A Tale of Two Indias: Forty Billionaires In A Poor Country

[Riaz Haq]

The booming Bombay stock market in 2007 and the benefits of globalization have seen India's billionaires list swell to 40 on the Forbes Billionaires List. The Indian billionaires combined wealth has more than doubled from $170 billion to $351 billion in 2007. While Bill Gates has slipped to number three spot from number one, the number 4, 5, 6 and 8 spots in the top 10 are now occupied by Lakshmi Mittal, Mukesh Ambani, Anil Ambani and KP Singh from India.

The news of the newly-minted Indian billionaires is bringing sharper focus on the growing rich-poor gap in India. The Times of India reports Communist Party leader Sitaram Yechury claiming that on the one hand, 36 Indian billionaires constituted 25% of India’s GDP while on the other, 70% of Indians had to do with Rs 20 a day. "A farmer commits suicide every 30 minutes. The gap between the two Indias is widening," he said.

The growing wealth gap is also a big concern in other BRIC countries such as China and Russia. Fully a third of the new billionaires come from Russia (35), China (28) and India (19). The Chinese government is trying to tackle the growing rich-poor, urban-rural divide, a major cause of the rise in incidents of social unrest and violence in the world's most populous nation. The estimates of the urban-rural income gap vary by anywhere from 3 times to six times.

It is not unusual to see the rich-poor gap in the early stages of explosive growth in economies where the focus is on wealth creation rather than distribution. However, if this continues for an extended period of time, there is significant potential for widespread social unrest and serious political insatiability that can threaten the very foundations of a nation. From the recent speeches by the political leadership in India and China, it is clear that there is an acknowledgment of the issues and willingness to work on more equitable distribution of the fruits of progress.

Click here for complete list of Forbes Billionaire.