India was placed ninth in crony-capitalism with crony sector wealth accounting for 3.4% of the gross domestic product (GDP), according to a new study by The Economist.
The survey said the wealth of crony capitalists in India has reduced from 18 per cent of GDP in 2008 to 3 per cent in 2016.
The decline in India, according to English weekly, is because of Modi government going “tough on graft”, and the Reserve Bank of India “prodding state-owned lenders to stop giving sweetheart deals to moguls.”
By definition, crony-capitalism is an economic system in which family members and friends of government officials and business leaders are given unfair advantages in the form of jobs, loans, tax breaks, government grants and other incentives.
Indian billionaires are now getting their wealth “from open industries such as pharmaceuticals, cars and consumer goods”, it added.
On the worldwide list, Germany is the cleanest, where just a sliver of the country’s billionaires derives their wealth from crony sectors.
Among the big countries, it said, Russia still scored the worst, with wealth from the country’s crony sectors amounting to 18 per cent of its GDP, it said. It is due to “corruption and dependence on natural.”
Russia is followed by Malaysia, the Philippines and Singapore.
“Thanks to tumbling energy and commodity prices politically connected tycoons have been feeling the squeeze in recent years,” the study said.
Among the 22 economies in the index, crony wealth has fallen by $116 billion since 2014.
“But as things stand, if commodity prices rebound, crony capitalists wealth is sure to rise again,” it added.
The past 20 years have been a golden age for crony capitalists tycoons active in industries where chumminess with government is part of the game.