Capitalism in India: The Unfortunate Trend of Talent Migration

Capitalism in India may be frequently discussed, yet a significant number of enterprising citizens are leaving their homeland to amass wealth abroad. Fintech influencer Akshat Shrivastava refers to this phenomenon as “crony socialism dressed in market terms.”

In a post on X, Shrivastava, the founder of Wisdom Hatch, highlighted a recurring economic irony: Indian states are rich in cultural heritage and talent; however, their most driven residents often migrate to secure better opportunities in international locations or metropolitan hubs.

The Migration of Talent

Shrivastava noted that while “Kerala is a remarkable state,” those aiming for financial success often look to the Middle East. Similarly, he pointed out that residents of Bihar move towards Delhi or Mumbai, while those from Telangana frequently head to the United States.

The Economic Framework

Shrivastava emphasizes that India’s economic structure remains inherently socialist, even with its pro-market claims. He stated, “At our core, we are a socialist state, merely pretending to embrace capitalism.” He believes that genuine capitalism should respect capital and reward risk, which would encourage individuals to remain in their communities and cherish their cultures.

Supporting Data

Evidence backs this claim. In 2023, over 2.1 million Keralites were employed in the Gulf, contributing ₹1.25 lakh crore in remittances—almost 30% of Kerala’s Gross State Domestic Product (GSDP). Bihar, which accounts for 9% of India’s population, represents only 4% of the national GDP and is known for significant out-migration. Despite the tech growth in Hyderabad, Telangana continues to export highly-skilled talent, particularly to the U.S.

The Cultural and Economic Dilemma

The issue, according to Shrivastava and other experts, is both economic and cultural. He remarked that “India does not reward risk-taking,” attributing this to high effective tax rates, a compliance-heavy business environment, and policies that support consumption rather than creation.

A Call for Change

Shrivastava’s post advocates for a reevaluation: a capitalism model that aligns with Indian values yet is liberated from systemic disincentives. He cautioned that “unless entrepreneurship is rewarded and the demonization of wealth ceases, the finest talent will always seek validation elsewhere.”