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."

Berlin Philharmonic Orchestra?

[Alfred, Lord Tennyso]

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.)

Re:Scaremongering

[nebaz]

What about the American revolution?

Re:Scaremongering

[Vicissidude]

...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:doesn't add up?

[megaditto]

Small children not counted as workers, perhaps?

Re:Scaremongering

[stony3k]

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 health indicators, inspite of having produced numerous very fine physicians. And the govenment has only helped to make matters worse, by pretty much ignoring the rural sector. However, the best hope for the country is that the rising middle class will eventually force a change.

Deficiencies in the article

[hopethisnickisnottak]

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.

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

[Langdon]

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:Cultural Problems

[hopethisnickisnottak]

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 invented. It is how the government and they themselves refer to themselves. What am I supposed to do? Call them the caste-formerly-known-as-the-lower-caste? Sheesh!
If a white person in America is proud of the achievements of all the white men that came before her and if she knows the difference between the races (but doesn't give a flying fuck about the differences), does that make her racist? I am proud of my caste. I am proud of belonging to the oldest surviving line of philosophers, mystics and poets. Does that make me a casteist?

As in the US, there are forces of resistance to such change

You know, the funny part is, I never gave thought to this whole issue of caste until I came up to the undergrad level. Over there, in spite of having really good marks in the entrance test, I didn't get through to the college I wanted. Why? Because I was born in a higher caste. So half the seats went to people from the lower caste who hadn't got two thirds of the marks I had. That was when this whole caste thing cropped up.

And with all due respect, casteism these days is practiced the other way round. My uncle, his father and grandfather before him, had practiced medicine in a village a hundred kilometres from Pune. Whole generations had been treated by them from birth to death. But now, these same people who got excellent medical care at my uncle's hands are contesting that since he's a brahmin, he should leave the place (without being adequately compensated for whatever medical infrastructure he raised almost single handedly) and should hand over his hospital to a young upstart who belongs to the backward caste. THAT IS CASTEISM today.

Re:Scaremongering

[krayfx]

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

[vivtho]

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.

ill-informed author

[u19925]

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 of the article feel jealous of their achievement and write such venomous articles.

Re:Watch Out

[univgeek]

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

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

Re:Dear Author, pls do your homework correctly !

[Afrosheen]

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 rates are unbelievably high and the gaping maw between the wealthy and the poor only continues to grow. Plus the poor are extremely uneducated with a national literacy rate of only 65%. Even with the US having 12% living below the poverty line, we stand at an excellent 99% literacy rate.

  The link you posted to the CIA factbook was wrong. From the factbook, on poverty in India, they say "Population below poverty line: 25% (2002 est.)". So that's 4 years old to begin with.

  The infant mortality rate is rather high, and if 1 in 5 children in India die, that's pretty damn bad. Luckily for India, and according to the factbook, there are 24 births for each 8 deaths so the population should continue to explode as long as people have something to eat, and with women averaging 2.73 births each, so much the better.

  Actual link to the CIA factbook is http://www.cia.gov/cia/publications/factbook/geos/ in.html [cia.gov] .

  It's not nearly as rosy as Indians would have you think. Why do you think they send their best doctors and scientists overseas? They're not doing it to do the world a favor, they're doing it to escape desperate poverty, a wrecked environment, and the depressed state that is India.

Re:Cultural Problems

[Walkiry]

>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:Scaremongering

[Clueless Nick]

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, floundered mostly because there wasn't much merit to the militants' grouse. The other example is known well by everybody, and may not be resolved till another millennium, or till fossil fuels run out. There was a time when the poor were oppressed by the rich, mostly businessmen. That was a good time to revolt, because the enemy was identifiable. Now, however, the oppressors are mostly the people voted to power by the very class. Lower castes have much less to complain about as each year goes by, and the Governments go on introducing and increasing quotas everywhere, which is why students from the highest echelons of society have been holding mass protests recently. Yet, there is not much chance of a popular revolt, as there is no common cause, no tangible reward. And in such a competitive land, where hundreds of thousands appear for the toughest tests in the world (read Civil Services and Chartered Accountancy), nobody can afford to let a day go waste. India's current problems stem largely from votebank politics and greedy politicians (who are naturally supported by business and vested interests all over the world). Change is slow, growth is uneven and casualties are many, but the results are there for anyone to see and believe. -clueless

Re:Over-hyped.

[XchristX]

Three years ago, few people in India had heard of cellphones, now, even Hijras run around with ipods (I've seen 'em in Calcutta) and slum dwellers in Narayangaon (a small village in rural maharashtra) have a basic mobile.

  Don't be a typical self-hating Indian and pander to these useless liberal India-haters here. We're not there yet, but we'll get there.

  Remember "Hum honge Kaamyaab"? Bet you forgot.

Re:Scaremongering

[Anonymous Coward]

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)

Multiple versions of truth

[tobby]

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.

Re:Cultural Problems

[Kream]

What used to be castes are now communities which tend to restrict marriages to between their own members.

Right. And upper castes... oops, "communities" don't have any problem sharing drinking water drawn from a community well [hinduonnet.com] with Dalit or untouchable castes.

The supposed advantages that the upper caste enjoyed are long gone.

Really? What about the fact that according [atimes.com] to one winner of the Sean McBride International Peace Prize, "Most upper-caste people enjoy great advantages primarily as a birthright.

Sociologists have argued that a person born in a highly educated upper-caste family will have a totally different universe of knowledge, social contacts and elite acceptability, and wholly different access to information about the availability of courses, colleges and private tuition, career options and professional advice."

Additionally, the private sector (non-government, privately owned industries) has always been a meritocracy. If you apply for a job, you aren't even asked your caste or religion. So a question of casteism does not arise.

Oooh, what a statement! Let's take one sector, the media: One report [hindu.com] says "In the first-ever statistical analysis of its kind, a survey of the social profile of more than 300 senior journalists in 37 Hindi and English newspapers and television channels in the capital has found that "Hindu upper caste men" -- who form eight per cent of the country's population -- hold 71 per cent of the top jobs in the national media"

Mmm. And what about representation? Take a look at this [hindu.com].

Bullshit!

I have to agree, brother.

Re:Cultural Problems

[wchin]

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.

Misinterpreted article! Its surely not that bad.

[Georgej74]

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:Think about this

[Anonymous Coward]

I too have just recently spent a month in India, Bangalore to be specific. I was there to recruit for my company, a global corporation that shall remain nameless here. I spent the month in a five star hotel, which can easily be considered one of the best in the world. The appearance of a Western capitalistic boom is very much there - until you scratch past the surface of luxury in the hotel and the job hoppers looking for a quick raise after only six months in their current job.

I spent some time in the streets, trying to get a sense of how far this boom is. My drivers gave me the first hint that there is an undercurrent of resentment - the 'middle class' is being priced out of housing, etc. by the 'I/T' crowd. The 'middle class' has not seen an increase in wages, but their costs have gone up. Traffic, power, and water infrastructure have not kept up with the population growth, all driven by the I/T sector, with the I/T crowd being the haves and the rest the have nots. There is also political unrest which surprised me. General comments about how the governement is doing a poor job to fix things like roads, or address things like keeping the non IT population protected were much more common than I thought they would have been.

45 rupies per day can buy a lot, it is true, providing you are not spending them at Western places. Eating at a restaurant that isn't targeted to cater to Western (or far Eastern) tastes is a wonderful culinary experience, and is terrifically low priced. However, people do need to have a place to live, and those costs have risen too fast. Indeed, India needs to see to her overall needs, not just meet the needs of a foreign business set in a few locales.

Re:Scaremongering

[Anonymous Coward]

It's important to understand that we Indians don't survive on BPO alone - we have all kinds of industries here. BPO is being overhyped because it has grown exponentially over the last few years and so have the associated job losses in the western world. Once the western governments start discouraging outsourcing, BPO oppotunities in India will also dry up - and this won't affect most of the 400 million Indians who aren't dependent on it - it's just another industry which happens to be having a good time currently..

Honestly, you can't have 400 million ppl all doing IT-related jobs.. Saying BPO will create social problems is like saying Silicon Valley will cause revolt among the poor of New Orleans. Most Indians are engaged in agriculture, manufacturing and services other than BPO - all these "traditional" sectors are growing, though not as fast as outsourcing, but even the slow growth there is effective in reducing poverty: Even 8% growth in manufacturing helps more people than 50% growth in BPOs.. And the other sectors in India are, indeed, going strong.

Re:Cultural Problems

[Hoi Polloi]

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 competitor fight them as a proxy (with promises of spoils) or the British troops they had there would have enough technical superiority to outgun them (as with the Zulus). Later the British rushed to consolidate their hold with a train network and mapping. Natives put in power were always reminded that they were in charge at the Empire's whim and never had true authority.

It wasn't until the Indians were unified under the leadership of Ghandi (and the draining of the Empire from WWI and II) that they were able to force the British out.

"America was a dirt-poor country with no electricity, no running water and no infrastructure"

England had electricity in the 1700's? That would have been news to them. Most English didn't have running water either (communal wells) and American cities and infrastructure were reasonably developed. I don't know were you came up with "dirt poor".

Re:Cultural Problems

[Anonymous Coward]

Doesn't sound like you looked it up yourself. I hope your life never depends on putting forth a convincing argement.

pride (prd)
n.
A sense of one's own proper dignity or value; self-respect.
Pleasure or satisfaction taken in an achievement, possession, or association: parental pride.
Arrogant or disdainful conduct or treatment; haughtiness.

1 A cause or source of pleasure or satisfaction; the best of a group or class: These soldiers were their country's pride.
2 The most successful or thriving condition; prime: the pride of youth.
3 An excessively high opinion of oneself; conceit.
4 Mettle or spirit in horses.
5 A company of lions. See synonyms at "flock".
6 A flamboyant or impressive group: a pride of acrobats.