PRASHANT PANJIAR / LIVEWIRE IMAGES FOR TIME

Kingfisher Beer king Vijay Mallya kisses his winning racehorse

A Tale of Two Indias
	Economic reforms have produced a new breed of billionaires amid millions of the world's poorest people. Is this an acceptable price of modernization?
	By Alex Perry

Posted Monday, November 29, 2004; 20:00 HKT
There are few finer views of the new India than from the cliff-top terrace of manufacturing magnates Parmeshwar and Adi Godrej. At night on the horizon, like a diamond necklace, streetlights trace a shoreline curve past the high-rise bank offices and apartment blocks of downtown Bombay, skirt the bars, gyms and boutiques of Marine Drive, and encircle Chowpatty Beach, ending in the rocky surf below. On a warm, monsoon night this summer, the pool lights were on, and from inside came the murmur of a low-lit dinner party for the élite. Among the guests: a Hollywood megastar, a Murdoch network boss and his model wife, and the head of a Gates AIDS charity. The dress was informal but elegant, the conversation confident, informed, international. "Just a small get-together," said Parmeshwar. It could have been the Hamptons, Monaco or Hong Kong. But it's not. It's 10 km from Asia's biggest slum.

Across town the next morning, Vijay Mallya partied in a brassier style. The Kingfisher Beer baron is famous for living up to his KING OF GOOD TIMES slogan, and as he boarded his private Boeing 727 at Bombay airport, his beard and belly suggested an Indian Henry VIII. On the flight, he explained that his image is part of his job: the more he parties, the more exposure he gains and the bigger the brand. "Work hard, play hard: same thing," he guffawed. That night, Mallya threw a Kingfisher-sponsored 1,000-guest bash for the Kingfisher Derby horse race in Bangalore, which he won the next day with the Kingfisher stallion Fantabulous King. Mallya didn't show at the party until 11:30 p.m. and then slipped off to his private go-kart track to race a fashion designer and an MTV presenter until dawn. "People call me extravagant," said Mallya. "I couldn't give two hoots. I sold 38.5 million cases last year and that's a whole bunch of booze." The flight from Bombay to Bangalore took 90 minutes. The first 20 were over an area where poverty and malnutrition have killed thousands of children this year.

Two billionaires, two lifestyles—and both light-years from that old India of saris, slums and snake charmers. The last of the three great state-run economies, India watched China and Russia open up; in 1991, it loosened the socialist bonds that had caused decades of shortages and a moribund "Hindu rate of growth." Today, like China and Russia, India boasts a crop of supercapitalists who are as sophisticated or ostentatious as any in the West. India's richest man, Azim Premji, boss of tech giant Wipro, may be just 58th on Forbes' rich list, and India might have just 61,000 millionaires compared with Russia's 84,000 and China's 236,000, according to Merrill Lynch's world wealth report. But as its economy grows, by 8.2% last year, India is making millionaires at a record rate. According to Merrill Lynch, some 11,000 Indians reached the benchmark in 2003. Forbes says the richest five Indians (worth $24.8 billion) are wealthier than their counterparts in Britain ($24.2 billion) and richer than citizens of anywhere else in Asia, bar Japan and Hong Kong.

Ballooning bank balances, however, are not even half the story. India is a living, breathing example of the challenges that face closed economies, which stressed equality of misery, when they go in search of growth and open themselves up to the gales of the global marketplace. A rising tide of prosperity has lifted millions of Indian boats—but it has raised some a lot more than others. Management consultancy KSA Technopak says the wealthy are leading a spending spree that boosted urban consumption 12% in 2002 and 16% in 2003, accounting for three-quarters of India's total growth. Malls are multiplying across the country, consumer credit has tripled in five years, and Indian psychiatrists are reporting a new condition: obsessive-compulsive shopping. Luxury brands like Mercedes and Gucci are flocking to the country. Louis Vuitton general manager Thierry de Longevialle, who is opening outlets across India's major cities, says: "These people aren't just rich, they're superrich."

But India also has more than its share of the superpoor. A quarter of the world's truly destitute—300 million people each subsisting on less than $1 a day—live in India. Jean Drèze, a professor at Delhi School of Economics and co-author with Nobel laureate Amartya Sen of Poverty and Famine, says that even Bangladesh outdoes India in most measures of development. In August, the World Bank approved up to $3 billion annually for the next four years to assist India's poor. Michael Carter, the bank's country director for India, says the nation occupies "two worlds simultaneously. In the first, economic reform and social changes have begun to take hold and growth has had an impact on people's lives. In the other, citizens appear almost completely left behind by public services, employment opportunities and brighter prospects. Bridging the gap between these two Indias is perhaps the greatest challenge facing the country today."

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