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An Open Letter from an Indian Crony Capitalist

Jun 22, 2016


(This is a spoof)

Dear Indian Citizen,

Kem cho?

Kaamon Achish? Maja ma?

Hope all is well with you.

I am very happy these days. You know with that Rajan guy deciding to go back to Chicago. Good he is going back there.

I to wanted to open a champagne bottle to celebrate. But these children of mine always want this red wine shine.

And I to am still wondering, why would anyone in their right mind, comeback to India from the United States? Okay, maybe Chicago is very cold. My deekro tells me, they call it the windy city. It's very cold up there it seems.

But then why stay on the East Coast? He could easily move to the West Coast. California. This Rajan guy. Very sunny, I am told. Just like Mumbai it is.

You know, when he was appointed as the RBI Governor, I got my kudi to buy all his books from this Amazon. Or was it Flipkart? I don't remember. Been a long time since I went to the Strand Book Stall, you see.

So, this Rajan guy has written just two books, it seems. What men, been in the United States for nearly three decades and written just two books? Look at our very own Chetan. He has written so many more books than Rajan while holding a proper banking job at the same time, for a very long time.

And Rajan could write only two, with a teaching job?

So, one book of his is called, Saving Capitalism from the Capitalists. I started the book with great interest, after all I am also capitalist. But all the economic theory-weory got to me finally. And he just kept talking about Mexico. Our Chetan is so much better. North-South love story he wrote. What fun it was.

Didn't Rajan also marry a North Indian? Why didn't he write about that then and call it I too Had a Love Story? There is enough trouble in life anyway. Why write about such heavy stuff? And that is why I like watching this Tarak Mehta ka Oolta Chashma.

Oh talking of Mexico. Have you seen this latest Hindi film called Udta Punjab? In that, they compare Mexico to Punjab. Guess the director must have got the idea after reading Rajan's book.

Anyway. I am meandering and meandering. Let me get to the point. In this Saving Capitalism from the Capitalists book Rajan writes: "Throughout its history, the free market system has been held back, not so much by its own economic deficiencies as Marxists would have it, but because of its reliance on political goodwill for its infrastructure. The threat primarily comes from...incumbents, those who already have an established position in the marketplace...The identity of the most dangerous incumbents depends on the country and the time period, but the part has been played at various times by the landed aristocracy, the owners and managers of large corporations, their financiers, and organised labour."

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First time I read this, I didn't understand only what Rajan was saying. I read this paragraph over and over again and got worried. Then my son-in-law told me, Rajan is only economist. Economists talk only theory. They don't do it in practical.

But I had this feeling that this guy meant business. He will practice his theory and try and clean up India's banking system, I had a feeling. Why? I don't know. I think Kejriwal came in my dream and told me this. And I was right about it.

You see, I had taken this huge loan from a public sector bank in 2008. Those were good days. Everything was looking good.

Indian economy was growing at a fast pace. And like any good capitalist I assumed that the economy will continue to do well and interest rates will continue to remain low.

But all that changed. Over the last four years I have been having difficulty in repaying the loan. No money only.

You see my problem. I have so much loan to repay. Rs 50,000 crore. On that I am paying interest of 12% i.e. Rs 6,000 crore a year. I am having difficulty in repaying interest. How will I ever repay the principal?

And interest is so high. If it was 8%, I would be paying only Rs 4,000 crore a year. Now I am paying Rs 6,000 crore. Rs 2,000 crore more. "Profit main ghato ho gayo!"

Shouldn't the government help me also? Shouldn't the interest rates come down? But this Rajan guy did not want to help me only. Kept interest rates high. On top of that he encouraged banks to come after our assets. And that too public sector banks? Imagine!

You know, this is not the first time I have over-borrowed. I did that in the late 1990s also. But somehow I managed to come out unscathed...he he...The taxpayers had to pick up the tab.

And that is only fair no. There are so many taxpayers and so few capitalists who have over-borrowed. No individual taxpayer will feel the pain of having bailed out the capitalists.

But this Rajan guy said no. He insisted on capitalists like me repaying. Selling our assets and repaying.

Imagine? In India? What is the world coming to?

So good only he is not taking a second-term. Going back to the United States.

And it's time to celebrate. "Kuch murga shurga khaate hain. Peg-sheg lagate hain!"

Oh and you Dear Citizen. Thank you in advance. If you do pick the tab. Ghabrao nahi, there will be no pain. It will be like a painless injection on your bum.

And imagine I have borrowed Rs 50,000 crore. If you don't rescue me, the bank I have borrowed from will go bust. And you will lose your money!

Remember what did that John Maynard Keynes say? "If you owe your bank a hundred pounds, you have a problem. But if you owe your bank a million pounds, it has." 

Do you know the modern version of that? As The Economist magazine put it: "If you owe your bank a billion pounds everybody has a problem."

Dear Citizen, I am your problem!

Yours truly,
An Indian Crony Capitalist

Postscript: Rajan has written Saving Capitalism from the Capitalists with Luigi Zingales. His other book is Fault Lines.

Vivek Kaul is the Editor of the Diary and The Vivek Kaul Letter. Vivek is a writer who has worked at senior positions with the Daily News and Analysis (DNA) and The Economic Times, in the past. He is the author of the Easy Money trilogy. The latest book in the trilogy Easy Money: The Greatest Ponzi Scheme Ever and How It Is Set to Destroy the Global Financial System was published in March 2015. The books were bestsellers on Amazon. His writing has also appeared in The Times of India, The Hindu, The Hindu Business Line, Business World, Business Today, India Today, Business Standard, Forbes India, Deccan Chronicle, The Asian Age, Mutual Fund Insight, Wealth Insight, Swarajya, Bangalore Mirror among others.

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8 Responses to "An Open Letter from an Indian Crony Capitalist"

Sanjay Karanth

Jun 22, 2016

This is pretty silly. You have made your point in your earlier letters, Mr. Kaul.

Like (1)

Parvesh Sethi

Jun 22, 2016

In our Indian System...

Good Buisnessmen make money because they know how to implement the Ideas to cheat poor people and make them to give their hard earned money to them without knowing or under the tag of Moderate Risk to earn more...

All Polititions, Beurocrates helping Such Buinessmen also get their share...

Poor people if they come to know that they have been cheated they can not go for justice... as courts play according to money power not as per law...

Further the Regulatory Bodies say to the Cheated persons that we were giving warning to you still you trusted the System... It is your fault.. Not of the Cheater as his books are clear....

(Regulatory Bodies tells cheater, how to keep their books clean and leave no sign of cheating legally....)

Like (1)

p v k sathyanarayana

Jun 22, 2016

yeh toh super che !tax payer marigelooo..!!

Like (1)


Jun 22, 2016

The crony capitalist that you have potrayed is either naive or is wilfully misninterpreting facts. I agree that the Interest rates coming down helps all businessmen both good and bad. But Crony is a person who influences the system to get something what other businessmen do not get. A crony businessman would not repay the loans even if you reduced it to 0%. but that is no reason to think that businessmen are the root cause of all problems. You will end up like venezuela. Rajan was in fact a friend of Crony Politicians who are trying to somehow stop the development of the masses so that they can keep speaking about poverty and milking votes.

By your definition, there are crony farmers who commit suicide as they are unable to repay. The govt as brought the Bankruptcy Law, to address that problem. But what action did Rajan take against the banks who lent to those cronies and not to honest businessmen. The bankers were either ignorant or were crooks. Either way the bank is at fault for employing unfit or unscruplous persons and fully liable.

Reducing real interest rate at 0% has nothing to do with cronyism. A fair equilibrium can be achieved only by chasing 0% real interest rates.

Like (1)


Jun 22, 2016

It is interesting to note that all journalist have become suddenly more patriotic than what they were for six decades. Atleast till now, there has been no scams on bjp government or on modi [ for more than 1 decade in power ]. But most of the looting of the country natural resources and bank by the UPA

Like (1)


Jun 22, 2016

Again, I'm not sure if you can see the contradiction in what you are saying. RR was associated with Indian government since 2007; he was our Chief Economic Adviser from 2012-13. Crony capitalism was happening then in full flow. What did he do about it?
He has no one but himself to blame that he his term was not extended. Could he not have kept his big mouth shut?

Like (1)

Aniket Shah

Jun 22, 2016

Brilliantly written and well said. Please keep writing like this.

Like (1)

santosh jagtap

Jun 22, 2016

Ha ha ha, this Vivek Kaul guy is in a different mood today.
You have a son in law ?? You don't look at that old in the photo, until you have taken a leaf from these cronies & put your old photograph just like their balance sheets which look pretty impressive (just kidding).
I am big fan of your writing, keep up the good work.

Like (1)
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