The Myth of the New India

theodp writes "An NYT op-ed on The Myth of the New India reports that only 1.3M Indians are participating in the so-called new economy of BPO, leaving 400M have-nots without a piece of the pie. Despite recent gains, nearly 380M Indians still live on less $1 a day, setting the stage for rural and urban conflict." From the article: "No labor-intensive manufacturing boom of the kind that powered the economic growth of almost every developed and developing country in the world has yet occurred in India. Unlike China, India still imports more than it exports. This means that as 70 million more people enter the work force in the next five years, most of them without the skills required for the new economy, unemployment and inequality could provoke even more social instability than they have already."

Scaremongering

Seems like scaremongering to me. It is true that a large poor population will probably result in increased social problems, such a crime. However this doesn't mean necessarily that there will be a revolt. Generally the poor are too busy trying to just g

Re:Scaremongering

Generally the poor are too busy trying to just get by to take up arms.

In the entire history of violent revolt, who, pray tell, do you think did the revolting? The wealthy elite? It has always been the poor. Usually rallied by educated youth.

Re:Scaremongering

What about the American revolution?

Re:Scaremongering

Exactly, democracy was named after its inventor, Democracy Jones, from Ohio.

And let's not forget his kid brother, Republic.

Cheers,

CC

Re:Scaremongering

"It has always been the poor. Usually rallied by educated youth."

Sorry, but it is not a matter of education or age that makes leaders. It is class and belief that make the difference. In almost all successful revolutions the leaders have been middle class or higher up the social scale, even up to the #2 guy in the country. They are people who have spare time and money.
Once you have those, leading a revolution requires two beliefs: 1) that you have the ability/skills to do the job better than the guy at the top, and 2) that you are likely to lose what you have if you do nothing.

The poor often are the victims of manipulation by both sides, and are usually tricked into doing something that is really not in their own long-term interests.

Educated youth usually just succeed in getting a bunch of people killed.

Re:Scaremongering

The last time India's educated youth took up revolt was in the '70s, when the whole world believed in people power. And it was mostly socialist. Apart from that, the only revolt independent India has seen has been religious, which, in case of Punjab, flo

Re:Scaremongering

...while the Indians are poorer than Americans, imagining someone here living on $1 a day doesn't tell you how an Indian living on $1 a day is doing.

That's why if you continue reading, they spell out exactly how someone living on $1 a day in India lives:

Malnutrition affects half of all children in India, and there is little sign that they are being helped by the country's market reforms, which have focused on creating private wealth rather than expanding access to health care and education. Despite the country's growing economy, 2.5 million Indian children die annually, accounting for one out of every five child deaths worldwide; and facilities for primary education have collapsed in large parts of the country (the official literacy rate of 61 percent includes many who can barely write their names). In the countryside, where 70 percent of India's population lives, the government has reported that about 100,000 farmers committed suicide between 1993 and 2003.

Feeding on the resentment of those left behind by the urban-oriented economic growth, communist insurgencies (unrelated to India's parliamentary communist parties) have erupted in some of the most populous and poorest parts of north and central India. The Indian government no longer effectively controls many of the districts where communists battle landlords and police, imposing a harsh form of justice on a largely hapless rural population.

The potential for conflict -- among castes as well as classes -- also grows in urban areas, where India's cruel social and economic disparities are as evident as its new prosperity. The main reason for this is that India's economic growth has been largely jobless. Only 1.3 million out of a working population of 400 million are employed in the information technology and business processing industries that make up the so-called new economy.

So, the children of the Indian poor die in large numbers. And if they live, they're not likely to do any better than their parents due to the creation of private wealth over public works. This has created an environment perfect for communist insurgencies, which India is particularly vulnerable to considering it borders China. China has a history of infiltrating and influencing it's neighbors. We know they did so both in North Korea and North Vietnam.

Sounds like more than just "scaremongering" to me.

Re:Scaremongering

Indians have been discussing these same issues since independance. Unfortunately, that's all we seem to do - discuss. We Indians are also very good at pulling down anyone who's even remotely successful. Hence we continue to languish far behind on most heal

Re:Scaremongering

Also 1.3M + 400M adds up to only 401M. According to Wikipedia, ( http://en.wikipedia.org/wiki/India [wikipedia.org] ) India has a population of 1,103M, so what's going on here?

Re:Scaremongering

A Dollar fetches a lot of things in India, and i'm surprised that a lot has been assumed and written about without checking the facts. as of today, a dollar equals about Ruppees 45.84 (that was yesterday's rates). a Dollar fetches a lot of stuff, in fact i will give 2 examples - one for the metropolitan poor man with a dollar and the poor man in the rural india.

the poor man in the metro(bombay/ bangalore) at a typical roadside joint, they dish out decent fare:
* BREAKFAST is available for as less as rupees ten
(vada pao or idli/vada = bun + potato filling/ rice pudding+spicey coconut cream & a spicey donut)
plus a cup coffee or tea for rupees four - there are small canteens that offer half a cup of coffee for rupees two, but these are teeny weeny cups (fifteen rupees for a breakfast)
* LUNCH: you have thalis for around rupees 15 to 20.
(full meal with an indian bread - roti, plus lentils, a curry, pickle, rice, a cracker, and a sweetmeat)
* Dinner: repeat the same menu as lunch

this meal is what an average indian has at his home, and this can be pretty comfortable. the variety and quality differs, but for man earning a dollar a day - ths is pretty much a luxury. the same menu as above can be had for 15 rupees lesser at lesser quality, of course - at around ruppees 30! so he has money to commute, and make a phone call if necessary at ruppee 1 for 3 minutes to a landline phone, or i minute to a mobile phone.

Poor man earning a dollar in rural areas:
there are places where the same menu described above can be had for around 25 -30 ruppees. but largely, india different from state to state, eating habits, the geogrpahy is different. but in rural areas - you could easily survive 2 days with ruppees 45.

thereare places in arid zones - north karnataka, rajasthan etc - where you get the indian bread - roti for a ruppee. so if a person consumes 5 rotis plus chillies and onions (the std fare that they have in certain areas). they can easily survive for 3-4 days with rupees 45 at hand

Sadly, there are areas where poor farmers, continue to earn only about ruppees 15 -20 per day making it difficult for them to break free from the landlords they work for. each member of the family lives on thier own, and its literally a hand to mouth existence. they barely make the cut. they might lead normal life though (but oppressed and at the mercy of the landlords).

but surviving with ruppees 45? i bet a college student or an average business man, or a an average indian easily can! of course, he need not step into a McDonalds for a burger which might cost ruppees 45 there.

Re:Scaremongering

And that's because you went in for a burger. If you choose an Indian meal, and are not very particular, there are plenty of places that provide a full meal with rice, roti (Indian bread) and two vegetables for around $0.25-0.30. To give you an idea about other expenses, a cup of tea will set you back by $0.04, a phone call $0.02 (landline) or $0.03(mobile, incoming calls free), busfare $0.1 (commuter) $1.6 (long-distance - 180km/110 miles).

As a student I used to live on about $1 - $1.5 a day. This took care of all expenses including food, going out for movies etc. (But did not include clothing, and rent, which came to about $60 - 70 a year. College tuition (CompSci) came to $35 a year). Of course, I studied in a small university town and things are more expensive in the big cities. At the same time, it gets much cheaper out in the small towns and villages.

Re:Scaremongering

These prices are way off, Vivtho doesn't seem like the normal guy or this was 10 years ago. Its not so simple.

tea at roadside shack 4 rupees=$0.11
tea at restaurants 10-25 rupees=$0.25-0.5
tea at 3-5 start hotels=50-150 rupees=$1-3

For single person
Full Indian meal at shack 25 rupees=$0.5 to 1.0 + doctor bills
Full Indian meal at decent restaurant 50-150 rupees= $1-3 dollars
Full Indian meal at 3-5 star 500-5000 rupees=$10-100

Mobile costs prepaid 2-3 rupees a minute=$0.04-0.06 a minute plus $3-6 dollars fixed costs for the pre paid card depending on value of recharge voucher
postpaid 1-2 rupees a minute= $ 0.04 a minute plus upfront monthly charges of around 200-500 rupees which is $4-10
All local calls, not national.

Average busfare for local commutes is around 10 rupees=$0.24
for intercity for instance Pune to Mumbai(Bombay) which is 180km by AC bus is around 200-250 rupees which is around $4-5

Average rent in small cities where Information technology would be present like Pune is 7000-15000pm depending on location for a I bedroom flat=$150-330 and 8000-20000 for a 2 bedroom flat=$180-400

For cities like Mumbai its equivalent to any other international city

College tution in IIT or other decent engineering colleges is around 120000-200000 rupees Per annum =$2600-4500 MBA at IIM is similar and more. ISB for isstance charges 1.6 million rupees per year which is $35000

Purchasing power parity is a joke, the costs add up, some things may be cheaper intially but other things are not. My monthly cellphone bills are $40, broadband 256kpbs is $30 pm (the cheapest available at the moment here), cable TV is $10 pm

I pay around 9000 rupees per month as rent which is around $200, I pay around 10000 rupees ($250 per month for my car loan for a Suzuki Baleno, a relatively cheap mid size car which I bought for 575000 rupees($13500)

Re:Dear Author, pls do your homework correctly !

It's funny how Indians are so myopic about their own country. Despite dozens of studies by the UN and the WHO, they're in a perpetual state of denial. One merely has to walk down the street in India to see just how bad the conditions are. The child death

Watch Out

I guess we'll just have to outsource some more jobs.

Re:Watch Out

http://www.hindu.com/2006/07/04/stories/2006070407 171000.htm [hindu.com]

Now you know the H1 program is really screwed-up.

Cultural Problems

The problems go beyong economic to cultural. The problems stem from thousand years old caste systems, people being born into a status and being unable to leave, thereby restricting upward mobility in the most powerful sense. For any nation to really rise to what it can potentially be (The US included) we need to abandon our primitive thought processes (and we all have them, every country on this flying rock)
Note: This isn't racist, or culturist, or any thing else -ist. And if you think it is, I no longer care.

Re:Cultural Problems

If the reason is cultural, how come before 1800s, i.e. before British took over India, India had been either the richest country in the world, or the second richest from 1CE to 1800s?
Here are the numbers in various centuries from The World Economy: A Millennial Perspective by economic historian Angus Maddison
Country GDP($millions)1CE 1000 1600 1700
World 102536 116790 329417 371369
India 33750 33750 74250 90750
China 26820 26550 96000 82800
M. East 16470 16470 36725 40567
W. Europe 11115 13723 43000 45000

Don't blame ills of a socialist economy on cluture

Re:Cultural Problems

>Don't blame ills of a socialist economy on cluture

Spain had a whole lot of gold and money during the 16th-17th centuries, yet there was an important segment of the population who were living in extremely hard conditions. GDP in the 1600s? That's almost meaningless, unless you look at WHO had that money. I assure you it wasn't even remotely _evenly_ distributed.

Re:Cultural Problems

Ah... you should check your history on the American Revolutionary War. The Americans lost engagement after engagement and was on the brink of destruction for most of the war. The French helped a lot - Ambassador Benjamin Franklin was instrumental in getting England's primary rival involved. The Americans also pioneered assymetrical warfare and fought "unfairly" (in the eyes of the British) - helping to make it unpalatable to continue to occupy (note to the American occupiers today, ironically).

Now, the Americans did hang tough... against all odds, against all conventional reason, against a vastly superior military force for a stand on liberty, freedom, and justice. For that, we should be very proud of our forefathers. But make no mistake, Americans did not kick Britain's ass almost the entire time, and certainly not by ourselves.

Re:Cultural Problems

They did what the Spanish did to the Aztecs, they played off internal rivalries. They made seperate deals with competing rulers to fragment them and prevent them from seeing the bigger threat. If any one ruler tried to resist they could either have a com

Re:Cultural Problems

The problems go beyong economic to cultural. The problems stem from thousand years old caste systems, people being born into a status and being unable to leave, thereby restricting upward mobility in the most powerful sense. For any nation to really rise

Re:Cultural Problems

I think your posts pretty much shows that there is a functioning caste system in India, even if it has been greatly overhauled to help out the "lower" castes.

I mean, look at the language you use. "Backward caste" "Lower caste". I'm not saying that India hasn't made great strides; obviously it has. But just looking at your post gives one a sense of how deeply ingrained it is culturally.

Similar arguments can be made about race in the U.S. Many deny that racism exists, but from an outsider's point of view (as I am an outsider observing India), clearly there are major remnants of institutionalized racism in the US, despite the great strides that have been made.

India is changing in the face of thousands of years of culture. Clearly, the change is not going to happen overnight. As in the US, there are forces of resistance to such change, so those who want the culture to change must continue to work for it. The first step is to look within yourself and be aware of those old attitudes you might hold. (It's easier for me to advise you to do this than it is for me to do it myself. However, I think that to bring about the world we both want to live in, it's necessary for both of us to do this.)

Re:Cultural Problems

I mean, look at the language you use. "Backward caste" "Lower caste". I'm not saying that India hasn't made great strides; obviously it has. But just looking at your post gives one a sense of how deeply ingrained it is culturally

That is not something I

Re:Cultural Problems

I am proud of belonging to the oldest surviving line of philosophers, mystics and poets. Does that make me a casteist?

Yes, because you're evincing pride in achievements you haven't made, by people you had no way of influencing. You've done nothing to deserve the pride you feel. It's this innate and undeserved feeling of superiority that makes you a casteist.

Berlin Philharmonic Orchestra?

I suppose BPO is probably more likely Business Process Outsourcing [wikipedia.org].

(Thanks, wikipedia. No thanks, editors: the term isn't even used in the linked article.)

First let me say

that middle class is very important to any economy. Costco's CEO [reclaimdemocracy.org], who earns 200K a year, gets this. Wal-mart does not.

1.3M may not be much, but it is more than before, and these people spend money and so that money reaches more people than just them.

Unlike China, India still imports more than it exports.

http://www.cia.gov/cia/publications/factbook/geos/ us.html [cia.gov]

USA
Exports:
$927.5 billion f.o.b. (2005 est.)

Imports:
$1.727 trillion f.o.b. (2005 est.)

From:

Re:First let me say

Correct.

This is normal for a post-industrialised service economy. You import more than you export and your primary growth is in the services industry.

The important words here are "post-industrialiased". US was an agricultural economy all the way up to WW2. It became an industrial power as a result of WW2 and it is now moving towards a services driven economy. Most of Europe is quite similar.

India is trying to become post-industrialiased society before going through the industrialisation stage. That does not work. Every single attempt to jump-start a civilisation across an "age" in human history has finished with a failure. Either a social revolt or a regression back into the old state once the "jump the age" financial drip feed is withdrawn.

This is one thing Chinese got right. They are going for an industrialiased society first. Many other reasons aside, industrialiased society is also much better at equalising the overall living standard across a country. Service oriented society is going in the absolutely opposite direction by creating new living standards drifts and divides. Just compare the living standard differences across England at the height of industrialiasation and now. Now they are actually much higher.

And I agree with many posters. India is heading for social trouble full steam ahead. There will be no USSR to supply "assistance" this time, but things like this happen sooner or later without external assistance. And a social revolt in a nuclear power is not a scenario I would like to think of. Plenty of other depressive things around.

Re:First let me say

India is trying to become post-industrialiased society before going through the industrialisation stage. That does not work. Every single attempt to jump-start a civilisation across an "age" in human history has finished with a failure. Either a social re

Difference between India and China

I agree with the article that while India and China have been twin rising stars in the tales of ideological globalists like NYT's Thomas Friedman, there is a huge difference between the two : while China will be a superpower by the end of this century, at that time India will still be a third world country by far. With its caste structure, its irremediable lack of infrastructure and ressources to support its population, its relative submissiveness to western political pressure, the tendency of its educated elite to go live and work abroad the second they have a chance to, the best that can happen to India in the mid term is to nurture a developped sub-economy that will give it the global importance of, say, Italy, the UK or France.

"Superpower" is over-rated...

while China will be a superpower by the end of this century, at that time India will still be a third world country by far

USSR was a "superpower" for decades. Life in it sucked big time. Living in Italy, the UK, France, or even India, would've been much better — if only for the possibility to leave, if you wanted.

West chooses dictatorship over democracy

India is a democratic nation where its citizens enjoy certain unalienable human rights. Its people have full rights to form labour unions. Its political parties must not only appeal to the electorate but they also need to compromise their policies with those of other government parties, follow the rule of law and last but not least perform well enough to earn re-election.

In China the ruling Communist Party (CCP; with policies closer to a capitalist fasist party) does exactly what it wants in order for China to become the greatest power on earth under their rule. Sacrificing their people and even swallowing up neighbouring nations to reach that aim doesn't bother the CCP dictatorship one bit.

Case in point: The CCP recently finished the building of the massive Three Gorges Dam. Millions of locals had to be relocated with much if not most of the meager compensation stolen by opportunistic party officials. People attempting to report facts about it face arrest, suspicious muggings or worse.

In India far smaller dam projects face long delays or even cancellation because the locals have various means of defending their rights.

In China, business people with the right guanxi (political connections) can take over anyone's land and if the locals riot as their last recourse, the Party's paramilitary police will quickly take care of it.

If democracy and basic human rights meant anything to Western business people and Western politicians who are responsible for the "rules of engagement", the West would choose to invest in and trade with democratic developing nations (like India) instead of expansionist totalitarian regimes (like China).

As long as democracy and basic human rights are only paid superficial lip-service by the West, free countries will lag behind the dictatorships. Beside the West losing (selling out) its fundamental moral foundations, such policies will also encourage developing countries to adopt the more dictatorial forms of government since they are proving to be more beneficial in terms of foreign investment. In fact China is increasingly channeling its own foreign investments into Central Asia, Africa and South America, further undermining the West's half-assed efforts at encouraging democracy and human rights in those countries.

Democracy and human rights certainly incur some financial costs but are we surrendering it all up just to help global corporations rake in short-term profits? It wasn't the corporations who suffered when the Stalins, Hitlers, Maos and Hirohitos went on a rampage; no, it was people who took the bullets in the name of their continued freedom.

If today's people still value those ideals, then global trade could easily be harnessed as a force for good. If countries like India were to be given preferential trade treatment over expansionist dictatorships like China, it would force the Chinese people to rethink their system and policies instead of giving them an edge over free societies.

There's just one answer

And that's to make more pie.

It's True

Being an Indian American and having been to the region often I agree with this article. The many wealthy which reside mostly in the cities are extremely snobby and will go to great lengths to show off their wealth all alongside with children who beg in the streets struggling to find clothes and food to simply stay alive (oh but then i'd be getting into the whole thing about the rich not caring about the poor yada yada yada...its still sickening). The Chinese have dealt with the issue of painful hunger and the Indian government must tackle this issue as well. I do believe that it will be a rough route to go even if the government goes through with such a plan simply because of the diversity that exists in India. Despite the general pride that the country shows, at some level it is undeniable that there is fragmentation with the many cultures that India encapsulates. Some parts of the country, as stated in the article, have also elected communist governments which undoubtedly impede progress as they threated to break a very delicate coalition every time their demands are not met. I believe progress will be slow, but there will be progress as a new highway system that is sweeping the nation will bring economic opportunities to the regions which are not so "software proficient." At least there will be a shiny new road, one that is not made of cheap construction substitutes, to economic opportunity.

Ya gotta start somewhere

You can't take hundreds of millions of people from a state of impoverishment to the land of overflowing McDonalds (and bellies) overnight.

Re:Ya gotta start somewhere

You can't take hundreds of millions of people from a state of impoverishment to the land of overflowing McDonalds (and bellies) overnight.

How about a giant liposuction pipeline from west to east?......well, it looked okay on paper.

Think about this

I have been to India recently. A dollar a day is really more than you would think; it's about 43 Rupees. With this many Rupees, you can easily buy a day's worth of meals. You have to understand the culture before you can start throwing out your ideas about how to fix their economy. In the minds of many in India, change is just not important. Money is not important even, like in our part of the world, but rather things family, friends, and morality. I'm not saying there isn't problems; but before you go working on the masterplan to save India, you might want to talk to them.

Just my $.02.

Indian way vs American way

American century was made not by the people of USA imitating any other country but defining their own principles and working on it. Every other nation wants to become what USA is today - rich, powerful and dictating to the world.

If that is the way New India is going to emerge, it is not going to be. We have a saying, a cat should not brand itself to become a leoperd. India can not mindlessly follow the American success story and carry all the Indians along. We need a unique Indian way which is not capitalist, not communist, not socialist but Indian.

We have a rich tradition and had tall leaders leading us. We try to substitute everything with western values as in China. There is a better way. India can show to the world how to solve the problems of consumption driven economies of the west. We can evolve systems, practices to build a new type of economic development and social order. That would be the contribution of India to the world, not trying to be another China or USA.

Deficiencies in the article

It was not so long ago that India appeared in the American press as a poor, backward and often violent nation, saddled with an inefficient bureaucracy and, though officially nonaligned, friendly to the Soviet Union. Suddenly the country seems to be not only a "roaring capitalist success story" but also, according to Foreign Affairs, an "emerging strategic partner of the United States."

Has the NY Times been asleep for the last 15 years? Because it's been 15 years since India began reforming its economy. The present Prime Minister was the finance minister at that time and was responsible for opening up India's economy, which, till then, had been a disgusting molasses of socialism (and crawled along at around the same pace). The USSR died many years ago. Since then, India has been realigning itself according to its self interests. The idea of a strategic partnership with the US seems natural to many of us in India because the other option is a totalitarian China right at our doorstep.

But trade and cooperation between India and China is growing; and, though grateful for American generosity on the nuclear issue, India is too dependent on Iran for oil (it is also exploring developing a gas pipeline to Iran) to wholeheartedly support the United States in its efforts to prevent the Islamic Republic from acquiring a nuclear weapon.

WRONG! India has voted against Iran at the IAEA twice and has supported further action against Iran. The Gas pipeline was in the conception stage and has pretty much been put in the background, not only because Iran's developing nukes, but also because they aren't honouring their own commitments.

Nor is India rising very fast on the report's Human Development index, where it ranks 127, just two rungs above Myanmar and more than 70 below Cuba and Mexico. Despite a recent reduction in poverty levels, nearly 380 million Indians still live on less than a dollar a day.

This is true. And we're ashamed of it. But that doesn't imply that nothing's been done to improve their lot. Recent steps include the National Rural Employment Guarantee scheme etc.

Only 1.3 million out of a working population of 400 million are employed in the information technology and business processing industries that make up the so-called new economy.

The author has a fetish for these so-called new economy companies. We don't. We have Pharma cos that are setting up plants left right and centre, we have steel companies fighting each other to be allowed to set up plants, we have automobile giants like Scania and Maan coming along, we have huge infrastructure projects being developed, and so on and so forth. The author would do well to remember that while only 1.3 million people may be employed by the sunshine industry (as other cliches go), more than 300 million people form the middle class. Think about that number. That is the population of the US. I come from the middle class myself. And life isn't a daily struggle for survival as most will put it. Life is comfortable. Life is good. You might want to consider why so many young graduates are preferring to stay back in India for work instead of going abroad.

No labor-intensive manufacturing boom of the kind that powered the economic growth of almost every developed and developing country in the world has yet occurred in India. Unlike China, India still imports more than it exports.

We import more than we export because we're an economy fuelled by domestic demand, unlike China which has become the world's supermarket. The middle class is consuming products which are being manufactured here or are being imported. I'm not an economics major, but from whatever I've read, I can tell that this is definitely a good thing.

This means that as 70 million more people enter the work force in the next five years, most of them without the skills required for the new economy, unemployment and inequality could provoke even more social instability than they have already.

The author is right, and pessimistic.

The facts that the author of the article presents are absolutely true. There can be no question that life in India is miserable for a vast number of people, in cities, towns, and villages. Communal and caste-based tensions do exist in many places.

There is also no easy way out. Every $ or Rs. that is spent in India helps. Every cent of Investment or export by India helps. Much of it trickles down to the poorest in the cities and villages.

What's needed is an increase in literacy and increase in jobs. Neither of these are short-term, easily achievable goals.

Manufacturing must increase - providing opportunities to semi-skilled workers. Efficiency must increase, allowing for cheaper goods and trickling down to more profits for the millions of small businesses. Farm efficiencies must increase - through better processes or crops. Farmers must get a bigger share of the final price.

While all these are very important issues, the sheer size of India prevents easy action on any of them. We will get out of this mess, it will take time and money.

The author seems to know a lot of Indians who have settled abroad. I know a lot of Indians who've come back or are planning to do so very soon. They're bringing investment with them, they're bringing the contacts and business knowledge that will help them serve customers in the US or Europe. And they will each bring jobs for a few more people.

If the only way we can earn the money is through taking the high-tech jobs of Western countries we're not going to say no. If we can earn money by designing and launching satellites for small developing countries, we're going to do that too. If we can earn money by taking every service job in the US or Europe that's up for grabs, well, we're going to do that too.

India may become the back-office for the rest of the world, we'll still have people left to do other things. India may end up doing most of the unwanted service jobs for the rest of the world. India may do very high-technology services for other countries. That's fine too, because a billion people need a billion different things to do.

The West has drained an incredible amount of wealth from India/China/Africa/America and used it to kick-start their own economies. Two hundred years of plundering cannot be undone in a few dozen years. We're on our way back up, and we'll get there.

All of us have not fallen to the myth of Western superiority in economics due to any inherent advantages. We know what the Western economies owe the rest of world. We don't have the option of plundering other countries' natural resources or enslaving millions of Africans, Indians or Chinese people. We have to get out of this hole with only our own resources. And if it's going to take a century, then we're going to take a century. You can either help us, or hinder us.

ill-informed author

there are too many factual errors and at other places the emphasis is completely wrong. i can go and show these line by line, but let us look at some of the obvious errors: "stock market, ...fell nearly 20 percent in two weeks, wiping out some $2.4 billion ... in just four days" The above calculations implies India's stock market worth of $9.6 billion. Companies like TCS, Wipro, Infosys, Reliance, ONGC etc. EACH have more market capital than this. "As if on cue, special reports and covers hailing the rise of India in Time, Foreign Affairs and The Economist have appeared in the last month." Looks like author believes that TIME and Economist are ill-informed. "India is too dependent on Iran for oil " India buys Iranian oil at market rate. What is wrong with that? "country's $728 per capita gross domestic product is just slightly higher than that of sub-Saharan Africa" How many economists are needed to tell the author to look for PPP instead of GDP? Besides, in 1980s, India's GDP was below that of GDP of almost all the sub-sahara African nations. So this is not a bad achievement. "India will not catch up with high-income countries until 2106." Ten years ago, the same was said about China by magazines like Economist. "accounting for one out of every five child deaths worldwide;" 1 out of 5 children are in India. So this is just an average. "100,000 farmers committed suicide between 1993 and 2003." Per person, suicide ratio in India and USA is similar. Also there were more than a million suicide in India in the same period. So 10% of them happened to be farmers is not odd given the fact that farmer population in India is atleast that much. "The potential for conflict -- among castes as well as classes -- also grows in urban areas, where India's cruel social and economic disparities are as evident as its new prosperity." First the author has clubbed the two things: classes and castes. Here are my questions: 1. Can you show me any example of caste conflict in urban areas? 2. Can you show me any example of class conflict in urban areas? "The main reason for this is that India's economic growth has been largely jobless. Only 1.3 million out of a working population of 400 million are employed in the information technology and business processing industries that make up the so-called new economy." Ever heard of trickle down effect? Let me explain. The 1.3 million job in IT sector are high paying jobs. These people employ large number of people in secondary jobs from school teachers to bank officers. Suppose instead of 1.3 million IT jobs, India had 5 million in small sector jobs (Indian govt favorite darling). In this case, most employees would be dependent on govt for welfare in areas of school, medicine etc. Besides these people would contribute more toward all the ills that the author has talked about from infant deaths to malnutrition to suicide. "But the anti-India insurgency in Kashmir, which has claimed some 80,000 lives in the last decade and a half, and the strength of violent communist militants across India, hint that regular elections may not be enough to contain the frustration and rage of millions of have-nots, or to shield them from the temptations of religious and ideological extremism." Again author has clubbed two totally unrelated things. The Kashmir problem is India-Pakistan conflict left over from the partition of India in 40's. The communists on the other hand are supported by the same like minded people as the author of the article (look at other similar articles and you would find that most of them are communists. E.g. Praful Bidwai). "Many serious problems confront India. They are unlikely to be solved as long as the wealthy, both inside and outside the country, choose to believe their own complacent myths." Who says people are complacent? Absolutely not. Most wealthy people in India and abroad recognize all the problems that India faces and they are working hard toward solving them. Some of them in the process get rich and communist people author o

Multiple versions of truth

India is really a sad country, most of us are immune to this, we'd rather not face it. When I first came here as a naive 16 year old 10 years ago the poverty even in a city like Bombay shocked me, there is too much suffering here.

In villages the caste system is alive and well with lower castes living on the periphery and not sharing even the same resources like water. In cities you don't see it untill its time to get married, then even the most educated Indian becomes caste conscious. We are very religious as a people but not moral, for us sex and public posturing is more about morality, as individuals we have no integrity which reflects in the massive amount of corruption, how other Indians less fortunate than us are treated. For instance you could be praying all day and yet have little qualm in mistreating the people who work for you. The state and its various arms have no respect for the people, unless you are someone important even the most basic decencies are not extended.

This is everday life, there is a VIP culture, a culture of servitude which means that no rules are followed, no system adhered to, anything goes if you have the right connections. Thats why the environment is a mess, and administration ineffective. Whatever little resources is available is wasted.

And you can't run away from a population of 1.3 billion ever increasing. Even the most talented and commited administration can't solve this over the next 100 years. We can't have a welfare state and provide even bassic amenities. We will always judge ourselves by standards that are significantly lower than any western country. I think Europe at the moment is the good example of how to get things right. But indians will point to morality, as if they have a monolopoly on things like family values and caring for kids, what about trying to give people a decent chance at having a life, that's not important in the face of pretension and posturing. So every small success is magnified. We are insecure so any response to this article can only be defensive. But if we don't recognize the problem we can't solve it. We are inadequate, the systems and laws are there but we can't implement anything because of a overwhleming lack of integrity.

On the business side, the IT revolution has definitely made life better and its another small step. Companies are profesionally managed nowdays, no bosses wife intefering in your work. People are better paid. More people earning means more spending and this has a roll on effect. But we are not innovating, india has not innovated. BPO and IT services is the most boring work in the world, there is money but no challenge at work. We don't have a culture of R&D, taking a risk, making a product, and taking it to market, we don't have the appetite for that sort of invstment with no guarantee of returns, so much easier to to mop up service contracts, hire people here and refine a process and take the money. No risks. So don't compare this to Silicon Valley, thats a bit of a joke. The pharma industry have a similar business model, and here things could get dangerous especially with no effective regulation and human testing.

The entire world is living on science and technology that really picked up with the renassiance. We should not be shy to acknowledge this. Western civilization is the moden world, its a massive achievement for as as humans and as cultures we should learn form this human achievement and not try to posture about our failures so far.

What a dollar buys in India

I read quite a few posts talking about what a dollar can buy in India, with most examples talking about a meal at a restaurant or a road side shack. That seems to be from the perspective of a "college student/single guy" outlook.

Another way of looking at what a dollar can buy is by looking at what the corresponding monthly expenses would be like. Eating out is sort of a luxury/uncommon in many places in India (let alone, gasp, everyday!). People cook at home -- and that gets the costs down significantly. In fact, I remember reading somewhere on how one can have a healthy meal for dollar a day per person in the US (something about buying things that are in season, etc.)

A dollar a day is very low for one person even in India. The picture may appear more depressing if we look at that money from the perspective of western eating habits.

S

Misinterpreted article! Its surely not that bad.

The article misinterprets facts in many ways. There are some facts. Overall the picture looks good, not that bad as mentioned in the article and there is hope. But I rather call them as challenges than bad. They are not to be ignored. But there is no silver bullet either. If you discuss with people from India, while they are proud of the growth, they are don't hyped about it as the media reports. World media is worried since they had to drastically change the way they portrayed India for a long time.
Here are some views on India's growth gathered from various sources.

Media Image
Why is every one so surprised by India's growth? It has to do with the image of India portrayed by world media. The image portrayed was that of a poor country with a huge population aligned to the communist Russia. Few years back we never saw a an Indian multi-lane paved-road in the media, even when they existed in may places. Today media is forced to change that image as more and more people are visiting India. World media is worried since they had to drastically change the way they portrayed India for a long time.

$1 perception
As many pointed out in the replies, $1 is much more than most of us know. A loaf of bread is $1.5 (Rs67) in US is about $0.2 (Rs10) in India. While gas price is higher than in US, the MPG of most of the vehicles are much higher than in US. And many ride motorbikes that have 120MPG. So comparison is not apple-apple when you say Oh my God, people live in India for $1 a day.
I saw comments mentioning that the meal for less than $1 is in roadside shack. That is not true. Go to the wealthy part of the city and try to eat for a $, if we get one, that may be in a shack. If we go to the villages where poor people live, you are surely not going to see a star rated restaurant. But believe me, I have had and, most places we can eat food without upsetting stomach. But as the same person rightly pointed out most of the people cook food at home. And don't forget they grow vegetables at home and may be one cow or goat for their milk.

World has changed
No one is saying India will have an easy walk. World is different than it was during the industrial revolution. This could be a new form of economic revolution. And the background of the countries are not the same.

Wealth ratio
- Ratio of income earned by a country's richest 10% and the poorest 10% is 7.3.
That is, the richest 10% of the population is a little over seven times as rich as the poorest 10%.
- China which has a ratio of 18.4.
- United States 15.7.
This numbers show that the gap of wealthiest and poor are much better than many wealthy countries.

Middle class growth
When we say the percentage of middle class is growing, what does that mean? It means people from lower economic class is joining middle class. Isn't that good? There is no silver bullet, it cannot happen in a day or few years. It is improving at a good rate, given the population.

Per capita income
- In 1996, India had a per capita income of $380.
- In 2004 India's per capita income has risen to $620.
- While many other Asian countries have not got that seen that growth.

Growth Rate - a different view
- From 2000 to 04 with annual growth rate of 6.2%.
India was not second but the 17th fastest-growing nation in the world.
- From 1990 to 2004, India moves up to being the fourth fastest-growing economy, behind China.
- From 1980 to now, India does indeed come secondbehind China.
- It is this that gives the big hope to India - Consistent and steady growth - at least till now.

Challenges are not just in India.(from BBC article)
- Rising inequality is largely a concomitant of globalization and, hence, for a single country to take action against this is to take the ri

Re:Does it look like Texas

Maybe not New Texas but it sure looks a lot like Iran under the Shah. Small pockets of good economic growth while the rest of the country lived in abject poverty. It brought on a revolution which put the Islamic theocracy back into power.

Re:Does it look like Texas

Small pockets of good economic growth while the rest of the country lived in abject poverty.

Especially the people that are of little use to the rulers are subject to poverty. Time for a proper democracy combined with literacy.

Re:Does it look like Texas

This is a terrible analogy. There are so many differnces between India today and the Iran of the Shah. Firstly, there's no massive Islamist movement. There was a hugely successful Hindu nationalist movement but again, most of the truly extreme "hopes" t

Re:$1 a day? let me tell you about $1 a day.

I don't think you understand the depths of poverty people living on $1 a day reach. Think of the same lifestyle as a homeless person here, except with no social services, no soup kitchens, no shelters. Not even the shopping cart full of junk. Doesn't seem too exciting to me, but maybe because I've lived next to such people for most of my life.

For 12 years I lived on $10 a day. That's living a low-end grad student lifestyle - i.e. just enough for dialup, a mid-range computer, tiny apartment, the bare essentials. $20 a day would probably get you the same lifestyle as a lower middle-class US worker.

$50 a day would probably better fit your definition of "comfortable" - still quite doable, especially if you sink some money into a local business.

Also note, as more and more money flows back into the country's economy, cost of living goes up (as there are lots of these young call-center workers who can afford more stuff), so in a few more years, plan on moving somewhere else. Africa?

Re:So in other words

You are forgetting something.

The executives making the decisions are making
lots on inflated stock prices.

See? It is OK. And those executives will need
lots of servants around the house, and those cant
be outsourced.

Never mind in 10 or 20 years, the companies in the
countries being outsourced to will have all the
expertise they need, and the American partners will
be told to pound sand. And the weakened American
middle class will not have what it take to float
things along.

Re:Predictable Responses

We saved you in World War II, so go to hell! If it weren't for us, you'd all be speaking German now!

But I *am* speaking german?!?

Re:English?

Your statements are incorrect at so many levels that I don't even know where to begin. Let's try though:

Official National Language: Hindi Other National Languages: 25 Religions: Everything religion ever practised on Earth because even a minority here is in millions. Ofcourse Hinduism is the dominant religion.

http://en.wikipedia.org/wiki/List_of_national_lang uages_of_India [wikipedia.org]

English is a language used only in cities and in some parts of the government. To my European colleagues I explain it thus: Think of the EU as a single country with all your languages, cultures, religions(though they are all based on Christianity), etc. Now mulptiply that problem by 100 and the population by 9 or 10 and that is India.

And its almost funny when you say that a nation with over 5000 years of _written_ history would be eager as a puppy to 'absorb' a 300 year old country's culture and stored-up 'ideas'. Sure, the US media has managed to reach global audiences and create a homogeneous MTV generation. And some of that can be seen in Indian cities. But that is probably India has assimilated foreign influences over the millenia, not just by copying them, but by choosing what they like in them. That is the only way to survive as a people if you don't want revolution every few hundred years. But the western world may disagree...