Business, Economics and Jobs

India: Behind Mumbai's conspicuous consumption

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MUMBAI, India — In a city where the majority of people lives in slums, the world’s fourth-richest man has built a 27-floor house.

It is an act most global media outlets have touted as a symbol of India's robust economy on the upswing. News outlets have pointed to the dramatic increase in the number of billionaires (69) and a rapidly growing middle class. A McKinsey Global Institute report predicted that India’s 22 million middle-class urban households could increase to as many as 91 million in the next 20 years.

But inside India, the response has been more varied. Some news commentators have called Mukesh Ambani’s mansion, which cost $1 billion and is the most expensive in the world, distasteful and even vulgar.

From the average Mumbaikar, however, there has been very little resentment despite an awareness of the contrast between this one home’s splendor and the rampant poverty that surrounds it.

Rather than a slap in the face, many Mumbaikars say they are proud of Ambani's ostentatious display, which, at 570 feet, is complete with helipads, a swimming pool and home theater.

Taxi drivers point out the towering home with a sense of honor at what their city has produced, much the same way they point to the Bandra-Worli Sea Link, an attractive bridge that took 10 years to build and connects the western suburbs to Central Mumbai.

Indians do not tend to resent others’ wealth, said Samar Halarnkar, the editor-at-large of the Hindustan Times. In cities like Mumbai with a high level of upward mobility, people tend to see another’s success and rather than scorn it, admire it and strive to achieve it.

“Everyone thinks that they can get there as well,” Halarnkar said. “They might not actually get there, but there’s always hope.”

India’s young see this growth and these opportunities, and they believe that they can be a part of it.

“Definitely there is a feeling that there are opportunities here for anyone to seize,” said Rupa Subramanya Dehejia, an economist and writer based in Mumbai. She said she travels back and forth between North America and India and notices a significant difference between how the young see their future. In the United States and Canada, she said, she senses “doom and despair.” In India, the youth emit a sense of optimism.

“They think that they’re only going to go up,” she said of India’s young people.

Furthermore, while Ambani’s mansion with its 160-car garage and private cinema may be particularly garish, in some ways it is only a continuation of Mumbai’s already lavish display of wealth.

In Mumbai, as Ambani has shown most acutely, if you got it, you flaunt it.

The city’s congested, potholed streets don’t stop people from inching along in their new Porsche Cayenne or Mercedes Benz. India’s luxury goods market is set to triple from $4.7 billion to $15 billion in 2015, according to a recent report by AT Kearney.

And fancy cars and handbags aren’t the only way to show off one’s wealth. For a particularly big night at a Mumbai club this past summer, the city’s wealthiest young men arrived toting the latest status symbol: personal body guards.

During socialist times, people who had money did not feel comfortable showing it off, Dehejia said. Now, suppressed desires to boast of one’s wealth can come to the surface. Anyone can become rich, and once they become rich, they can — and often do — tell the world.

In turn, economic class has for many become more important than caste in modern India.

“Your wealth signals your status in society,” Dehejia said. “Before economic liberalization, caste was an important indicator of where you were in society. Today, increasingly, it’s economic class that is starting to assert itself via the rising middle class.”

Conspicuous consumption has also become prevalent and acceptable in Indian society because of the rising popularity of television, the editor Halarnkar said. The ability of families to see not only what their neighbors have but also what television channels promote amplifies the aspirations of the middle class.

Some fear, though, that the success story of India has another side to it. As the country’s economy grows, so do income disparities. The difference now between an Ambani mansion and a toilet-less slum could not be starker. It remains to be seen how this widening disparity will play out in India.

“As India gets richer inequality is actually going to get worse for us,” said Dehejia, who fears the disparity might eventually lead to social unrest like it has in other developing market economies. “This is just the start of what is yet to come.”