Position before Covid 19 pandemic
The release of richest people’s lists is usually a signal for much back-slapping and triumphalism in the corporate world and its hangers on in the media. It is seen as some kind of symptom that India is doing well, people are getting wealthier, achhe din (good days) are here, although such lists are only for a 100 people (as in the case of the Forbes India list) or perhaps more (as in IIFL Hurun list), in a country of 1.3 billion (130 crore) people.
But these lists also reveal another side of the super wealthy corporates of the country. A comparison between the Forbes India richest people’s lists of 2014 and 2019 reveals which of the corporate honchos have flourished under Narendra Modi’s rule and which have not done so well.
Before going into the individuals, it should be noted that the total wealth of the top 100 richest Indian corporate heads increased from about Rs.25 lakh crore to over Rs.32 lakh crore between 2014 and 2019. That’s a 31% increase. The wealth of just these 100 people in 2019 is about 6% of the country’s GDP (gross domestic product). This is a measure of the high degree of inequality in the country that just 100 people own so much wealth while the vast bulk of India’s people have only a very small fraction of it.
Who has Flourished Under Modi?
Coming now to the rather curious case of individual growth among corporates, it turns out that the richest person in India, Mukesh Ambani, has more than doubled his wealth. It has increased by 118%, to be precise, from Rs.1.68 lakh crore to Rs.3.65 lakh crore between 2014 and 2019.
In Gautam Adani’s case, the rise has been better. His wealth zoomed up by 121% from Rs.50.4 thousand crore in 2014 to a breath-taking Rs.1.1 lakh crore in 2019. He climbed up from the 11th place in the 2014 rankings to becoming the second richest man in India in 2019.
Both these illustrious men are known to be quite friendly with Prime Minister Modi and the ruling dispensation. Modi had even appeared in a full-page advertisement for the launch of Jio, the Reliance telecom service, which has, in three years, the largest subscriber base in India.
Adani’s association with Modi dates back to the days when Modi was the chief minister of Gujarat. But it was Modi’s elevation to New Delhi that marked a phenomenal upswing in Adani’s fortunes.
A noteworthy trend that has emerged in recent years – which may have some relevance to wealth creation – is the growing bonhomie between the Rashtriya Swayamsevak Sangh (which is the mentor of the ruling Bharatiya Janata Party) and corporate bigwigs. Only a few days ago, Shiv Nadar of HCL was the chief guest at the Foundation Day of RSS at Nagpur. A few days before that, Azim Premji of Wipro visited the RSS headquarters and met Sangh supremo Mohan Bhagwat. In April 2019, Ratan Tata had visited the RSS headquarters to meet Bhagwat. In fact, last year, Tata Trusts donated Rs 100 crore to Nagpur’s National Cancer Institute run by an RSS-affiliated trust named after Dr Aabaji Thatte, the personal assistant of second RSS chief M S Golwalkar. In 2017, ONGC, a premier public sector undertaking too donated Rs.100 crore to the hospital. Last month, Rahul Bajaj visited Smruti Mandir to pay tributes at the memorial of RSS founder K B Hedgewar at Nagpur.
Corporate India doesn’t kowtow to anybody unless they envisage some benefit. This increasing closeness of corporate honchos to the RSS, so much so that they have been making a beeline to Nagpur to pay respects to the founder and to confabulate with the current chief, is their way of extending support to the Modi government and generally be in its good books. (Newsclick 13-10-19)
On the other hand, with unemployment at a 45-year high, poor health—42 infants per 1,000 still die before turning one—and low levels of education—an average person has attended school for 6.3 years—India’s demographic dividend was at risk, according to an India Spend analysis of data from the United Nations Population Fund (UNFPA) and the Indian government, and research from the Reserve Bank of India (RBI). India also ranked 102 out of 117 countries in global Hunger Index. India accounted for a quarter of the world’s hungry people and was home to over 190 million undernourished people. Incidence of poverty was at nearly 30 per cent. India ranked 114th out of 132 countries on under-5 stunting and 120th out of 130 countries on under-5 wasting and 170th out of 185 countries on prevalence of anaemia. Anaemia continued to affect 50 per cent of women, including pregnant women, and 60 per cent of children in the country,” said the Food and Agricultural Organization (FAO) note on India.
(Reference: Business Standard 23-08-19, Frontline 22-11-19)
Situation during Covid 19 pandemic
After imposition of lockdown in last March end, the wealth of Mukesh Ambani has increased by Rs 90 crores per hour. This is as per latest IIFL Hurun list. According to Forbes’s list, the net wealth of Gautam Adani has increased by Rs 71, 540 crores. The Chart below would give the latest picture (as on 8 October 2020)
This stupendous rise in wealth has taken place when GDP was down by 23.5 % in April-June this year and predicted by RBI to contract by 9.5% at the year end. 2.1 crore people have lost jobs in organized sector. An estimated 12.2 crore people have lost their jobs. An estimated 6 crore Indians out of 60 crores who go to work (or one in 10) were stated to be at the risk of losing their jobs before break of autumn. MSMEs were facing existential crisis, with revenue falling by 17-21% as estimated after June end. About 84% of Indian households saw their incomes fall and many were threatened of not surviving much longer without assistance, a study showed.
Name Source of earning Wealth increase this year Net wealth
(Rs in crores) (Rs in crores)
Mukesh Ambani Reliance Industries 2, 05, 130 6,33, 640
Gautam Adani Adani Group 69,934 1,52, 570
Aziz Premzi WIPRO 31,098 1,64,980
Shiv Nadar HCL 40, 588 1,52, 570
* net wealth is calculated by taking into account current sale value of all shares in hand plus salary and movable /immovable properties like car, real estate etc.
$ I USD+ Rs 73 (Source: Bloomberg Billionaires Index)
(Reference: ABP 13-10-20, CRISIL 30-06-20, India today 23-08-20, Hindustan Times 16-05-20)