New Delhi, October 21:

After a decade of dizzy growth, India appears a land of opportunity. For years the country’s big businesses were mirror images of its political class: bloated, inefficient hereditary fiefdoms that sucked up tax revenues.

However, liberalisation and a bonfire of controls, sparked in 1991 by the then finance minister and now prime minister, Manmohan Singh, released the pent-up energies of a new class of entrepreneurs, who have built firms that in some cases have come to overshadow the clan-based holdings of yesteryear.

Self-made first-generation billionaires such as Naresh Goyal and Sunil Mittal have shown that there are opportunities for the small guy to grab. Azim Premji took his father’s oil business, Wipro, out of obscurity and transformed it into one of the world’s hi-tech titans.

This being business, the empires have struck back. Using age-old connections and family business instincts honed for generations, the Tatas and the Ambanis — who control Reliance Industries, India’s biggest private company — have shown they are no pushover. These businesses have been reinvented by the often US-educated scions of the family.

Both the Tatas and the Ambanis plan investment of more than 15 billion pounds in the next five years. Another traditional company, the Birla group, will spend 2 billion pounds on one aluminium smelter project.

The difference between old and new money is stark. Old money tends to come from clan-based finances. The Tatas and their biggest shareholder, the Mistrys, are shrewd businessmen from the Parsi community, who fled to India from Persia in the 10th century and spent the last 50 years learning to manipulate India’s socialist controls. The new money brigade include either those who moved quickly into a new sector, such as the retail magnate Kishore Biyani, or those who seized the opportunities created by technology, such as Pramod Haque in Silicon Valley.

Just as instructive is the difference between China and India. India achieved eight per cent growth with just half of China’s investment and only 10 per cent of its larger neighbour’s foreign direct investment (FDI).

China’s explosive growth rests upon its vast state industries and foreign multinationals, which use the country as a manufacturing base. Economic liberalisation arrived first in China and was far more broadly based than in India.

Yet for an economy twice the size of India’s, China has few domestic success stories.