Family Oligarchies and Crony Capitalism in India

In this chapter, we address the issue of family oligarchies in India, and explore how they impact the form of capitalism practiced in India. As India works to move from its socialistic-leaning economy of almost five decades (1947–1991) to an open capitalist model, it is often faced with roadblocks in its efforts. One of those barriers comes in the form of family oligarchies, which often control and thereby restrict access to natural, material, and financial resources, and thus to business opportunities. This leads to a situation whereby the system benefits a miniscule percentage of the population — those who are part of the families that control the resources, or who are favored by such families. The oligarchic model is most visible in the political sphere in India, where someone or the other from the Nehru family has been in power for most of the time since India’s independence in 1947. The concentration of political power in one family is rather ironic given that India is the world’s largest functioning democracy of over 1.2 billion people. As oligarchies, by design, restrict the free entry of others into the system, India will need to dismantle them to create a level playing field.