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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."
I suppose BPO is probably more likely Business Process Outsourcing.
(Thanks, wikipedia. No thanks, editors: the term isn't even used in the linked article.)
That's why if you continue reading, they spell out exactly how someone living on $1 a day in India lives:
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.
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.
-Shaunak
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?
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.
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.
http://www.hindu.com/2006/07/04/stories/2006070407 171000.htm
Now you know the H1 program is really screwed-up.
All bow to his Noodliness!! His Noodle Appendage has touched me!
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)
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.
karma
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.