The wealth of crony capitalists in India has reduced from 18% of GDP in 2008 to 3% in 2016, according to a study conducted by The Economist. The Indian government has "got tough on graft", and the Reserve Bank of India has "prodded state-owned lenders to stop giving sweetheart deals to moguls", the English weekly said. Indian billionaires now get their wealth "from open industries such as pharmaceuticals, cars and consumer goods", it added.
According to The Economist's 2016 crony capitalism index, the wealth of crony billionaires around the world has reduced to $1.75 trillion, down 16% in the last two years. While crony wealth has remained steady in rich countries at 1.5% of GDP, it has reduced in emerging markets from 7% of the GDP in 2008 to 4% this year.
The Economist's new index is based on work by Ruchir Sharma, head of emerging markets at Morgan Stanley Investment Management, and Aditi Gandhi and Michael Walton of the Centre for Policy Research, among others. It is based on Forbes' data of billionaires' wealth. Each billionaire is labelled as “crony” or not based on the industry in which they are most active. Crony capitalism usually refers to an environment where businesses depend on forming close ties with politicians or other government officials.
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