London calling

Indian billionaires love London, so much so that it has become their second home. These billionaires include not just the fugitives who feel safe in the city, but also those who own mansions and high-end stores there

India is a poor country of rich people. This is not a mere cliché. Last week, India became the sixth largest economy, but in per-capita terms, it remains a poor country. World Bank figures show that India ranks 112th out of 164 countries, with $1,670 per capita income in 2016, compared to that of $5,350 on purchasing power parity (PPP) basis.

This contradiction gets even deeper as a country of 1.3 billion people, which is relatively poor, has 119 Indian billionaires in dollar terms – that’s next only to the US and China. This fault line, no points for guessing it right, is due to the maldistribution of wealth, with the top 10% of income earners now taking home 55% of the national income. Mukesh Ambani recently became the richest man in Asia with net worth of $44.3 billion, according to Bloomberg Billionaires Index.

Many of Indian or Indian origin billionaires seem to love the city of London. It’s perhaps not the colonial hangover, but the English language that makes this city an attractive venue for a second home. And Indians, particularly the rich, don’t play second fiddle, in fact they dominate the economic life of the city. Over 40 Indian-origin people have been included in the ‘2017 Sunday Times Rich List’. Hinduja brothers with an estimated fortune of £ 16.2 billion are the richest, with a rise of £ 3.2 billion in their fortunes in 2016.

Then there’s Prakash Lohia £ 3.97 billion); Anil Agarwal (£ 2 billion); Sunil Vaswani £1.97 billion); Bobby and Robin Arora (£1.92 billion); Navin and Varsha Engineer’s pharmaceuticals business at £107 is 1.2 billion; and hotelier Jasminder Singh.
Add to this list, the rich and the famous. Anurag Dikshit, guilty of breaking the laws governing online gaming in the United States, still runs a trust which funds projects to further medicine, education and the community in India, Gibraltar and the UK. And then there are these big names, like Lord Swaraj Paul, Lakshmi Mittal, Savitri Jindal who is the wife of Om Prakash Jindal living in Kensington; last not the least Vijay and Bikhu Patel, founder of Waymade.

London is a mecca for wealthy Indians and is also a cocoon of luxury. They love the city where they live life kingsize. Many of them are billionaires and live in palatial mansions, own high-end stores, designer outlets, restaurants, and hotels.

Indian billionaires seem to feel safe there. The rich fugitives find home in London when evading the authorities in India. The mascot of ‘good times’, Vijay Mallya, is seen being hounded on the streets of London, with the media demanding answers to their questions. In its latest editorial, Shiv Sena mouthpiece Saamana wonders whether fugitive loan defaulter Mallya who is a well-known figure in London (not for all the wrong reasons), is BJP’s brand ambassador. A Delhi-based writer from UK explains, “Mallya personifies a billionaire in London, with his hairdo, his famous parties, a castle in Scotland, a country house in Berkshire and a London house.”

“I have been accused by politicians and the media of having stolen and run away with `9,000 crores that was loaned to Kingfisher Airlines,” Mallya wrote in his open letter. His case had become “lightning rod for public anger” over the alleged misbehaviour of his fellow tycoons. Not just Mallya, another fugitive billionaire is residing in London now. Nirav Modi was seen “pacing through Soho”, as stated in a report by Guardian.

But when compared to billionaires from other countries, particularly the developed world, the aggregate net worth of Indian billionaires is comparatively less than their Western counterparts. For instance, on an average, a Swiss billionaire is far richer, and Indians are not even half of that of Chinese, though this year India will be the world’s fastest-growing major economy.

The fact that India is a poor country of rich people has become a stronger reality since the liberalisation of the economy in 1991 under the leadership of PV Narasimha Rao. A research paper by Aditi Gandhi of Delhi’s Centre for Policy Research and Michael Walton of Harvard University points out a positive association between growth and self-made billionaire wealth, but a negative one with inherited wealth. “…self-made wealth is more likely to be associated with aggregate economic dynamism,” they argue.

Ambanis are a notable exception to this trend.

Another contradiction is that though the economy has done well, and people have become billionaires at an unprecedented pace, Indian banks have been left holding at least $150 bn of bad assets. Many of the billionaires are responsible for this sorry fact.

“In the last two to three decades, this has bred both impressive business dynamism and even more impressive accumulation of extreme wealth in India. 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,” question Gandhi and Walton in their paper.

“The main danger with extreme inequality is that if you don’t solve this through peaceful and democratic institutions then it will be solved in other ways… and that’s extremely frightening,” as French economist Thomas Piketty has warned against about tensions between the rich and the rest. That may or may not happen, but what’s certain is that Indian billionaires will continue to enjoy the English summer.

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