India ranks 9th in Economist crony capitalism list

In another unflattering indication of the way India is run, the country ranks ninth in crony capitalism, with crony sector wealth accounting for 3.4 per cent of the gross domestic product (GDP), according to a study by The Economist.

In India, the non-crony sector wealth amounts to 8.3 per cent of the GDP, as per the latest crony-capitalism index by the respected London magazine.

In the 2014 ranking also, India stood at the ninth place.

Using data from a list of the world's billionaires and their worth published by Forbes, individuals are labelled as crony or otherwise based on the source of their wealth.

Germany is the cleanest, where just a sliver of the country's billionaires derives their wealth from crony sectors.

Russia fares worst in the index, where wealth from the country's crony sectors amounts to 18 per cent of its GDP, it said. Russia tops the list 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.

Their combined fortunes have dropped 16 per cent since 2014, according to The Economist updated crony-capitalism index.

"One reason is the commodity crash. Another is a backlash from the middle class," it said.

 Worldwide, the worth of billionaires in crony industries soared by 385 per cent between 2004 and 2014 to $2 trillion, it added.