This is an excellent article written about 3 years ago by Gurdip Singh. It still is relevant hence being posted by request.
India is a tale of two cities. Extreme affluence co-exists with appalling poverty. There is arrival of consumerist culture in most cities, the biggest participants being the middle and upper middle classes. They regale in the consumer boom unleashed by the dismantling of the protectionist regime and license raj.
The sleek cars, the burst in housing activity in he urban areas, the growing number of Indians heading beyond the shores shopping for everything from careers to investment to vacations, the mobile revolution, the latest in fashion, the crowded restaurants, the newly emerging malls, the nightlife and what have you are all pointers to the growing prosperity of the upwardly-mobile middle classes.
The Indian sun shines but for a few. Villagers, who still form a bulk of the population, rarely benefit from any government scheme in any significant way. The inequities prevalent in Indian society remain. Not many foreign visitors are aware of them nor do they want to be. More than 400 million countrymen are underemployed, under-productive, underfed, under-educated, under-clad and under-sheltered.
Poverty is indeed confronting.
The contrast is mirrored in the cities. Consider Delhi.
There is the old inner city, crowded and overpopulated, with its left—over memories of the glories of the Mughal era and the horrors of multiple invasions. Then there is the government Delhi-- the capital of India — and the Delhi of the planners and the Delhi of the rich.
Also, overwhelmingly, there is the Delhi of the refugees and migrants who have flooded into the city from surrounding rural areas of Haryana, Rajasthan, Uttar Pradesh and Punjab as well as Bihar.
Also embedded and swallowed up within all this development are the remnants of the dynasties of the Turk, the Sayyad, the Lodi, the Afghan and the Mughal., and of the British Raj. From time to time, shrill, cries are heard of overcrowding, of spreading slums and the deterioration of urban services— all perfectly true from the point of view of the rich and the tourists.
Disregarding the profits made from the migrants and their contribution to the growth of the city, there is often an outcry against the proximity of their shacks and shanties, which can be seen from and leaning against the gardens walls of prosperous houses.
In South Delhi, a billboard exhorts consumers to take loans for cars, houses and washing machines. Nearby, workers on a construction site cannot get a loan for so basic a thing as pump set or a roof. Those who need money do not get it.
Private transport is beyond the dreams of most Indians but the streets of Delhi are clogged with foreign-designed cars and scooters which can compete in the international market. For the less affluent there are only decrepit, outdated and fuel inefficient buses.
Most of the cities, however, have to pay a price in terms of rising pollution levels.
New flyovers which have come up all over the capital impressed the Delhi voters who brought Shiela Dikshit back to power in the recent state assembly elections. Not too much in the distant past, then Prime Minister Indira Gandhi faced the wrath of the Opposition and the intellectuals for making Delhi a city of flyovers to facilitate the Asian games. She was accused of wasting the country’s scarce resources to appease the rich.
Examples abound of the gap in the lifestyles of the rich and the poor. The new found prosperity has also brought with it new attitudes and concerns.
There is a sophisticated Indian elite and a sizeable well-educated middle class: thoroughly professional lawyers, bankers, accountants, academics, engineers, doctors, all admired by their peers in other parts of the world. Civil society is vibrant. India has become the NGO capital of the world. Television has grown from a drab purveyor of government propaganda to a multi-channel independent media. The press once obsessed with politics, now provides news and a bewildering variety of .views on every aspect of Indian life, including the misdeeds of those who wield power.
What is also being witnessed in the cities is the westernisation of the youth, who follow the western ethos, ethics and etiquettes and consumerist values, and often face alienation.
These are the ‘children of liberalisation’.
Fashions too are a changing. There is the fading of the romance of the saree with women preferring jeans, unmindful of whether they fit their figures. The traditional and ethnic prints are giving way to modern geometric designs. Men today are far more fashion conscious than perhaps ever before.
There is worry over the widening social disparities. India, as Jawaharlat Nehru wrote 60 years ago, is “a bundle of contradictions held together by strong and invisible threads”.
Modernisation and globalisation, far from imposing as some have feared, a bland sameness on India, are sharpening some of those contradictions.
Tradition and modernity co-exist. So do the good, the bad and the ugly. Change is uneven. But it is often change with continuity.
With one foot grounded in time-honoured traditions and the other fervently striding into the entrepreneurial e-age, India embraces diversity as passionately as few other countries on planet earth do.
Indian bureaucracy would test the patience of a saint. Journey on pot-holed roads can zap one’s energy in a flash and the most experienced travellers find their tempers frayed at some point.
Boasting a population of one billion people and growing-- India is as vast as it is crowded and as sublime as it is squalid. The plains are as flat and featureless as the Himalayas are towering and spectacular, the religious texts as perplexing as the message is simple, and the people as easygoing as they are tenacious.
Perhaps one thing that encapsulates India is that it is a place to expect the unexpected. That is why perhaps living in the subcontinent is often so frustratingly draining, yet so inimitably inspirational. Love it or hate it, India jostles ones entire being.
India, it is often said, is not a country but a continent. From North to South and East to
West, the people are diverse, the languages varied, the customs distinctive, and the landscape is manifold.
Many have spoken and written about the overwhelming beauty of the country, its melancholy and the sheer richness and range of its culture.
There is always some celebration, catastrophe, public achievement or humiliation, every imaginable product from the brushstrokes of life, from a teeming, boisterous humanity that makes India what it is and Indians who and what they are.
There is much that is unknown, disregarded and unrecorded. This involves people, places, faith, achievement and the unusual. It reflects a triumph against terrible adversity, or something strange and captivating, or bizarre, ingenious as well as ingenuous.
And as the Indian culture and economy evolved they inspired a glorious profusion of comment, observations and misapprehensions, encompassing the sublime and the ridiculous in almost equal measure.
As experience shows India cannot be suppressed for long— it is far too diffused to respond to singular treatment or simple solutions. This is notwithstanding the aping of
Western values and lifestyles in the cities.
Only a year ago, India seemed in a sorry state. Tensions with Pakistan, Gujarat riots regarded as a terrible blot on Indian history and the economy after years of drought limping at an annual growth rate of just four per cent.
A year later, it suddenly seems to have become a darling of the West. Its image is bolstered by this year’s expected growth rate of eight per cent or more, blessed by a lavish monsoon. Hotels are full of foreigners newly alive to India’s potential as both a market and an ‘outsourcing destination’. The risk of war with Pakistan now seems remote with a historic settlement in the realm of possibility. Elections to state assemblies have brought to light voters’ maturity and their wrath at poor governance, bad roads, unclean drinking water and poor power supplies. Indian politicians, businessmen, diplomats and policy-makers are speaking about the new sense of self-confidence. Indian development, to borrow a phrase from W W Rostow, has finally taken off. Many say this is India’s decade.
For the IMF and others, India is a case study proving that economic reforms work. They argue that reform has brought faster growth, breaking the shackles of the Hindu growth rate of the1980s: Rapid growth is particularly prevalent in those parts of the country and of the economy that have opened up most to competition, and have been the least chains of the government. The most obvious example is the IT industry.
In fact, so impressed is the World Bank with the success of the reforms that it has announced doubling of its assistance to India from the last year’s level of 1.5 billion to three billion dollars in 2005.
Indeed, India’s mood swings about their economic prospects have cyclicality about them.
How much of the present upbeat mood in urban areas is a result of the government’s propaganda campaign ‘India Shinning’ is difficult to say.
But at a time when General elections, the biggest carnival of all, is underway and everyday new claims and counter-claims are made by the ruling and opposition parties, it is time to have a more dispassionate look at the affairs of the country. The end of the century and the dawn of the new millennium from which to look ahead also provide an opportunity to consider where the country would be going from here. The post-election period will set in train developments that will profoundly affect the environment in which the country’s destiny will be played out.
Capitalising on the prevailing exuberance, Prime Minister Atal Bihari Vajpayee has advanced the General elections due in October to April- May this year. His Finance Minister Jaswant Singh has sprinkled tax cuts and spending promises as if from a bottomless pit.
The Finance Minister’s optimism finds echo among much of the elite.
India it appears was never in such a mess a year ago as the pessimists feared. For a decade, the economy has seen average real growth rate of six per cent per annum. Data now reveals that Indian economy is now markedly on a steeper growth path of eight per cent plus, and will be able to retain this growth.
Other indicators are glowing with health. Amid much rejoicing, the foreign exchange reserves crossed the 100 billion mark, the stock market recorded its biggest annual rise in 12 years, inflation and interest rates are low and current account is in balance.
Externally, the global economy is on an upswing. China next door was booming and for once this was seen as an opportunity rather than a threat and the globalisation of services in international business played to India’s advantage.
Much attention has been given to a recent forecast published by Goldman Sachs, an
American investment bank, for Brazil, Russia, China and India, the four large developing economies, It predicted that over the next half a century, growth wilt slow sharply in the world’s six big rich countries and in Brazil, Russia and China. But India will continue to average an annual growth of more than five per cent. By 2032, its GDP will be bigger than Japan’s, and by 2050, its per capita income per head in dollar terms will have multiplied manifold.
Certainly, the tong-term growth trend is improving. The past three decades have seen a steady acceleration. Average annual GDP growth per head climbed from 1.2 per cent in the 1970s to three per cent in the 1980s and 3.9 per cent in the 1990s.
From 1972 to 1982, GDP growth averaged 3.5 per cent, which late Prof Raj Krishna termed the Hindu rate of growth. From 1982 to 1992, GDP growth averaged 3.5 per cent per annum. From 1982 to 1992 , GOP growth climbed to an average of 52 per cent per annum.
In the Tenth five year plan, which began in April 2002, the average annual growth rate is targeted at eight per cent.
But the most fundamental long-term reason for hope is demographic. More than half of all Indians are under 25 years of age. It is this sort of bulge in the numbers of people in productive age groups that produced explosive growth in China and South- East Asia.
The reason India is expected to outperform Brazil, Russia and China as well as the rich world in the Goldman Sachs forecast is that it is the only country where the population will grow for the next 50 years and where the proportion of working -age group people will increase well into the 2020s.
In the 21st century, when every sixth human being will be Indian, the world will have to interact with Indians in many more ways than before.
Today as never before, those betting on India are betting on its prosperity.
Though admittedly monsoon had a big role to play in this year’s robust growth numbers, Mr Vijay Kelkar, Adviser to the Finance Minister, attributes the growth momentum to the reform measures undertaken during the past years. The growth rate of eight per cent and more is thus likely be sustained in the coming years as well, he says.
Success has not come easy, Kelkar says. India Inc has undergone five years of restructuring, the government has re-engineeredthe financial sector and slashed interest rates and pushed down the cost of money by 500 basis points in the past few years, enabling industries to restructure and consumers to buy more. The government, has also pushed spending on contra cyclical measures— roads and other infrastructure to name but a few. This, according to the Finance Ministry mandarin, propped capacity utilization and enhanced demand, besides creating employment.
Consolidation is underway in several industries such as cement. The Finance Ministry bifurcated the beleaguered UTI, restructured financial institutions and offered a package to the textiles and steel sectors. Low interest rates have encouraged the purchases of houses, cars and consumer durables.
“India is entering the upswing of a business cycle, implying an expected growth rate of seven per cent or higher during the next five years,” says ADB’s India Chief Economist Sudipto Mundle.
The Spurt in the growth rate is led by the services sector, which accounts for more than 50 per cent of the GDP. The fastest growing components of this sector are trade, tourism, transport, communications, and financial and business services.
And so the familiar story goes on. There are myriad debates about agriculture, savings rate, taxation, fiscal deficit, foreign investment and the like. All these are issues which have been well commented upon.
The growth performance has resulted in a sea change in the image the world has of India.
The world’s most powerful economies want India to do well and are egging the government to finish the reform agenda. In a prosperous, democratic, secular, liberal and stable India they see an ally as its fast growing economy offers a market for a billion people. India’s justified pride in its democratic credentials is an essential part of its international image.
India’s high tech stars have become world beaters and they are poised to consolidate that position in the next five years. Analysts say that if India plays its cards well, it can become the number one knowledge production centre by 2025.
Cover stories on foreign magazines are pointing to India’s arrival on the global mart. Backed by its mind power, 500,000 engineers, 250,000 doctors and 7.5 million graduates—India is seen as having become the coding capital of the world, the back office to global corporations, the centre of cutting edge research, the global original equipment manufacturer of auto ancillaries and the preferred supplier of erection construction skills.
The change has much to do with the software and the growing clout of Indians in America. The country’s brainpower is shaping Corporate America with its engineers and medical graduates getting enmeshed in America’s new economy. There is also talk of the lead in colonizing cyberspace.
It is for this reason that India is at the centre of a brewing storm in America, where politicians are starting to view offshore outsourcing as the root of jobless recovery in tech and services.
The economic rise of India has given it a new cachet on the global market for power and influence. India is reworking its equation with the world. There is a lot of expectation building around India in the world today.
Sometimes back, External Affairs Minister Yashwant Sinha called Ambassadors of 15 countries and told that India will not be taking their aid any more, giving a chance to less developed countries who are more in need.
An event last year, which will have a distinct imprint on the future, is the emergence of India as a leader of the developing world in the World Trade Organisation. India led the boxing match at Cancun. From now on India is likely to be seen differently by developed countries in all matters relating to international trade negotiations, not only because of its acceptance as an economy of consequence but also because it wields significant influence in multilateral trade talks.
There is a familiar saying that all that glitters is not gold. There is another one in Hindi which says ‘Uper Sherwani ander paraishani’, which means that while one is dressed well, all is not well underneath it. So is the case with India.
The unchanging India is shackled by a colonial bureaucracy, the India which has become a byword for red-tape and corruption.
And by now there is enough evidence to prove that bad governance is slowing down the country which has enormous unrealized potentiaL
Corruption and chroniç inefficiency are the byproducts of the politician- bureaucracy nexus.
Oppression is another result of this unholy alliance. As the bureaucracy and, politicians are hand in glove, there is no restraint on the government misusing the state machinery. Caste and communalism as also religion- based politics often crowd out the issue of good governance.
It is still a country with child labourers making products such as carpets and matches. Basic human development indicators still mock us. Indian society is still divided on caste and religious issues, even though’ these may be melting in urban areas. Reforms may have worsened regional disparities with investment flowing into areas which are already industrialised and better governed.
Education, health and infrastructure are the areas where India has been least successful
State-government finances badly need rehabilitation if the rural majority is to get much-needed investment; in roads, as many villages remain cut off; in irrigation, to free more farmers from dependence on monsoon; in education, where nearly 20 per cent of children receive no education at all and 35 per cent of the population are illiterate; in health, where 70 out of every 1,000 die in their first year, and at least 4.6 million are infected with HIV, which in some areas has spread from high-risk groups into the wider population.
A phenomenon peculiar to India is the large size of its black economy. The government has no estimates of its own. The last study conducted by the National Institute of Public
Finance and Policy (NIPFP) placed the figure at around 40 per cent o’ the National Income.
Private estimates vary with some its experts believing that black incomes are less now because of reduction in marginal rates of taxation. Businessmen often speak of deals where the ratio is 50;50. Whatever the size of black economy, it has led to social and economic inequalities. The lavish parties, spending on marriage functions, the mansions and the farm houses, and the phenomenal sale of gold and jewellery are a few examples of conspicuous consumption and indicative of how surpluses are used vulgarly in a poor country.
These are the manifestations of the black money phenomenon, often regarded as the single biggest cause of failure of economic policy fails. “The state is soft on the rich, but hard on the poor,” says Professor Arun Kumar, Professor of Economic Policy at the Jawaharlal Nehru University and member of the NIPFP report.
In India, growth has been largely jobless. In China, economic reforms and growth led to millions of people leaving the land to work in factories.
Indian Industry has become more productive and competitive, but without taking on huge numbers of people. Most Indians still work on the land or the ‘unorganised sector’. A Planning Commission report points out that 90 per cent of the jobs are being created by the unorganized sector, where there have been no reform efforts worth the name. One of the fastest growing occupations is that of securities guards which offers no prospects of income mobility over a life time.
The Special Group of the Planning Commission found that 92 per cent of the employed, who are in the unorganised sector, contribute to 60 per cent of the GDP whereas the organised sector, where eight per cent of the population is employed, contributes to 40 per cent of output.
To make matters worse the employment elasticity of the large corporate sector has declined from 0.5 per cent in the 1980s to 0.066 per cent in 1999-200. This figure has been rapidly declining since then.
Although the employment elasticity of the small enterprises shows a secular decline over the years, it is much higher at 0.30 per cent.
Moreover, under the present restructuring and privatization process of many key sectors, a heavy labour shedding is expected over the medium term both in the public and the private sector.
This has to be seen in the context of growth of the young population (15-39 years) which is likely to touch 2.44 per cent, in spite of the fact that the aggregate population is expected to come down to 1.6 to 1.7 per cent over the Tenth Plan period (2002-07).
The backlog of unemployed at present is more than 30 million. Given the employment growth of around one per cent per annum as against the expected growth in labour force of two per cent, the scenario which emerges is alarming with the number of unemployed touching 50 million by the end of the Tenth Plan.
The unemployment level in 2002-03 was eight per cent of the labour force. Regional disparities are also coming into focus. There are certain regions where educated unemployment is as high as 30 per cent. These are also the regions where social unrest and insurgencies are high.
Unemployment is turning out to be global phenomena as extensive restructuring is taking place goaded by technology changes which are highly capital and skill intensive. This has resulted in weeding out of labour in view of cost reduction and even closing down of many units having become unviable in the process of globalisation. Apart from developing countries, the phenomenon is being witnessed in Europe, the United States and China.
In a fundamental sense, poverty and employment are linked. As employment is the soundest way of pulling money into the hands of the poor, a worsening of employment can only worsen poverty.
The crocodile tears that have been shed over India’s poor would flood the Ganges.
Regrettably, the debate on poverty appears to have run on ideological lines. The proponents of liberalization and reforms argue that poverty has come down in the last decade, the skeptics hold the opposite view.
Worse still, most of the debate has centered around the numbers and not on how to solve the problem. Swami Vivekananda once spoke of the propensity of the Indian elite to discuss for hours whether a glass of water ought to be taken with the left hand or the right hand. It is time for the focus to shift to people and their problems.
A related question is that of hunger, which appears intolerable in the modern world in view of the enormous expansion of productive power that has taken place over the past few centuries.
The persistence of chronic hunger and virulent famines must be seen morally outrageous and politically unacceptable.
The experience of “un-aimed opulence” of which Brazil provides a good illustration, show that growth as such is not a dependable strategy for enhancing elementary well-being and capability.
Two of the world’s finest development economists, Amartya Sen and John Dreze, have argued that if growth is to serve as a solid basis for promoting living conditions, it must take a participatory form (e.g. with widespread creation of remunerative employment), and a substantial part of the resources made available for economic growth have to be devoted to expansion of public provisioning.
A question that would occur to many is this. Is it not a hopeless time to write in defence of public action? The world has in recent years moved decisively towards unhesitating admiration of private enterprise and towards enlarging and advocating reliance on market mechanism.
For public action to be successful, it should not only involve the activities of the state, but also the opposition parties, workers organisations and the public at large.
The contrast that is India has led to the search for alternatives. There are various shades of this. Basic to this is the belief that the elite has little inkling of the true social costs ‘of the Western success story that it now feels constrained to emulate; it knows little of crime, violence, cynicism, social dislocation and breakdown of family values which afflict the West.
The West appears to a majority in India as the source of all hope, a place of luxury, affluence and ease. This one dimensional exchange reinforces the most simplification and damaging falsification of the real relationship between the North and’ the South. What is suppressed in this traffic is the endurance, courage, heroism of millions of people in India in their daily survival and the uncelebrated struggles against injustice and insufficiency, the sacrifice and altruism of popular movements. The Western reform packages are seen to demand their pound of human flesh from the poorest and the most vulnerable on earth.
The Indian alternative of decentralised, small- scale and local development, and of Gandhian values is held as an example to a world threatened by over-development, intensifying industrialization, and social and ecological disintegration. It draws upon profound cultural reservoirs of traditional wisdom, experiential knowledge, and ability to survive multiple colonialisms and invasions.
The choices that people make today will crucially impinge upon the future. India has shown that democracy is not enough, nor incidentally, is economic growth. Development is more than mere economics.
New Delhi, Jul 19 (UNI) It was mass mobilisation of employees as they got together to mark the 39th Anniversary of Bank Nationalisation, giving a clarion call to the government to desist from mindless privatisation of financial institutions, curbing the social mandate of the Public Sector Banks and prevent unhampered entry of foreign banks into the country.
