Yet what happens when private interests capture the politicians, along with many of the bureaucrats under them? One legacy of Dhirubhai Ambani was a dangerously suborned state. Years after his death this was reflected in the Indian parliamentary debates in late 2005 on the report by Paul Volcker on the Iraq Oil-for-Food scandals. As the Bangalore lawyer and activist Arun Agrawal detailed in a courageous book, speaker after speaker from both the Congress-led government and the BJP opposition, including former adversaries of Reliance, avoided even mentioning Reliance as the largest Indian recipient of oil allocations from the Saddam Hussein regime, let alone trying to probe the political circumstances in which the oil concessions were won. Agrawal also raises pertinent questions about the transfer of offshore oil and gas concessions from the state petroleum development sector to Reliance, including the Mukta, Panna and Tapti fields in the Arabian Sea and the immense Krishna–Godavari discovery in the Bay of Bengal.12
Mukesh Ambani’s revealed thinking on his giant projects in urban development, distribution and retailing shows an almost contemptuous belief that such schemes are beyond the capacity of Indian governments to orchestrate. These are certainly the kind of sectoral developments that India needs, the generation of workaday jobs and communities that fill the gap between the vast subsistence and menial income group and the present tiny educated elite (in which the much vaunted IT sector employs a total 1.3 million people, about 0.1 per cent of the population and 0.2 per cent of the workforce). Yet can India as a whole develop if the most vigorous activity is nurtured in special economic zones exempted from many of the regulations and requirements that apply in the general community, almost like the East India Company’s ‘factories’ in the Mughal era?
In his essay, Das concludes that ‘the state cannot merely withdraw. Markets do not work in a vacuum. They need a network of regulations and institutions; they need umpires to settle disputes.’ Das also observes that some of the most important post-1991 reforms succeeded because of the regulatory institutions established by the state. While India needs entrepreneurs like Mukesh Ambani, it also needs a much stronger state to regulate their excesses and prevent abuses. Businessmen will do what they can get away with, and the Reliance model shows a strong appreciation of the benefits of monopoly. A strong state would devote more resources to relevant and updated policies, better revenue collection and accountability and effective policing of rules, rather than persisting with so much effort in micro-managing affairs. It would strengthen its bureaucracy, not with greater powers but with better resources, education and discipline so as to be truly the ‘steel framework’ that Nehru envisaged, or the rule-keepers prescribed by Hayek.
Against those who tended to see the baleful influence of Reliance under every rock, however, it has to be noted that the brothers’ feud opened up more space for public scrutiny of their businesses and family affairs. While some media groups had not known which way to jump in 2004, others had leapt into the fray on one side or the other, and both brothers felt the need to put their thoughts to a wide public.
While the brothers were separately richer, in paper wealth, than any Mughal emperor could have imagined and together formed the world’s richest family, other billionaires were on the rise in India and provided some countervailing power. There were tycoons like Kushal Pal Singh, who headed the country’s largest property developer, DLF, and Sunil Mittal, creator of India’s largest mobile telephone operator, Bharti Airtel, each with assets close to $20 billion at the peak of the financial boom in the latter part of 2007. After building up a worldwide steelmaking chain, the London-based entrepreneur Lakshmi Mittal eclipsed Mukesh in personal wealth at the end of 2007. By then he had returned in a decisive way to his homeland, listing his group on local exchanges and making his plans to enter the petroleum sector very clear and competing for prospective oil leases. Mittal also displayed a new favour with Sonia Gandhi, while his son became close to her son Rahul, the fourth-generation heir apparent of the Nehru–Gandhi dynasty. Mukesh had a significant rival for political favour.13
The other great legacy of Dhirubhai Ambani was an unabashed flaunting of wealth. With dozens of new billionaires created by sharemarket floats, India saw an explosion of business and consumer power, with many of the new tycoons consciously modelling themselves on Dhirubhai. Indeed, the top four Indian billionaires controlled more assets than China’s twenty top business people. In mid-2007 Manmohan Singh railed against the ever more lavish displays of wealth, in a speech to the Confederation of Indian Industry.
In a country with extreme poverty, industry needs to be moderate in the emolument levels it adopts. Rising income and wealth inequalities, if not matched by a corresponding rise of incomes across the nation, can lead to social unrest … The electronic media carries the lifestyles of the rich and famous into every village slum. An area of great concern is the level of ostentatious expenditure on weddings and other family events. Such vulgarity insults the poverty of the less privileged, it is socially wasteful and it plants the seeds of resentment in the minds of the have-nots.14
Singh’s warning met derision in the press. A large section of the intellectual elite had accommodated Dhirubhai Ambani and his sons within their approval. While both heirs paid a certain homage to the ‘simple’ personal life of their father, neither in his own lifestyle made any obeisance to Gandhian ideals. Anil’s partying with the Bollywood crowd and Mukesh’s erection of a modern palace in Mumbai and acquisition of a luxury corporate jet showed the final triumph of polyester over khadi cotton.
Sixty years after ‘freedom at midnight’, the moment of India’s modern independence in 1947, the Modh Bania from Saurashtra named Dhirubhai Ambani seemed to portray the spirit of the new India more than the region’s other most famous Modh Bania, Mohandas Gandhi.
Notes
2 A PERSUASIVE YOUNG BANIA
1 N.A. Thoothi, The Vaishnavas of Gujarat, Longmans Green, Calcutta, 1935, pp. 357–8.
2 The following passage draws on H.V. Hodson, The Great Divide, Oxford University Press, 1962, pp. 427–40.
3 LESSONS FROM THE SOUK
1 Interview with author, February 1991. One lakh equals 100 000.
2 Charles Hepburn Johnston, The View From Steamer Point, Collins, London, 1964.
3 R.J. Gavin, Aden Under British Rule 1839–1967, C. Hurst & Co., London, 1975, p. 322.
4 Johnston, The View From Steamer Point, p. 55.
5 Gavin, Aden Under British Rule 1839–1967, pp. 318–51, covers the British withdrawal.
6 Letter to author, 1996.
4 CATCHING LIVE SERPENTS
1 Sucheta Dalal and Debashis Basu, interview with Mukesh Ambani, MoneyLIFE magazine, carried on rediff.com, 17–19 January 2007.
5 A FIRST-CLASS FOUNTAIN
1 Nitish Sen Gupta, Inside the Steel Frame, Vikas, New Delhi, 1995, p. 65.
2 Raj Thapar, All These Years, Seminar Publications, New Delhi, 1991, p. 249.
3 Ibid, pp. 337–8.
4 Business Standard, 11 April 1981.
5 Organiser, 12 September 1981.
6 Gita Piramal, Business Maharajas, Viking/Penguin, New Delhi, 1996, p. 34.
7 India Today, 30 June 1985.
6 GURU OF THE EQUITY CULT
1 Sen Gupta, Inside the Steel Frame, pp. 58–9.
2 India Today, 15 February 1983.
7 FRIENDS IN THE RIGHT PLACES
1 See The Economic Scene, September 1984.
2 Piramal, Business Maharajas, p. 6.
3 Sen Gupta, Inside the Steel Frame, p. 113.
4 India Today, 15 January 1984.
5 Business Standard, 29 August 1984.
6 Piramal, Business Maharajas, pp. 56–7.
8 THE GREAT POLYESTER WAR
1 Interview with author, November 1996.
2 ‘Nusli Wadia: Corporate samurai’, Business World, 28 July–10 August 1993.
3 Inder Malhotra, Indira Gandhi: A Personal and Political Biography, Hodder & Stoughton, London, 1989, pp. 214–15.
4 Khushwant Singh, ‘The new messiah’, Illustrated Weekly of India, 15 November 1987; ‘Loner’, Telegraph (Calcutta), 15 January 1995; Prem Shanker Jha, In the Eye of the Cyclone, Viking/Penguin, New Delhi, 1993.
5 Blitz, 23 November 1985.
6 Times of India, 17 November 1985.
7 Blitz, 23 November 1985.
8 Times of India, 29 December 1985.
9 THE PAPER TIGER
1 Interview with author, February 1991.
2 Illustrated Weekly of India, 22 April 1990.
3 Interview with author, October 1996.
4 Illustrated Weekly of India, 22 April 1990.
5 Interview with author, September 1995.
6 This and other quotations in this chapter are drawn from Gurumurthy’s twelve articles in the Indian Express between 22 March and 12 June 1986.
7 India Today, 15 August 1986.
10 SLEUTHS
1 Venkitaramanan commented that his closeness to Reliance was ‘always exaggerated’ (telephone conversation with author, February 1997).
2 Interview with S. Gurumurthy, October 1996.
3 Economic Times, 29 August 1986.
11 LETTING LOOSE A SCORPION
1 Prem Shankar Jha, In the Eye of the Cyclone, pp. 70–3.
2 Illustrated Weekly of India, 20 June 1986.
3 Vir Sangvi, ‘The 40 Crore Question’, Sunday, 13–19 March 1988.
4 Illustrated Weekly of India, 19 April and 23 August 1987.
5 Sunday, 8–14 February 1987.
6 Sangvi, ‘The 40 Crore Question’.
7 Jha, In the Eye of the Cyclone, p. 74.
8 Singh, ‘The new Messiah’.
12 BUSINESS AS USUAL
1 India Today, 15 March 1989.
13 MURDER MEDLEY
1 Nicholas Coleridge, Paper Tigers, Heinemann, London, 1993, pp. 234–5.
2 Madhav Godbole, Unfinished Innings, Orient Longman, New Delhi, 1996, pp. 168–73.
14 A POLITICAL DELUGE
1 Indian Express, 5 January 1990.
2 Indian Express, 2 January 1991.
3 A judgement on this case came only on 3 April 1997 when the Bombay Collector of Customs, S.K. Bharadwaj, ordered Reliance to pay Rs 401.4 million in additional duty. Reliance said it was appealing against part of the order. See Business Standard, 4 April 1997, and Financial Express, 9 April 1997.
4 Financial Express, 17 January 1990.
5 Interview with author, 1996.
6 Conversation with author, 1994.
7 Jha, In the Eye of the Cyclone, p. 98.
8 Godbole, Unfinished Innings, pp. 237–49.
15 UNDER THE REFORMS
1 Economic Times, 16 August 1991.
2 BusinessIndia, 19 August–1 September 1991.
3 Interview with author, 1992.
4 Interview with author, October 1996.
5 Debashis Basu, Business Standard, 20 and 21 July 1995.
6 R.C. Murthy, The Fall of Angels, Indus, New Delhi, 1995, p. 156.
7 Interview with author, November 1996.
8 Business Today, 7–21 September 1995.
16 HOUSEKEEPING SECRETS
1 Economic Times, 1 December 1995.
2 Observer of Business and Politics, 30 November 1995.
17 DHIRUBHAI’S DREAM
1 ‘The importance of being Balu’, India Today, 23 November 1998.
2 Indian Express, 19 November 1998.
3 Raashid Alvi, ‘Complaint to the government and its agencies regarding fraudulent misuse of large-scale public funds by Reliance Petroleum Ltd.’ See ‘Reliance’s smoking gun’, BusinessWeek, 25 June 2001.
4 Business Today, 16 March 2003.
5 Sucheta Dalal, ‘S. Gurumurthy on the warpath against Reliance again’, 8 February 2002, has a summary of Gurumurthy’s accusations and a link to the Reliance response, www.suchetadalal.com.
6 Abhay Singh and Ravil Shirodkar, ‘The feud menacing India Inc.’, Bloomberg Markets, June 2005.
7 www.dhirubhai.net/dhcmshtml/2002.pdf.
8 Press Trust of India, 8 July 2003.
9 ‘Reliance didn’t grow on permit raj: Anil Ambani’, interview with Vir Sangvi, Star Talk, on rediff.com, 11 May 2002.
10 C.P. Chandrasekhar, ‘The Dhirubhai legend’, Frontline, Chennai, 20 July–2 August 2002.
11 Ibid.
12 Harish Nambiar, ‘Dhirubhai Ambani: The Heathcliffe of Indian business’, 15 July 2002, on www.chowk.com.
13 Paranjoy Guha Thakurta, ‘Shourie’s selective memory’, www.rediff.com, 11 August 2003.
14 Ibid.
15 T.J.S. George, ‘Can yesterday’s vice become today’s virtue?’, ‘Point of View’, Newindpress on Sunday, 12 July 2003.
16 M.K. Venu, ‘Shourie, Hayek and the Ambanis’, Economic Times, 15 July 2003.
17 Edward Luce, In Spite of the Gods: The Strange Rise of Modern India, Doubleday, New York, 2007, pp. 7–8; Press Trust of India, Indian Express, 8 July 2003.
18 THE POLYESTER PRINCES
1 Sucheta Dalal and Debashis Basu, interview with Mukesh Ambani, MoneyLIFE magazine, on rediff.com, 17–19 January 2007.
2 Prabhu Chawla and Rohit Saran, ‘The telescam’, India Today, 23 April 2001; see also Rajni Gupta, ‘India attempts to give a jump-start to its derailed telecommunications liberalization process’, on http://arxiv.org/pdf/cs.CY/0109062.
3 V. Venkatesan, ‘Seeking accountability’, Frontline, 14–27 January 2006.
4 Virendra Kapoor, ‘Poor Pramod’, rediff.com, 1 February 2003; Satish Misra, Tribune (Chandigarh), 30 January 2003.
5 P. Vaidyanathan Iyer, ‘Is Arun Shourie right?’, rediff.com, 15 April 2003; ‘Reliance’s triumph angers mobile-phone competitors’, Economist, 18 December 2003; Aravind Adiga and Meenakshi Ganguly, ‘Families under fire’, Time Asia, 16 February 2004; Sanjay Anand, ‘Reliance Infocomm on the prowl’, Times of India, 9 March 2004.
6 Ganguly, ‘Families under fire’; Saritha Rai, ‘A giant so big it’s a proxy for India’s economy’, New York Times, 4 June 2004.
19 CORPORATE KURUKSHETRA
1 Sucheta Dalal, ‘The Ambani dream and a mysterious absence’, rediff.com, 2 January 2003.
2 Interview with Vir Sanghvi for Star Talk, carried on rediff.com, 11 May 2002.
3 T.N. Ninan, ‘India Inc. and family squabbles’, Business Standard, 20 November 2004; also on rediff.com.
4 Sumit Mitra, ‘The network neta’, India Today, 25 October 1999; Luce, In Spite of the Gods, p. 134; Christopher Kremmer, Inhaling the Mahatma, HarperCollins, Sydney, 2006, pp. 312–19.
5 Alam Srinivas, Storms in the Sea Wind, Roli Books, New Delhi, 2005, p. 139.
6 Olga Tellis, ‘Anil to respond soon to brother’, Asian Age, 28 November 2004.
7 Srinivas, Storms in the Sea Wind, p. 83.
8 Mira Kamdar, Planet India, Scribner, New York, 2007, pp. 205–8.
9 ‘Nita is cause of Ambani rift’, Asian Age, 21 November 2004.
10 Sucheta Dalal and Debashis Basu, interview with Mukesh Ambani, MoneyLIFE, on rediff.com, 17–19 January 2007.
11 Ninan, ‘India Inc. and family squabbles’.
12 Srinivas, Storms in the Sea Wind, pp. 7–8.
13 Ibid., p. 8.
14 Ibid., pp. 86–7.
15 Ibid., pp. 89–90.
16 Indrajit Gupta, Shishir Prasad, T. Surendar, ‘Genie’s out of the bottle’, Businessworld, 20 December 2004.
17 T. Surendar, ‘Showdown at Maker IV’, Businessworld, 10 January 2005.
20 MOTHER INDIA
1 ‘Mom waited in the wings, kept flock intact’, Times of India, 20 June 2005.
2 ‘Ambani vs Ambani’, India Today, 29 November 2004; ‘Dividing the Empire’, India Today, 27 December 2004; ‘Showdown at Maker IV’, Businessworld, 10 January 2005.
3 Sucheta Dalal, ‘Is Reliance rewriting rules of corp. governance?’, rediff.com, 31 January 2005.
4 Srinivas, Storms in the Sea Wind, p. 105.
5 V. Venkatesan, ‘Seeking acc
ountability’, Frontline, 14–27 January 2006.
6 Hindu, 6 March 2005.
7 Olga Tellis, ‘CBI has email linking Mukesh man to “PB”‘, Asian Age, 22 May 2005; ‘Call alert: Govt may refer Reliance Info case to CBI’, Times of India/Economic Times, 20 May 2005; ‘Rel info exec’s e-mails under lens’, Times of India/Economic Times, 19 May 2005.
8 Sucheta Dalal, ‘What this means: Anil’s won a kingdom, now he needs to build fences and bridges’ and ‘Kiss and make-up time at Reliance’, Financial Express, 19–20 June 2005.
9 ‘Ambani brothers clash again – Mukesh refutes Anil’s charges on non-transfer of business control’, Business Line, 5 February 2006; Sucheta Dalal, Financial Express, 6 February 2006.
Mahabharata in Polyester Page 38
