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As one of the world's fastest growing economies, India is experiencing a boom in the upper income classes. The number of billionaires has expanded from just two in the mid-1990s to 46 in 2012. A new research paper co-authored by Harvard Kennedy School lecturer Michael Walton examines the many factors behind the burgeoning wealth patterns in India, and the relationships between the super rich and average citizens in the country.
"The extent of wealth raises questions for India's economy and polity," the authors write. "It might be a sign of the dynamism of India's corporate sector. Or it could be problematic to have such extreme wealth amidst both continued poverty and a clearly corruptible state."
Accessing data from forbes.com, the authors reach several interesting conclusions:
"There is a real question as to whether an oligarchic business structure and a corruptible state will lead to the propagation of inequality and create distortions that hurt the growth process," the authors conclude. "This is not necessary, as illustrated by the US reform experience in the first part of the last century--though the more recent US experience with the financial crisis shows that the effective regulation of capitalism continues to be a major issue. The rise of India's businesses on the global stage can be consistent with a murky domestic scene. Which path India follows will have a powerful influence on growth, inequality and the nature of the state."
"Where Do India's Billionaires Get Their Wealth" is published in the October 6, 2012 edition of "Economic & Political Weekly." It is co-authored by Aditi Gandhi of the Centre for Policy Research, New Delhi.