Many years later, when people look back on India under Prime Minister Narendra Modi, the unprecedented speed of wealth growth of Adani Group founder and chairman Gautam Adani must be one of the important footnotes of this era. On September 16, 2022, according to the Bloomberg Billionaires Index, Adani surpassed Amazon founder Bezos with a fortune of more than 146 billion US dollars and became the second richest person in the world. More than half a month ago, he just became He is the third richest person in the world and surpassed Mukesh Ambani, president of India’s Reliance Group, to become the richest person in Asia more than half a year ago. Before becoming Asia’s richest man, many had never even heard the name Adani, even though his Adani Group is now India’s largest airport and port operations manager, largest privately-owned electricity supplier and major coal miner , but these industries are quite “traditional”. So where did Adani’s net worth come from?
Part of India’s success?
Adani’s story is told in two ways. One side of the story: Adani’s success is India’s success. Adani was born in a middle-class Jain family in Gujarat, northwestern India. After dropping out of college, he, like many urban business-class Indians at that time, benefited from the market reform and opening-up policy implemented in India in the 1980s, and accumulated The first wealth and gradually expand the business. After the Bharatiya Janata Party (BJP) came to power in 2014, it further promoted liberalization and privatization reforms, attracted investment and supported private enterprises, and Adani’s wealth also grew rapidly. When India became the world’s fifth largest economy and one of the fastest growing developing countries, India produced more than 100 billionaires including Adani; When becoming an important partner of the United States and Western countries, Adani naturally also became a pivotal figure as the richest man in India.
The other side of the story is that, like many important consortiums from Gujarat, Adani developed close ties with BJP politicians early on. In 2002, there were large-scale sectarian riots in Gujarat. Modi, then the chief minister of Gujarat, was under huge pressure from public opinion in India and abroad. At that time, Adani publicly stood up to support Modi. After Modi was elected Prime Minister of India in 2014, Adani also used a private jet to send Modi to the capital New Delhi to take office. In August 2022, Adani also launched a hostile takeover of New Delhi Television Limited (NDTV), one of the main critics of Modi’s domestic policies. For Adani’s support, the BJP government also reciprocated. With its support, the Adani Group has become the biggest beneficiary of the BJP government’s privatization of airports, ports and other infrastructure. And Adani’s wealth really began to soar after the BJP came to power. However, Adani’s success is not an isolated case. The Ambani family, the owners of the Reliance Group, are also from Gujarat and have also received a series of special treatment due to their close relationship with the BJP government.
The Rise of the “Upstart” Consortium
The relationship between Indian politics and big capital consortia can be roughly divided into four categories. The first category is the traditional old-fashioned industrial and commercial capital groups, such as Tata, Mahindra Group and so on. Most of these enterprises are located in Mumbai, usually with a history of decades or even hundreds of years, and are mostly engaged in traditional industries such as steel, automobiles, and chemicals. They usually support the political parties they think are expected to win by setting up election funds in a more “regular” way, in order to seek follow-up policy support. However, they seldom publicly reveal specific political leanings, and have generally maintained close relations with successive Indian governments.
The second category is “unicorn companies”. They are mainly based in emerging industrial bases such as Bangalore and Hyderabad, and are engaged in high-tech industries such as telecommunications and pharmaceuticals, such as Biocon, Infosys, etc. They are the products of India’s market opening and globalization after the 1990s . These companies support the government’s market reforms, but dislike the “authoritarian style” of the BJP when dealing with companies, and are often alienated due to “lack of cooperation”, playing a relatively small role in Indian politics.
The third category is the local enterprise consortium that has grown up entirely on nepotism with local political forces. Most of these businesses themselves are run by the local ruling party or friends and relatives of the main political party, and thus gain a monopoly over the local economy, such as the Sun Group, a family business of the Tamil Nadu ruling party Dravidian Progressive Alliance (DMK). These local “local emperors” have caused many corruption and rent-seeking problems, and often become a powerful weapon for the Indian Party government to attack local political parties.
The fourth category is the “upstart” consortium based in Gujarat-Mumbai, represented by Adani Group and Reliance Group. The industries they involve are mostly capital-intensive and technology-intensive, covering everything from ports, airports, steel, new energy to telecommunications. The common feature of these industries is the high threshold, and it is easy to establish a monopoly advantage by virtue of political power. In order to establish and protect the monopoly, these consortiums will require the government to take drastic measures to suppress foreign competitors, protect the domestic market and accelerate the process of privatization; but on the other hand, they are not in favor of completely dividing India from the world, because they also need to profit in the international market. This value is highly consistent with the BJP’s policy orientation, and these “upstart” consortiums have become one of the most influential interest groups in India that can influence the government. Adani’s rapidly amassing fortune is a product of this alliance.
Modi’s government ‘dilemma’
In fact, the economic rise of the Gujarat-Mumbai consortium and the political rise of the BJP can be described as two sides of the same coin. On the one hand, these consortiums represent the demands of India’s new middle class and new wealthy class. They support privatization and are strongly uneasy in the face of competition and cultural shock from the outside world, so they are more inclined to support a business-friendly, decisive and tough protection political party. The newly emerging companies are in India’s immature market and desperately need political partners to escort their business interests. On the other hand, the reason why the BJP, which was originally extremely conservative, was able to rise rapidly after the 1990s was precisely because it responded to such demands. It almost completely rewrote its economic policy against liberalization, from a “Brahmin” The political party” became the “Brahmin-Bania (merchant)” party, which gained huge support in terms of financial resources and social influence. Today, the relationship between the BJP government and the mega-consortium has become more complicated. The BJP not only needs these chaebols to support themselves in elections, but also needs them to serve India’s overall development goals, use their capital and monopoly advantages to support the growth of infant industries and key industries that need to be protected, and use the growth of the wealth of these consortiums to grow. Endorsing their own “development” banner; in turn, these chaebols will also use their monopoly position and industrial policies to deeply bind with the interests of the ruling party and the entire industry, turning themselves into “unable to fail” enterprises, thus continuing to require the government to It invests and shelters. As a result, the relationship between the BJP and the chaebols has become an interdependence between commercial interests and political power, a contractual relationship between business and state that is new for India. Some scholars have pointed out that in this state of blurred borders, India has become a “porous country”, with politics and business infiltrating each other and inseparable.
However, the Modi government in this state will also face the eternal “ruler’s dilemma”, that is, the dilemma between sheltering interest groups and benefiting the majority of voters, because the interests of the two are not aligned, and the government Efficient choices are often not made. If, as Adani said, he is part of the story of India’s economic growth, then behind this story of cooking oil and flowers, the risks associated with the growth of wealth that depend on power are also worthy of caution.