Wisdom for Business Conference slated for March 24-25

sense, the system may be akin to “pork barrel” politics in the US, where certain local projects get earmarked in a legal (if not entirely transparent) congressional vote-buying process.

Supposing that this interpretation is even partly correct, Indian authorities might reply that the system is “necessary” to accelerate infrastructure spending and economic development. Even so, this practice would be toxic, and it would represent a wholly di erent avor of realpolitik compared to, say, India’s vast purchases of Russian oil since the start of the Ukraine War.

While those shipments still account for less than one-third of India’s total energy purchases, they have come at a signi cant discount. Given per capita GDP of around $2,500, it is understandable that India would avail itself of lower-cost energy. Complaints by Western countries that are 20 times richer are simply not credible. While the scandal surrounding the Adani empire does not seem to extend beyond the conglomerate itself, the case does have macro implications for India’s institutional robustness and global investors’ perceptions of India.

The Asian nancial crisis of the 1990s demonstrated that, over time, the partial capture of economic policy by crony capitalist conglomerates will hurt productivity growth by hampering competition, inhibiting Schumpeterian “creative destruction,” and increasing inequality.

It is thus in Modi’s long-term interest to ensure that India does not go down this path. India’s long-term success ultimately depends on whether it can foster and sustain a growth model that is competitive, dynamic, sustainable, inclusive, and fair.