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This is India’s Time. Is it ?

I received an article today, “This is India’s Time”, my response to that, Is it ?

India and China are quoted in every article that talks about the global economy and the future of it. Some say, the economic center of gravity is shifting from the U.S. and EU towards Asia, namely India and China. A Goldman Sachs report says India will be the 3rd largest economy by 2040 in PPP terms. Economist expresses surprise at “The power of the emerging world”. What surprises me more, these smart people at the Economist, have no ability to co-relate reality with their predictions, never step out of their five star hotel rooms or Avis rental cars, walk the streets alone, or live as ordinary citizens for a month in the countries they write so much about.

Indians have this habit of taking an exception and making it the rule. The western media takes this rule and generalizes it even more. I asked a close friend, based in the U.S. who visits India every 6 months, of any positive trends he observed in the last 2 years. He was not able to single out any, later added, most things have gone for the worse, truth is “It is”. In the 90’s, change was visible because we came out of a black hole to some light. We had 2 government TV channels and suddenly more than 50+ thanks to cable TV technology. Many state monopolies came under pressure because of liberalization. The 3 fundamentals of any successful company is people, technology and processes. Similarly the 3 fundamentals of any country are its people culture, public infrastructure and judicial system. Lets analyze , western media typically uses markets and markets alone to justify their position about India. We are growing faster than China in terms of mobile phone adoption, India consumes more than 7 million two wheelers annually, which does more harm than good in terms of pollution and many more statistics are available which makes many Indians feel proud and their India is shining. Everyday the shallow media reports the number of jobs, companies are adding in the cities of Bangalore, Gurgaon, etc. The total number of workers in all possible forms of IT-related jobs in India comes to less than a million workers – one-quarter of one percent of the Indian labor force. For all its Nobel Prizes and brilliant scholars and professionals, India is the largest single-country contributor to the pool of illiterate people in the world. Lifting them out of poverty and dead-end menial jobs will remain a Herculean task for decades to come. The nation still boasts the world’s highest illiteracy rate, while poverty reduction continues to slow.

Sorry: India is not a superpower, and in fact, that is probably the wrong ambition for it, anyway. Why? Let me answer in the form of some statistics.

(via Sources: UNDP, Unicef, World Food Program; Edward Luce)
* 47 percent of Indian children under the age of five are either malnourished or stunted.
* The adult literacy rate is 61 percent (behind Rwanda and barely ahead of Sudan). Even this is probably overstated, as people are deemed literate who can do little more than sign their name.
* Only 10 percent of the entire Indian labor force works in the formal economy; of these fewer than half are in the private sector.
* The enrollment of six-to-15-year-olds in school has actually declined in the last year. About 40 million children who are supposed to be in school are not.
* About a fifth of the population is chronically hungry; about half of the world’s hungry live in India.
* More than a quarter of the India population lives on less than a dollar a day.
* India has more people with HIV than any other country.

I will address India’s people culture, public infrastructure and judicial system shortly.

4 thoughts on “This is India’s Time. Is it ?”

  1. yes- shrikant

    it is true, that there are so many grey areas – about india, that is not being addressed. Arm chair analysis, will not help the reality. Perhaps, more down to earth criticism is required, at this stage, when one knows that
    reality, still bites.

    regards

    g. krishna murthy

  2. Shrikant, when you “address” India’s public infrastructure, I hope this covers the public sector departments such as those responsible for VAT and corporate taxes. As someone who has recently set up a business pan-India which has had to register for VAT state wise and to deal with illinformed, uneducated and corrupt officials, it amazes me how the country has progressed in spite of the inadequacy of such fundamental regulatory systems.

    While foreign companies appear to be streaming into the country at an increasing pace not wanting to miss out on the India story, it will all end in tears unless the country can bring up the quality of its public sector which will ultimately need to catch up with the private sector developments. It will be vital for the public sector to attract high calibre individuals who are paid well, are capable of supporting business through improving efficiency and eliminating corruption. Until this happens, I fear that India will never fulfil the great promise it has to be an economic leader.

  3. hi sujit

    great to see you on the blog…. you said it very aptly ” end in tears “. Public infrastructure includes the hard and soft infrastructure. The implementation of the rules and judicial system is very key to move business ahead. If you think running a business is hard try starting one. In one of my portfolio companies, we have no protection against a bounced cheque. It takes two years to get a arrest warrant. I know an Indian businessmen who tried the same in Dubai, was put behind bars in days. He was asked only 2 questions do you owe this person money ? and did you write this cheque ?

    Just like your VAT example, it is possible to get a passport from every state, what criminal/ tax defaulter uses to leave the country and hide. That is because the passport databases of each state are independent and not linked.

    shrikant

  4. Nice blog. I am sick of all the analysis. Right now, all i would like to do, is to do something.

    Do you have any suggestions to alleviate poverty – real implementable ideas?

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