Sunday, August 1, 2010

'Many Indian billionaires have made money from proximity to govt'

The proliferation of dollar billionaires in India in recent years has often been cited as evidence of the country's growing economic might, but Raghuram Rajan, previously chief economist of the International Monetary Fund and now an economic advisor to the Prime Minister, describes this as a "dubious distinction".

In an exclusive interview to TOI, Rajan said he had no problems with wealth creation, "but I do think there is a problem if much of this wealth comes from proximity to government". Pointing out that India had the second largest number of billionaires per trillion dollars of GDP in the world (after Russia) prior to the crisis, and now possibly the largest, Rajan said "If you look at the areas where we have so many billionaires, many of them are not software entrepreneurs, it's things like land, real estate, natural resources and areas that require licences."

While conceding that some of these people have genuinely created entrepreneurial firms that have done wonderful things, in telecom for instance, Rajan added, "There are other areas which are less competitive and where proximity to government helps. That's a worrisome factor."

Full report here Times of India 

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