Rise and Fall of a ‘Growth King’ | Arup Kumar Sen

Long back, two eminent Marxist thinkers, Harry Magdoff and Paul M Sweezy, observed how the massive growth of the financial sector, both absolutely and relative to the underlying productive sector, gave birth to speculative activity on an unprecedented scale. They also noted the dangers that lie ahead and the ineffectiveness of monetary authorities in this connection. (See Harry Magdoff and Paul M. Sweezy, Stagnation and the Financial Explosion, 1987)

The recent financial crisis in India, triggered by the massive fall of share prices of Adani Enterprises in the wake of publication of a sensational report by New York-based short-seller, Hindenburg, bears testimony to the dangers of ‘financial explosion’. The Hindenburg Research Report “levelled a series of allegations against the (Adani) group, including stock- market manipulation and accounting fraud†(India Today, February 20, 2023). It is reported (The Indian Express, February 14, 2023): “Since the Hindenburg report was made public, the market cap of nine Adani Group companies has fallen by 53.2 per cent: from Rs 19.18 lakh crore on January 24 (2023) — the report came the next day — to Rs 8.97 lakh crore Monday (February 13).â€

The spectacular rise of the Adani group in recent times was noted by India Today in its cover story titled ‘Gautam Adani: The Growth King’, carried at the beginning of the current year (January 9, 2023): “Expanding at an explosive rate, the group’s market capitalisation grew nine-fold in just three years to cross Rs 17.9 lakh crore as on December 23 (2022), making it India’s second most valuable firm just behind the Tata Group but ahead of Reliance Industries. Adani even overtook Reliance Industries’ Mukesh Ambani to become the richest person in India and Asia, apart from becoming the world’s third wealthiest with a personal net worth of over $125.8 billion (per the Forbes list, as on December 28)†.

The rise and fall of business empires is nothing exceptional in world business history. What is alarming is that we are in the dark about the impact of the financial crash of Adani enterprises on the macro-economic scenario of India. Critics have started raising basic questions about the role of regulatory bodies like the SEBI and public sector financial institutions in India, in the context of Adani fiasco. On the other hand, what the government representatives and officials are projecting is ‘the banality of evil’ in the context of health of our economy.

There is no doubt in our minds that the rise of Adani as one of the ‘Business Maharajas’ took shape in the BJP regime led by Narendra Modi.