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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 guess we'll just have to outsource some more jobs.
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.
Happiness does not come from having much, but from being attached to little.
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.)
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.
http://www.cia.gov/cia/publications/factbook/geos
USA
Exports:
$927.5 billion f.o.b. (2005 est.)
Imports:
$1.727 trillion f.o.b. (2005 est.)
From:
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.
In Soviet Washington the swamp drains you.
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.
You can't take hundreds of millions of people from a state of impoverishment to the land of overflowing McDonalds (and bellies) overnight.
The more you know, the less you understand.
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.
yAthum UrE yAvarum kELir All the places are our place, everybody is our kin. (A Tamil Poet - 2000 years ago)
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.
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.
emt 377 emt 4
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?
"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.
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?!?
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.
All bow to his Noodliness!! His Noodle Appendage has touched me!
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.
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
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...
There is no patch for stupidity
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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.
Should invading one's peaceful neighbours be opposed, or rewarded with trade deals?
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