*Southern Centre for Inequality Studies (SCIS) - (Working papers)

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    Towards a gender just transition: Principles and perspectives from the global South
    (University of the Witwatersrand, Johannesburg, 2024-06-19) Cerise, Somali; Cook, Sarah; Lehmann-Grube, Katrina; Taylor, Julia; Valodia, Imraan
    A ‘just transition’ broadly refers to the principles, processes and practices used to ensure that transitions to a low-carbon economy are socially just. Gender justice, however, frequently remains marginal to mainstream debates and policies – whether about climate finance, technological solutions, corporate management approaches – or indeed most government transition strategies. This paper argues that ensuring a transition that delivers gender justice is both critical and urgent. Without explicit attention to, and clear prioritisation of gender justice across transition policies, climate change ‘solutions’ risk replicating or reinforcing structural gender inequalities. Examples of such risk include women’s continued limited access to economic opportunities, employment and social protection; their over-representation in precarious work; and women’s primary responsibility for social reproduction and care. Communities with few livelihood options and limited access to services rely heavily on natural resources to survive. These resources are vital to the provision of care and may be severely affected by environmental degradation. Care responsibilities expose women disproportionately to climate and environmental impacts. Women are the household members most likely to bear the burden of adapting to climate change. These realities reduce the likelihood that any climate transition can be just without a clear focus on the policies, strategies and implementation processes needed to achieve gender justice. This paper asks what a gender just transition could and should look like, particularly in the global South. Based on an extensive review of conceptual and empirical literatures from a range of disciplinary perspectives, we examine how different approaches address – or ignore – gender dimensions of (in)justice in thinking about low-carbon transitions. We go on to offer a more expansive view of justice informed by perspectives drawn from feminist theory, and combine this with the pillars of distributive, procedural, recognitive and restorative justice.
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    Corporate financialisation: a conceptual clarification and critical review of the literature
    (Southern Centre for Inequality Studies, 2024-05) Reddy, Niall; Rabinovich, Joel
    Corporate financialisation (CF) comprises a major field of financialisation studies centred on the belief that significant changes in corporate governance and business models have been driven by financial imperatives, which have had a profound impact on investment habits, labour policies, organisational practices and the distribution of revenues. Experiencing explosive growth in recent years, this field has become mired in conceptual ambiguity, mirroring problems with financialisation studies as a whole. While seeking to restore some conceptual clarity and clearly delineate the boundaries of the concept, this paper offers a detailed review of empirical work on CF. At the core of the field, we identify four sub-theories, each addressing distinct aspects of the way business models have become financialised under the influence of shareholder value principles. Our dissection of the literature shows, however, that these theories mostly remain under-substantiated. The connection of financialisation strategies to key outcomes of interest, such as declining investment and rising inequality, remains nebulous in most cases. Beyond this, we identify key weaknesses in the way shareholder value orientation – the causal lynch pin of CF accounts – has been theorised. The field as a whole has paid insufficient attention to the variegated and uneven nature of the shareholder revolution, which has prevented a single uniform set of governance principles from diffusing. We also argue that the tendency to dilute definitions of corporate financialisation across explanans and explanandum has masked problems of verification. The critique concludes with a call for conceptual clarity and more care in distinguishing financialisation from causal channels associated with other structural dynamics, such as monopolisation.
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    AI–Citizens’ relationship: Analysing Egypt and Mauritius national AI strategies
    (University of the Witwatersrand, Johannesburg, 2023-09) Hendawy, Mennatullah; Ansari, Zahra
    Recently, in the African context, there has been a great appetite for digitising services, more specifically infrastructure services, and using artificial intelligence (AI). To facilitate the development of AI, governments publish national AI strategies (NAS). In this context, governments across Africa started to issue national AI strategies to keep up with the advancements in AI (see Bareis and Katzenbach, 2022). So far, few African countries have published national AI strategies (Digiwatch, 2020; TRT Afrika, 2023). Mauritius and Egypt are the only African countries with a publicly available national strategy outlining vision and objectives (Onyango, 2022). There is an increased use of artificial intelligence (AI) in infrastructures that support the many functions performed by society. For example, public transportation, (renewable) energy, education and workplaces have all included AI and smart technology in their infrastructure. Building on the need to ensure access to AI infrastructure as it continues to disrupt African cities, this paper uses the understandings from the analytical framework of infrastructure citizenship to analyse Egypt and Mauritius NASs in order to explore the following: How is the relationship between citizens and infrastructure (AI applications) portrayed in each strategy? and How are AI applications framed in both strategies to improve or hinder the relationship between citizens and infrastructure?
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    Macro Fiscal Review: Reflections on public finances ahead of the 2024 Budget Review
    (Southern Centre for Inequality Studies (SCIS), 2024-02) Amra, Rashaad; Sachs, Michael; Willcox, Owen; Madonko, Thokozile
    This policy note, published before the 2024 Budget Review tabling, reviews global and domestic economic developments and fiscal developments since the 2023 Budget Review and Medium-Term Budget Policy Statement (MTBPS) were tabled. It considers the implications of these developments for public finances and the realisation of the state’s socioeconomic goals. This note discusses emerging expenditure pressures observed in the recent period, which would warrant government to consider in its formulation of the upcoming budget. It assesses government’s key fiscal projections presented in the 2023 MTBPS and Budget Review. And it presents the Public Economy Project’s own updated outlook for public finances – it incorporates updated economic and fiscal data, and adjusted expenditure assumptions. It further discusses the limitations of government’s current approach to fiscal policy, and presents possible adjustments that would allow for a more equitable and sustainable path for public finances.
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    Platform work in developing economies: Can digitalisation drive structural transformation?
    (Southern Centre for Inequality Studies (SCIS), 2023-12) Cook, Sarah; Rani, Uma
    This paper discusses the expansion or penetration of digital economic activity in the context of developing economies, and what this may mean for economic or structural transformations for countries in the global South. We ask what possibilities new jobs and forms of work in the digital economy hold – in particular platform work – for the productive transformation of economies in ways that contribute to achieving the goals of human, inclusive and sustainable development. What are the impacts on work and workers in this process? The question of whether a ‘digital transformation’ can spur development and, if so, how and to whose benefit, depends in large part on the nature of employment created, and whether labour can move to higher-productivity sectors which raise incomes while also strengthening the capacity to finance public goods and services, including social protection. This paper provides a synthesis of literature and debates – conceptual, historical and empirical – linking work in the digital economy with ideas of ‘structural transformation’ and development. Our analysis of historical processes of structural transformation and of the conditions of work associated with contemporary digital platforms points to a range of obstacles to development and, in particular, the breakdown of links between skills, productivity, value and wages, limited capacity of states to invest in relevant infrastructure, and the concentration of capital with access to a global supply of labour. We conclude by considering policy actions that would be needed to direct digital economic transformation towards sustainable, fair and inclusive development.
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    The Role Of Fiscal Think Tanks in Fiscal Policy: Global patterns and lessons for South Africa
    (Southern Centre for Inequality Studies (SCIS), 2024) Krause, Philipp
    This paper looks at fiscal policy more broadly through the institutions of policy-making rather than more narrowly through the institutions of budgeting. It considers who shares the fiscal policy space with the ministry of finance and how the fiscal policy agenda is set. Finance ministries may share the policy space with other bodies, independent or not, and yet retain a dominant role in how the budget is set. The paper discusses some important institutional differences that shape fiscal policy-making, and how those differences affect a think tank’s role. It then describes the most important types of fiscal think tanks that have emerged, with reference to some country examples, and makes some suggestions for implications in practice. It concludes with an outline of options for a fiscal think tank in South Africa.
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    The Inequality—Financial Markets Nexus: Implications for Developing Metrics for Voluntary Disclosures
    (Southern Centre for Inequality Studies (SCIS), 2024-01-21) Khan, Zoheb; Theobald, Stuart; Ewinyu, Arabo K.; Francis, David; Mogale, Etumeleng; Valodia, Imraan
    Can a disclosure framework reduce overall socio-economic inequality, or will it shift inequality somewhere else, for example, to other firms, other regions, or out of the firm and the private sector and into households? Are there material regional variations in the perceptions of the causes and effects of socio-economic inequality? What is the appropriate level of focus for an inequality disclosure framework? Surplus generated by workers accrues to the owners of capital and, at the most basic level, is a significant contributor to socio-economic inequality. There is also inequality in income between workers within firms and sectors. Furthermore, inequality is produced by access to and changes in asset prices, and by sovereign investing activities, among other factors. The correct unit of analysis for the proposed Taskforce on Inequality-related Financial Disclosures (TIFD – which since the original drafting of this paper has now converged efforts with new partners to form the Taskforce on Inequality and Social-related Financial Disclosures (TISFD)) deserves attention. The authors of this paper believe that regional variations mean that a one-size-fits-all disclosure framework is unlikely to be appropriate. For instance, the distribution of informal employment needs to be considered, with 61% of all global employment being informal and with as much as 90% of employment being informal in many countries in the global South. While disclosure frameworks matter for formal companies, what is often overlooked in the development of disclosure frameworks are the implications for the large number of people, particularly in the global South, who are informally employed or who work in informal enterprises. A second consideration is high unemployment given that the distribution of labour income is one of the great drivers of income inequality. Furthermore, the growth of precarious and non-standard employment, with the rise of platform work as an example, is an additional concern.
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    Financial Directions and Budget Trends in Government Healthcare
    (Southern Centre for Inequality Studies (SCIS), 2023-11) Sachs, Michael; Abdullah, Fareed; Madonko, Thokozile; Jonas, Kim; Slingers, Nevilene; Zvawada, Tanaka; Ewinyu, Arabo; Shedi, Olwethu
    This working paper provides evidence and analysis that can assist in taking forward the agenda of the Presidential Health Compact. It does so by reviewing the financial performance of the government healthcare system over the last decade. After assessing the financial management performance, it looks at the “financial health” challenges facing the system, including the problems of accruals and medico-legal claims. The report then examines the budget pressures faced by provincial healthcare departments, as well as the different allocation of resources and levels of care across provinces. It ends with a conclusion and tentative reflections informed by the evidence.
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    Urban property, expropriation and wealth concentration in Brazil
    (Southern Centre for Inequality Studies (SCIS), 2023-08-14) Fix, Mariana; Constantino, João Paulo; Prado, André Doca
    The complete process of housing production is an important element in defining patterns of inequality. This paper aims to identify and characterise changes and continuities in the real estate wealth, with a focus on the residential segment. In doing so, we observed several two-way interactions, situating them in the long duration of the constitution of highly unequal structures in Brazil. In particular, we describe the reconstitution of the credit system by the Workers' Party government, in the 2000s, as a moment when interactions with the theme of inequality became more complex. The reorganisation of the regulatory framework and the expansion of housing credit in the 2000s generated a substantial increase in real estate activity and created a housing boom. In the text, we present three rounds of IPOs from real estate developers and discuss the most significant (2006-2008). While this round originated in the increase in real estate credit, its sustainability only occurred thanks to a housing policy that mobilised billions of reais (BRL) in subsidies for the construction of millions of houses. The amount was unprecedented and allowed the policy to reach social strata that had not had access to formal housing before – in this sense, it responded to a social and political demand. On the other hand, this volume of public funds was also significant for the financial real estate circuit. This increase in scale gave more power to homebuilders that decisively influenced the design of the housing programme. Some effects of this conflictive and multidimensional process on the struggle for the right to the city are discussed throughout the text.
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    Capital and Politics: Links and Distance During the Bolsonaro Government
    (Southern Centre for Inequality Studies (SCIS), 2023-07-19) Bedê, Francisco; Domingues, José Maurício; Herz, Mônica; Gonçalves, Guilherme Leite; Rodríguez, Maria Elena
    The present article analyses the relation between the state and the political system, on the one side, and capital and capitalists, on the other, in Brazil, especially under the Bolsonaro government. Using data about the boards of directors of Brazil’s main companies and of the main government ministries, it brings out what amounts to an indirect relation between the two sides of this equation. It mobilizes both theoretical and empirical arguments in order to point to the idea of political dimension and political processes as a possible path to apprehend the more complex and less immediate ties between capital and politics. This does not belie the connections between them, but contradicts most of the literature, which sees a rather direct connection between them.
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    Mapping Recent Trends in the Distribution of Wealth in Brazil
    (Southern Centre for Inequality Studies (SCIS), 2023-07-19) Lavinas, Lena; Cordilha, Ana Carolina; Bressan, Lucas; Rubin, Pedro
    The interest in mapping wealth and how it is concentrated is relatively recent in Brazil, even though Brazilian society remains one of the most unequal in the world, when inequality is measured by taking only labour income and social benefits. When it comes to wealth, the picture is even more appalling. The present paper describes the recent evolution of financial and non-financial personal wealth in Brazil. The aim is to indicate how the different forms of wealth - in particular the strong expansion of fictitious capital - reshape inequalities in Brazil. It starts by contextualizing the difficulties encountered in accessing data on stocks of wealth in Brazil. In the absence of surveys on wealth, the paper describes how pensions and rental income are appropriated by income strata, using research on household spending. It then highlights how land, a real asset par excellence, is being transformed into a financial asset, attracting institutional investors and international capital. Finally, it summarizes some preliminary ideas on how the transition in the nature of wealth, driven by a financialized accumulation regime, impacts the framework of structural inequalities that have long characterized the Brazilian society.
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    Austerity Without Consolidation: Fiscal policy and spending choices in Budget 2023
    (Southern Centre for Inequality Studies (SCIS), 2023-06-01) Sachs, Michael; Amra, Rashaad; Madonko, Thokozile; Willcox, Owen
    Fiscal policy can play a crucial role in fostering growth and development by ensuring the sustainable delivery of essential public services. Managed effectively, government’s budget can help us build a common society and overcome the segregation and inequality of the past, without which sustained economic growth seems unlikely. It can also respond to temporary macroeconomic shocks to aggregate demand and livelihoods. South Africa however finds itself in a worsening fiscal impasse. There is continuous austerity, dating back more than a decade, but South Africa appears no closer to achieving fiscal consolidation. This position is steadily eroding the fiscal capabilities necessary for the state to realise the potential that fiscal action offers. Instead, the budget is increasingly becoming a drag on development.
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    The Brazilian Tax System: Regressive and Biased
    (Southern Centre for Inequality Studies (SCIS), 2023-07-12) Bressan, Lucas; Cordilha, Ana Carolina; Constantino, João Paulo; Rubin, Pedro
    Brazil's tax system plays a central role in perpetuating and deepening the country's alarming levels of income and wealth inequality. The goal of this article is to unpack the regressive and biased nature of the Brazilian tax system. It combines data from national and international institutions for the past two decades to provide a comprehensive understanding of the tax system's role in shaping income and wealth gaps. The article starts by discussing why income and property taxation, potentially progressive instruments, lacks effectiveness and make the poorest groups contribute proportionally more than the upper classes. It then argues that many forms of real estate and asset properties are not taxed as much as in other countries, which curbs the possibility of reducing social disparities. To end, the study points out some of the major flaws that prevent the system from being effectively redistributive, including issues related to tax waivers, tax evasion, and the difficulties in tackling financial wealth. The conclusion suggests that changes such as updating income tax brackets, increasing taxation on large properties and fortunes, and implementing taxes on financial investments would foster a more equitable society in Brazil.
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    Brazil Colonial Legacy and Growth Patterns
    (Southern Centre for Inequality Studies ISCIS), 2023-07-12) Lena, Lavinas; Domingues, José Maurício; Gonçalves, Guilherme Leite; Cordilha, Ana Carolina; Bedê, Francisco; Bressan, Lucas; Constantino, João Paulo; Rubin, Pedro
    This paper provides a very concise view of the trajectory of Brazil since it became a republic. It goes through the 20th century and into the 21st century to systematize how the different phases of economic development reproduced and reformatted the inequalities inherited from the country´s colonial-slave period. Its objective is to provide a timeline, framed by the structural transformations in the economy and in the political regime, which has shifted between democratic and authoritarian periods, always with a strong role for the State. In addition to characterizing the industrial accumulation pattern of what was dubbed "developmentalism", and the rupture with this pattern caused by the financialization of the economy, in the midst of the democratization process of the country, starting in the mid-1980s, the paper briefly describes how the social question evolved over time and how the oligarchic power structures remained dominant in the state apparatus and in the political system.
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    Wealth elites and their accumulation dynamics: Hyderabad City Region
    (Southern Centre for Inequality Studies (SCIS), 2023-07-05) Prasad, Purendra; Rambarki, Raviteja
    Majority of the wealth elites from Hyderabad city region emerged during the reform period (1995- 2014), benefiting from the neo-liberal policies, political patronage and nexus with caste and regional networks. In post-2014, while wealth accumulation is accounted for in terms of high growth in sectors such as IT, pharmaceuticals and real estate, our field accounts indicate that large-wealth creation also occurred through contracts in irrigation projects such as Kaleswaram, Polavaram, and privatisation of seaports and infrastructure projects. While the early structural transformation of wealthy elites from agro-based industrial economy to service sector was facilitated by agrarian surplus and land, now the structural shift within the service sector is more complex. The regional and sub-regional story of wealth formation indicates that it is not just the broader economic reforms that have brought about this change, but the structural shift from the political patronage of business to the business patronage of the political or political nexus with business. Taking into consideration the agrarian background of elites and subsequent emergence of professional classes on one hand, and diverse trajectories of business elites on the other, this paper tries to explain the current wealth-accumulation dynamics in Hyderabad City region through a political economy perspective.
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    Wealth elites of Kolkata
    (Southern Centre for Inequality Studies (SCIS), 2023-06-28) Thakurata, Saswata Guha; Bhowmik, Manas Ranjan; Basu, Riona
    In this paper, focusing on the city of Kolkata, we present a narrative concerning - a. The caste-class-ethnicity intersectionality with respect to wealth ownership; b. The sectoral dimension of wealth creation; and c. the spatial implications of the process of wealth accumulation. We study this with reference to the transition through various regimes of accumulation (pre-colonial, colonial, post-independence Nehruvian regime and post-independence neoliberal regime). We have collected data from multiple sources (including Hurun List, various secondary sources, primary data collection, and interviews). It is found that a relatively larger number of 1000 cr+ Primary Wealth Owners (PWO), as per the Hurun list, are involved in Metals and Mining sector activities, followed by sectors such as Textiles, Apparels & Accessories. PWOs from the Hurun list are diverse in terms of their wealth profile, sectoral involvement and also their social identities (e.g., community). The analysis of family background and educational attainment and affiliation, demonstrates how the location of birth tends to become critical both socially and economically. The ethnic, caste and religious dimensions of the accounting of wealth elites in Kolkata are unavoidable. The wealthy elite minority is overpopulated by the Marwaris. Bengalis are scarcely there. Religion wise this group is mainly Hindu dominated.
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    Wealth elites in Delhi-NCR
    (Southern Centre for Inequality Studies (SCIS), 2023-06-28) Thampi, Anjana; Anand, Ishan
    Delhi-National Capital Region (NCR) is an ever-expanding inter-state planning region that has occupied an important place in the history of the South Asian sub-continent. Wealth inequality is the highest in this region of the country, as per large-scale household sample surveys. We study the evolution of wealth in this region using secondary data, primary data collection, and detailed interviews. Our interviews of key informants and case studies of wealthy elites revealed five key themes: real estate, land, and farmhouses; caste and community networks; start-ups; politics and wealth creation; and investment in educational institutions. Our interviews revealed that there were three categories of elites who derived their wealth from land in Delhi NCR: land with traditional business families; the ‘babu-brigade’ that includes the bureaucrats and professionals who bought government land for a pittance between the 1960s and the 1980s; and traditional agricultural communities. Our analysis of the trajectory of wealth accumulation of elites over time reveals certain key themes and processes that have enabled the reproduction, expansion, or shrinking of wealth.
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    Renewable energy, the just transition and inequality: insights from South Africa’s renewables procurement
    (University of the Witwatersrand, Johannesburg, 2023-06-21) Cassim, Aalia; Taylor, Julia; Crompton, Roderick; Valodia, Imraan
    Low- and middle-income countries across the world are facing the dilemma of needing to decarbonise and industrialise in the context of an electricity supply crisis. The transition from fossil fuels to renewable sources of energy is one of the first steps taken in any process of decarbonisation to address climate change. The energy transition is complex and holds significant economic risk. It requires strong governance and a capable state as well as coordination across government, community organisations and the private sector. This mammoth task requires the State to adopt policies that balance social, economic and climate objectives while reviewing past policies that may no longer be appropriate. This paper discusses the de-risking approach and the investment-centred approach to an energy transition, and using the case study of South Africa, argues for the necessity of an investment-centred approach to achieve a transition which supports local development and energy security. In analysing the example of South Africa’s Renewable Energy Independent Power Producers Procurement Programme (REI4P), we highlight important learnings for the energy transition, which provide a useful window into the wider carbon transition.
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    Wealth and its acummulation in Bombay/Mumbai
    (Southern Centre for Inequality Studies (SCIS), 2023-06-21) Motiram, Sripad; Limaye, Kiran
    This paper analyses wealth in Bombay/Mumbai by considering three historical phases: pre-colonial and colonial (sixteenth century-1947), independence to pre-liberalisation (1947-91) and post-liberalisation (1991-present). For the first phase, our geographical focus is Western India and for later phases, it is Mumbai Metropolitan Region and Pune. We rely on various sources: historical accounts, secondary statistical databases, secondary literature and interviews with key informants and wealth owners. We divide wealth owners into three groups: 1000 crores and higher, 1000-100 crores and less than 100 crores (a fuzzy threshold). Colonialism created a wealthy elite through trade and newer industries. The pre-liberalisation period, saw consolidation by some of these (e.g. Tatas) and emergence of new players (e.g. Ambani), who used the regulatory framework. The post-liberalisation phase, created newer opportunities through relaxed regulation and greater space for private sector and foreign capital. The wealth story of Bombay/Mumbai differs from that of other Indian cities. Bombay is essentially a colonial product, and trade (particularly in opium) played a significant role in creating the city and shaping wealth. Banking and finance are much more important for wealth and its accumulation in Mumbai, and this has created a distinct wealth profile for the city.
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    Mapping the wealth elites of India
    (Southern Centre for Inequality Studies (SCIS), 2023-06-21) Jodhka, S. Surinder; Vakulabharanam, Vamsi
    Exploration of extreme wealth concentration and wealth elite of a given society/nation-state provides a useful ‘lens’ to the understanding of social, economic, and political processes. Besides helping in exploring economic inequities, such an exercise could also help in a better understanding of the social and political dynamics of a given society. Part of a broader comparative study supported through the Southern Centre for Inequality Studies, University of Witwatersrand, South Africa, the paper explores the processes that produce, expand/dissolve and reproduce the extreme concentration of wealth in the context of the institutional and social structures in India. The study engages with the historical and empirical processes of big wealth India by (1) mapping the historical and contemporary processes through which wealth elites have been created; (2) the changing nature of their social profile over time and across regions of the country; (3) patterns and dynamics of social ascription in the processes of wealth expansion, shrinkage, and reproduction. Thus, besides exploring the historical processes of wealth formation and mapping big wealth, the study also attempts to document spatial variations across different regions of India. Primary fieldwork for the study was carried out in four city regions, selected from different parts of contemporary India: Mumbai, Hyderabad, Kolkata, and Delhi.