Income disparity in India has little to do with inter-state or rural-urban differences or, for that matter, trade or other international factors. In India the drivers of inequality are education, work experience, family background, and, crucially, caste and ethnic differences, writes Vivek Dehejia in NYT Blogs.
Has freer trade decreased or increased poverty and inequality in India? The debate has persisted, almost from the very beginning of India’s embrace of the global economy in 1991.
Curiously, also exactly 20 years ago, Americans were engaged in a similar battle of ideas. Mapping its intellectual contours helps give us a fix on the current Indian situation.
Recall that then, just as may be unfolding now, the United States was gearing up for a presidential election which ultimately unseated an incumbent who had been hugely popular just a few years before.
At that time, the heated national debate was over the merits of freer international trade, and specifically whether it could be blamed for thestagnating wages of American workers. Voters wondered whether the proposed North American Free Trade Agreement (NAFTA), embraced by President George H.W. Bush, but initially shunned by then Gov. Bill Clinton, would hurt their job prospects. more
Eric Bellman in The Wall Street Journal:
While I have noticed my relative net worth stagnate as some Gekko worshipers have bought rare paintings, airplanes and villas in Phuket, it wasn’t until I moved to India that I really became a fan of the avaricious character portrayed by Michael Douglas.
In discussions, interviews and debates with friends about India’s economy, I often have to stop myself from paraphrasing Mr. Gekko and saying “greed is good.”
I don’t think people should break rules and hurt others to get what they want like Mr. Gekko. But the point I am usually trying to make is that a capitalist system that allows people to act in their own self-interest often finds better solutions to problems than depending on some old babus in New Delhi to decide how the economy is run.
India since it started unbinding its economy in 1991 is a better example of the power of profits than anything in the movie “Wall Street.” China started tapping the power of “greed” more than a decade earlier.
It is profit-seeking companies, not the government, that have brought cell phones to more than 500 million Indians. Ratan Tata has launched the world’s least expensive car, the Nano, because he thinks he can make money out of it. Millions of people in the middle class can afford mortgages now because banks can raise and distribute money as they please. More:
Akash Kapur in the New York Times:
Pondicherry: A dark wind blew into this sleepy, coastal town recently — it carried the threat of global terrorism, of bombs and gunmen and unprovoked attacks on soft targets.
On Feb. 13, people thought to be Islamic terrorists bombed a restaurant in the northern city of Pune, killing 17 people. Speculation followed that the location had been chosen for its popularity with Western tourists. The government warned that terrorists appeared to be targeting foreigners in India, and soon a specific advisory was issued for this former French colonial outpost, a popular tourist destination usually associated with yoga, spirituality and the quest for inner peace.
A team of commandos in combat gear was seen driving around town in a jeep, automatic rifles at the ready.
At the French Consulate, on the beach road, where middle-aged pensioners take their evening walks, security forces set up roadblocks and sandbags.
The police and extra security were evident at hotels and tourist attractions. In a depressingly familiar — yet in these parts, utterly new — routine, visitors were frisked, and bags were examined. More:
Against all hope, secularism remains a myth. Meera Nanda in Himal Southasian. Meera Nanda’s most recent book is “The God Market: How globalization is making India more Hindu (2010)”.
Asha Dangol / Himal Southasian
The defeat of the Bharatiya Janata Party (BJP) in India’s general elections last year was greeted with relief by secularists and democrats everywhere. Not entirely unreasonably: they read the fact that the BJP lost a solid 3.4 percent of its previous poll share as evidence that Indian voters had rejected the majoritarian politics of Hindu pride and prejudice, peddled by the BJP and the rest of the Sangh Parivar. The general consensus is that the ideology of Hindu nationalism, or Hindutva, has lost its appeal among the urban youth and middle classes – that secularism has won and “God has left politics,” to borrow the elegant title of a recent essay by Delhi journalist Hartosh Singh Bal. Market reforms and globalisation emerge as the stars of this saga. Both the friends and critics of the BJP agree that it is the fervour for making money in India’s roaring economy that doused the flames of Hindu nationalism from the hearts of the middle classes. But that is not all. The ‘free’ market, we are told by a section of influential Dalit intellectuals, will not only free India from the menace of communal violence, but will also lift the curse of caste oppression. It is fair to say that the gospel of globalisation is gaining ground in India.
The story about how the markets defeated the BJP goes as follows. Hindutva appealed to the middle classes and youth back in the bad-old-days of the 1980s and 1990s, when these groups were feeling beleaguered and angry due to the failures of Nehruvian socialism and ‘pseudo-secularism’, which, in their view, gave undue preference to Muslim and Christian minorities. But in the nearly two decades of economic liberalisation and foreign investments that began in the early 1990s, India has witnessed a great burst of economic growth. As a result, the Hindu middle classes are angry no more. Far from feeling beleaguered and discriminated against, they have become more cosmopolitan, more self-confident, and more willing to take on global challenges and seek out global opportunities. Indeed, so confident is the Great Indian Middle Class that it has claimed the 21st century as India’s Century. And so the critics ask: What use can such forward-looking people possibly have for the past glories of Hinduism, about which the stodgy old men in khaki shorts keep harping? This story has found great favour among the self-proclaimed Friends of the BJP, who want the party to drop Hindutva altogether, or at least to make it sound less communal, and emerge as a ‘normal’ pro-market, pro-defence, anti-‘minority-appeasement’, right-of-centre party. More:
India’s economic reforms have freed it from an era of punitive taxation and stifling regulation. The challenge now is to establish an inclusive social contract that cuts across divisions. Sunil Khilnani in Mint-Lounge:
A peculiar outcome of what many have called the “crisis of capitalism” over the past two years is that it has left capitalism remarkably unscathed. Indeed if anything, the recent shocks to this, our least-bad economic system, have worked to reinforce many of its less good aspects.
Here in India, much has been made of the fact that the economy has gracefully survived the recession. Both the Indian government and our corporate managements responded nimbly, and the companies are now well placed to take advantage of new opportunities. That is all to the good.
Yet the language of crisis can also be a means of manipulation. Over the last two years, it’s been used to eliminate competition and consolidate sectors of the economy in the form of a few, massive players. After the global shake-out among investment banks, airlines and the automobile industry, the surviving players are not just big. They’re secure in the knowledge that they’re far too big to fail. Meanwhile they’ve parlayed the uncertainty about the financial climate into a trumping argument against worker concerns. They’ve pared costs, shed labour, reduced employment security. And now the citizen as consumer has less choice, the citizen as worker has more uncertainty, and a paradox has been laid bare. More:
India’s latest statehood movement reveals a crisis at the heart of the country’s globalising ambitions. Siddhartha Deb on the fight for Telangana. From The National:
One Sunday afternoon in the summer of 2008, I found myself standing in a concrete building set amid a patchwork of agricultural fields on the outskirts of Armoor, a town in the southern Indian state of Andhra Pradesh. The building had a grand title, Garden City Function Hall, but apart from its bleak rural surroundings – the vegetation blasted dull yellow by months without rain – there was little to distinguish it from countless such structures in India that are regularly rented out for weddings and celebrations. As waiters dressed in jeans, vests and shoes without socks circulated with glasses of water, a man with long hair and a thick moustache began singing, his right hand sometimes pressed to his heart and sometimes swept out in the hope of stirring people from their midday torpor. A chorus line of young boys, bare-chested and in white dhotis, danced behind the singer, occasionally breaking out in a sheepish refrain of “Jai Telangana!” – “Victory to Telangana”.
The singers were demanding the formation of a new state called Telangana, an area of some 155,400 square km to be carved out of Andhra Pradesh, India’s fifth-largest state. The hundred-odd people at the gathering, from farmers with calloused hands to lawyers with video cameras, were there to support this demand, as was R Limbadri, a professor at Osmania University in Hyderabad, who had grown up in a nearby village and had brought me to the event. Limbadri was a Dalit, a member of the lowest Hindu caste, and he was far less dramatic than the singer when he addressed the crowd. He supported statehood, he said, but only if Telangana was formed as a different kind of state, one truly committed to ending the incredible economic disparity that has troubled Andhra Pradesh in recent years. More:
There’s proof Indians are becoming more religious. Yet the days of politics based on religion seem to be over. What happened? Hartosh Singh Bal in Open:
Religiosity is on the ascendant in this country as never before. In the last five years, daily attendance at Hindu shrines has risen dramatically. At Tirupati, it has gone up from 20,000 to 35,000. At Vaishno Devi, annual attendance has gone up from 5 million in 2004 to 7.7 million in the first 11 months of this year. But the Bharatiya Janata Party (BJP), stuck in New Delhi debating the Liberhan report in the backdrop of what could have been, has found its vote share in consistent decline over the past decade. In the Indian general election held earlier this year, it dipped to its lowest level since the party shot to prominence in 1991. If today the party is in shambles, offering little hope even to its most committed supporters, it is because it has failed to ‘harvest the souls’ that according to conventional wisdom should have been the saffron party’s for the taking.
This paradox, India’s increasing religiosity and a right wing in terminal decline, is uniquely ours. Across the world, the growth of middle-class religiosity fuelled by consumerism has strengthened right wing movements. Countries such as Turkey, which have seen a boom in the economy, have responded by voting in right wing governments to power, and in the US, the growth of evangelism has benefitted the Republicans. More:
S. Mitra Kalita in the Wall Street Journal:
Ten years later, the world is in panic mode again—and some economists think India will come to the rescue yet again. This time, it’s from the evolution of that nascent outsourcing model into the engine of a robust global player that can do more than serve U.S. companies; Indians can buy their products, too. Indeed, ask an economist who will replace the U.S. consumer and the answer increasingly seems to be … the Asian consumer.
The bookends of this decade are significant for India and its place in the new economic order. The backlash against outsourcing remains a very real threat, intensifying amid 10% unemployment in the U.S. But outsourcing—and the idea that companies must operate cheaply, efficiently, globally—has come to be an accepted, inescapable reality. More:
Aditya Dev Sood at 3quarksdaily:
We began by buying soap made at an ashram in Gangotri, the Himalayan mouth of the river Ganga at the Dastkar handicraft mela. We traipsed through the sarees displayed at the Chinmaya Mission mela, and enjoyed the root-beer at the American Women’s Association mela, and bratwurst with beer at the German Mela. This morning we’re back from the Delhi Commonwealth Wives Association mela, where we bought woolen slippers and hats at a stall run by the wives of diplomats from Kyrgyztan.
Diverting as these outings are, they’re just sideshows to the real mela event of the season, the India International Trade Fair. The IITF, as it is universally referred to, is promoted by a government body and held in a specially-constructed fair grounds called Pragati Maidan, literally ‘Progress Pavillion.’ More:
From Financial Times:
Want a new refrigerator, washing machine or oven? A new car or perhaps an iPhone?
India’s middle-classes have been lapping up such pricey goods for some time due to deals that allow them to pay in monthly instalments.
Now, Levi Strauss & Co has decided to offer the same deal to people wanting to buy a pair of its famous blue jeans.
“Levi’s is an extremely aspirational life-style brand in India,” said Shumone Chatterjee, managing director of Levi Strauss India.
“A large portion of our consumers would love to access Levi’s more frequently than they currently do.” More:
Tunku Varadarajan in Outlook:
A curious thing has happened to expatriate Indians in the last decade, and particularly in the last five years: they have become emancipated, unshackled from the India of old, which had been the source of so much angst for them in the lands of their adoption.
India was a benighted place, impoverished, quasi-socialist, corrupt and sanctimonious, the sort of place where the pursuit of happiness-to use a quaint American phrase-was manifestly impossible. These were precisely the qualities that had caused Indians to leave India in droves, and, in many cases, Indians abroad came to have a vested interest in this narrative of desi decrepitude: after all, India’s seemingly incorrigible state allowed the emigrant to live abroad with a clearer, lighter conscience. You tell me, what could I do for India, in India? It was more rational, surely, to bugger off, better oneself abroad, and do what little one could for the folks left behind. V.S. Naipaul wrote in the 1990s of a new India of “a million mutinies”; but it was the Indian emigrants who were mutinous, the original mutineers-and there have been millions of them. More:
Akash Kapur, a child of rural India, recalls a different rhythm of life. From the New York Times:
Kuilapalayam: The other day I went for a drive on my motorcycle and realized that my world had changed completely.
I drove along a concrete road that was once a dirt path. The road leads to the ocean. I used to be able to see the ocean from the top of the road. Now the view has been usurped by apartment buildings and guesthouses and shops.
When I was a boy, the road was bordered by emerald-green rice fields. There’s not a rice field in sight anymore, only the neon greens – and pinks and purples and oranges – of the concrete blocks that have taken their place.
The area around where I live was once an isolated rural hamlet. It was a hundred miles, along a potholed road, from the nearest big city, Chennai, or Madras, as it was called then. I grew up here, in the country, surrounded by five villages. I had an idyllic childhood. My life ran to the rhythms of an agrarian world: bullock carts and hand plows, bicycles, windmills.
But for the men and women who lived in the villages, who eked out a living from the eroded land, life was much harder. Their existences were circumscribed by poverty. In many respects, their conditions were little improved from those of their grandparents. More:
S. Mitra Kalita in the Wall Street Journal:
Last year, as a New Delhi mom desperate to get my daughter into an elite private school, I chose my interview outfits carefully: Boots and blazers for the schools known among the business class. Colorful salwar kameezes for the more cultural and political set. Taking no chances, we brought her artwork, copies of my first book, reviews of my husband’s art shows. We were shameless, stopping only short of outright bribery and jockeying connections–both traits as entrenched in Delhi as sequins and seekh kebabs.
Last week, we completed a whirlwind tour of some of New York City’s best public schools. We gave no thought to our appearance before each of the six tours. Who we were didn’t matter at all, and not so much our daughter either. What got us in the door was her performance on a Saturday morning earlier this year, shortly after we returned to the U.S. In what any parent will recognize as a fluke (what if she had been moody, hated the proctor, wanted eggs for breakfast instead of pancakes?), she scored high enough to qualify for a magnet school. More:
Have the benefits of economic growth and prosperity changed the lives of India’s poorest, the Dalits? In The New York Times, Somini Sengupta travels with Dalit crusader Chandra Bhan Prasad who sees wealth and prosperity as cures for the country’s deep-rooted caste bias.
When Chandra Bhan Prasad visits his ancestral village in these feudal badlands of northern India, he dispenses the following advice to his fellow untouchables: Get rid of your cattle, because the care of animals demands children’s labor. Invest in your children’s education instead of in jewelry or land. Cities are good for Dalit outcastes like us, and so is India’s new capitalism.
Mr. Prasad was born into the Pasi community, once considered untouchable on the ancient Hindu caste order. Today, a chain-smoking, irrepressible didact, he is the rare outcaste columnist in the English language press and a professional provocateur. His latest crusade is to argue that India’s economic liberalization is about to do the unthinkable: destroy the caste system. The last 17 years of new capitalism have already allowed his people, or Dalits, as they call themselves, to “escape hunger and humiliation,” he says, if not residual prejudice.
When foreigners complain to her that Indians are liars, Ranjini Manian often tells them what’s actually upsetting them is a simple clash of cultures.
The accusation is common among expatriates stumped by the Indian way of doing business and one that Manian tries to counter with the help of Global Adjustments, one of a few firms offering cross-cultural services in the world’s third biggest economy.
“Foreigners can’t understand why Indians don’t say ‘yes’ and ‘no’ clearly,” Manian, the firm’s CEO, told Reuters.
“We tell them Indians have a hard time using the word ‘no’. There is this tendency to want to save face, (but) a polite ‘I’ll try my best’ is not good enough.”
In The Sunday Times, Michael Sheridan reviews Rivals: How the Power Struggle Between China, India and Japan Will Shape Our Next Decade (Allen Lane, 20 pounds, 328 pp) by Bill Emmott, the former editor of the Economist
Economics may have shaped the Asia of today but politics are forging its tomorrow, says Bill Emmott, the former editor of The Economist, in a striking new book that predicts a dangerous power struggle between China, Japan and India.
Emmott’s book is already selling well in temples of globalisation such as Hong Kong airport, no doubt because it stands out among the heaps of corporate drivel in the duty-free bookshops. A “disruptive transformation” is in progress, says Emmott, who edited The Economist from 1993 to 2006. It generates wealth but could set off conflict, he fears, identifying the tangled boundaries of Tibet as one danger zone.
Can Kolkata rise above its poverty to become the Bengali entrepot for the East asks Robert D. Kaplan in The Atlantic
When judging a new place, a traveler must first always reckon with his or her point of departure. Arriving in Calcutta by bus from Dhaka, the capital of next-door Bangladesh, is like arriving in West Berlin from East Berlin during the Cold War—a trip I made several times. Grayness is left behind. Instead of the rusted signs of Dhaka, giant, swanky billboards advertising global products glow in the night like back-lit computer screens. Traffic is dominated in Dhaka by creaky old bicycle rickshaws; in Calcutta, by late-model cars. There are, too, the sturdy yellow Ambassador taxis, zippy little Indian-produced Marutis loaded with families, and many luxury vehicles.
Yet the rickshaws that you also see in Calcutta provide a signature image of exploitation worse than almost anything you’ll see in Dhaka: one human being is transported by another, who is not merely furiously pedaling uphill, but actually running uphill on his bare feet, pulling the rickshaw like an animal.
Calcutta is, frankly, obscene.
[Pic: Running out of time: New Laws are forcing rickshaws off Kolkata's streets. Atul Loke]
James Surowiecki in the New Yorker
Americans are used to foreign cars—nearly half of us, after all, drive one—but no American has yet seen a vehicle bearing the brand name Tata Motors tooling along the highway. So when, a few weeks ago, news broke that this same Tata Motors, an Indian auto company, was close to buying Jaguar and Land Rover, the first reaction of many was “Who?” The implausibility of the bid was magnified when Tata rolled out its newest product, a tiny, stripped-down car that will sell for a mere twenty-five hundred dollars. The spectacle of a low-end specialist trying to buy a couple of established luxury brands looked to some like a cubic-zirconium peddler making a play for Tiffany.