due to her rank had not been observed. Moreover, Ms Banerjee had business in Mumbai with political allies like the Nationalist Congress Party’s Sharad Pawar, and Uddhav Thackeray of the Shiv Sena (UBT) group.
Why then the need for any kind of justification? One reason is the fashionable aversion to money that had prompted Dr Singh’s misgivings even though he took pride in abolishing wealth tax and pioneered other reforms that made it possible for an Azim Premji to emerge. The complex attitude to money is by no means confined to Indians. The Bible quotes Jesus Christ as saying that “it is easier for a camel to go through the eye of a needle than for a rich man to enter the kingdom of God”. The Quran makes a similar comment. Here, although Mohandas Karamchand Gandhi dwelt at length on the poor, and despite Sarojini Naidu’s crack about the cost of keeping Gandhiji in poverty, his incisive observations on the poor show he fully understood their aspirations.
It was this aspect of poverty that Dr Singh addressed when he talked to Michel Camdessus, the International Monetary Fund’s managing director, within hours of accepting the finance portfolio in 1991. Mr Camdessus was ready to help but insisted on a thorough time-bound overhaul of the economy with the rupee stabilised at a realistic level. His concern was understandable for the exchequer faced its second fiscal crisis in three months, largely because of the Gulf War. Foreign exchange reserves had dwindled to $1.1 billion -- just enough for two weeks’ imports. New Delhi had been considering shutting down some of its diplomatic missions and selling off embassy properties. It had asked Venezuela for oil and sent a foreign service director to Washington to seek a bridging loan. By July, the foreign debt, which stood at $20.5 billion in 1980, had soared to $70 billion. In addition, India had short-term obligations of about $4 billion.
India’s diaspora proved very different from overseas Chinese. It invested in India when the going was good but scrambled out when times changed, withdrawing $2 billion during the Gulf War and the political upheavals of 1991-92. Dr Singh’s decision to repatriate the gold that Chandra Shekhar as Prime Minister had sent to London and Tokyo had a restorative effect. He also tried to get some of the undeclared cash – 21 per cent of the GDP, meaning an annual generation of well over Rs 800,000 million ($26,700 million at the 1992 exchange rate), according to the National Institute of Public Finance and Policy -- in the parallel economy back into circulation.
The rupee was devalued by 25 per cent, and rules restricting overseas trade slashed from 850 pages to 87. Other austerity measures cut inflation from 15.7 per cent to 13. 4 per cent while structural reforms reduced the fiscal deficit from 8.3 per cent of the GDP to under 6.5 per cent. Unlike today’s BJP, the party was unstinting in its praise with the general secretary, Govindacharya, saying the Narasimha Rao-Manmohan Singh regime had “taken more radical steps in one month than past governments in 43 years”.
The sanction for these measures was dug out of the platitudinous prose of Rajiv Gandhi’s 1991 election manifesto. There were nuggets such as promises to eliminate wasteful expenditure, encourage banks to raise offshore funds, expand and strengthen the service industries, invite foreign investment and technology, build toll highways and bridges, and replace a “lethargic, inefficient and expensive” public sector with one that was “leaner, more dynamic and profit-oriented”.
If American pressure induced liberalisation, it was liberalisation that attracted American investment. Acknowledging the chicken-and-egg linkage, the external affairs ministry’s 1991-92 report noted that “India’s liberalised economic policies have opened new possibilities of a long-term mutually beneficial economic partnership with the United States”. That was India’s agenda. The reforms yielded $350 million in American investment between July 1991 and August 1992 against $650 million during the previous 44 years. Investment and collaboration proposals that were hanging fire -- some for as long as five years -- were quickly cleared. Many of the biggest US corporate giants -- IBM, Kellogg, Asea Brown Boveri, AT&T, Fujitsu and Polymer Tech -- responded to Dr Singh’s invitation. “Don’t blink,” said Coca-Cola International’s president, John Hunter, in New Delhi. “You may miss something.”
That was fine while it lasted. The point is: how was the money spent?
Amit Mitra, the economist, laments that “around 83 per cent of jobless people are young men and women… and two-thirds of educated young men and women are unemployed”. Sam Pitroda’s warning, “Temples are not going to create jobs for tomorrow. Only science will create the future”, is ignored. Some 1.3 crore Indians live abroad because they can’t get jobs at home, and are joined every month by a lakh of young Indian migrants. As for those who remain, Marion Barwell, wife of the last British barrister to practise in the Calcutta high court, regretted in her memoirs that Indian society had become a hotch-potch, “hence the startling increase of vulgarity in the entertainment world and some at least of the indiscipline amongst the young…”
Dr Singh has noticed the ostentatious vulgarity. So has Rahul Gandhi, Leader of the Opposition. India needs schools, teachers, hospitals, bridges that don’t collapse, trains that run safely. “You need an educated, healthy workforce to sustain economic development”, advises Amartya Sen. “Earn your crores by all means”, Mr Gandhi says to the Ambanis and their like. “But understand that your wealth is not yours; it belongs to the people. Take what you require for your legitimate needs, and use the remainder for society.”
