India's modern maharajas flaunting it
By Sudha Ramachandran
BANGALORE - Mukesh Ambani, India's richest man, has moved with his family into
a new home. Pegged at over US$1 billion, the Ambanis' abode in Mumbai has been
described as the world's most expensive.
The building, named Antilla, after the mythical Atlantic island, is a
modern-day castle. Its floor space is said to be greater than that of the
Palace of Versailles. Room ceilings are twice as high as that of the average
room elsewhere; hence the 27-story building soars 173 meters into the sky
(generally a building of this height would be 60 stories). The building has
three helipads, nine elevators, a cinema, a crystal-bedecked ballroom, "safe"
rooms, and three floors of parking space.
All this, for a family of six - Mukesh, his wife, mother, and three
children. They will be waited on by 600 full-time staff.
Ambani is the chairman of Reliance Industries. With a net worth of $27 billion,
he is the world's fourth-richest man, according to Forbes magazine. Until
recently, his relationship with younger brother, Anil, India's sixth-richest
man, was marked by bitter rivalry. Media reports on the two brothers have often
described Mukesh as the more sober of the two; an introvert, whose social
circle included India's business bigwigs rather than the glamour world of
Bollywood, which surrounds Anil. Mukesh was seen to be thrifty, a man
preoccupied with building assets rather than flaunting it.
His glitzy billion-dollar home demolishes such myths.
Ambani's castle in the sky has generated heated debate in India and outside.
While some have gushed about its "post-modern" look or praised it as an iconic
home that will inspire others to aspire for more, others have dismissed it as
"obscenely lavish" and a "visual eyesore." Indeed, from the outside it does
look like a tall pile of books of varying sizes.
More damning are the ethical questions being raised. How can Ambani live in a
billion dollar home when the vast majority of people in this country live in
conditions of abject poverty? Around 37,000 square meters of floor space for a
family of six, in a country where it is normal for a family of that size to
live in a single room and share a single toilet with hundreds of others in the
neighborhood, seems not just excessive but obscene.
Mukesh Ambani leads a rapidly growing list of Indian billionaires. According to
Forbes' India's Rich List for 2010, the number of Indian billionaires has gone
up to 69, 17 more than last year. The combined net worth of India's 100 richest
people is $300 billion, up from $276 billion last year. Its four richest alone
are worth a combined $86 billion.
The 2010 Asia-Pacific Wealth Report, compiled jointly by Capgemini and Merrill
Lynch Global Wealth Management, says that in 2009, around 43,000 more Indians
made it to an elite list of high-net-worth individuals (HNIs) - those with
investable assets of $1 million or more, excluding primary residence,
collectibles, consumables and consumer durables - bringing the number of HNIs
in the country to around 127,000. HNIs have grown at around 11% every year
since 2000 in India. This is possibly the fastest pace in the world.
India's wealthy love flaunting their wealth. Liquor baron Vijay Mallya drips
gold and diamonds; a thick gold chain around his neck, diamond ear studs, a
broad gold bracelet with his initials embedded in diamonds on one wrist and a
diamond-studded watch on the other. Steel tycoon Lakshmi Mittal, India's
second-most wealthy man, spent over $65 million on the wedding of his daughter
some years ago. Guests were entertained by singer Kylie Minogue and top
Bollywood stars who were flown in for the event.
It is not just those on billionaire lists that are living it up. Recently,
Mercedes Benz reported receiving its single largest order ever for 150 cars
from Aurangabad, a small town 400 kilometers from Mumbai. Even those in small
towns have expensive tastes and toys.
While India is often associated with simple living, the lifestyles of its rich
have always been ostentatious; many books that draw attention to the lavish
lifestyles of kings and emperors.
It was during the freedom movement that simple living became the norm even for
the elite. Mahatma Gandhi, Jawaharlal Nehru and others were from privileged
families and educated abroad. They gave it all up to wear khadi,
handspun and hand-woven cloth. Gandhi made dressing and living like the masses
fashionable.
In post-independence India too, people were not as ostentatious as they are
today. Access to luxury goods and branded items was limited. That has changed
with the liberalization of the economy since the 1990s. People have access to
the best in the country. Materialism is not frowned upon and many believe that
if you have it, you should flaunt it. It is fashionable again to be rich.
India's rich, while willing to splurge on themselves, their family and friends,
are reluctant to loosen their purse strings when it comes to donating to
charitable causes.
A study by business consultancy Bain & Company found that charitable giving
in India totaled around $7.5 billion in 2009, or roughly 0.6% of the country's
gross domestic product. That percentage is higher than China's 0.1% but falls
far short of the 2.2% in the US and 1.3% in Britain. According to the report,
most of the funding for Indian non-profits comes from the government (65%) and
foreign organizations, with individuals and corporations trailing behind them
with 10%. This is in sharp contrast to the US, where 75% of charitable giving
comes from individuals and corporations.
A part of the reason for Indian "tightfistedness" is widespread corruption.
Most Indians fear that their hard-earned money will not go to the intended
beneficiaries. Tax laws also do not encourage charitable giving.
However, there are several corporations that have been generous in giving to
public causes. The Tatas, for instance, have built hospitals and some of the
country's best research institutions. Others, like Infosys and Wipro, are
running foundations that support feeding and educating the poor. But the amount
some of them set aside for charity is not even 1% of their earnings, say their
critics. They have a long way to go before they match Warren Buffet's largesse.
Interestingly, India's rich are increasingly donating abroad. Ratan Tata has
made a $50 million donation to Harvard Business School, one of the largest
individual endowments the US school has ever received. Earlier, Tata, through a
family trust, donated a similar amount to Tata's alma mater, Cornell
University. Infosys founder Narayana Murthy gifted $5 million to Harvard for
the Clay Sanskrit Library and Anand Mahindra of Mahindra & Mahindra gave
$10 million for Harvard's Humanities Center.
Explaining why Indian corporations are donating abroad, public intellectual
Pratab Bhanu Mehta pointed out in an article in Indian Express that "the top
echelons of Indian capital are becoming increasingly global, jockeying for
access and influence" on the global stage. "What else explains why CII
[Confederation of Indian Industry] was so keen to donate to the Clinton
Foundation, when its discharging of its own commitments in India has been, at
best, very reluctant?"
Many have defended the decision of India's rich to donate to foreign
universities. They say that hitherto Indian charities and think tanks received
funds from abroad. India's growing economic power has resulted in a reverse
flow now.
Others argue that knowledge knows no barrier; hence quibbling over where the
universities are located is unwarranted.
Mehta rejects this argument. "Knowledge is a stratagem in the creation and
maintenance of power," he writes, pointing out that "the questions we ask, if
not the validity of the claims we advance, are shaped by context and location."
"Just at the juncture at which Indian capital is ready to shape the world,
India's sense of itself, its own history and past, its own problems, is even
more likely to be shaped by knowledge produced elsewhere," he laments. India
"must move from being a mere consumer of knowledge produced elsewhere to a
producer of knowledge. And its self-image needs to be constituted by a
confident free-flow of ideas internally."
This means improving literacy and education facilities, and building
world-class universities and think tanks in the country. It requires massive
funding, which India's rich are in a position to provide.
The billion-dollar question is whether India's new maharajas are up to
rearranging their priorities.
Sudha Ramachandran is an independent journalist/researcher based in
Bangalore.
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