India After Gandhi (120 page)

In addition to these other factors, a geographical accident has also contributed enormously to the boom – the fact that India is on the other side of the globe from the United States, so that work done in the Indian day is ready by the time the US client gets out of bed.

The facility with English, and the luck to be five or ten hours ahead of the prosperous West, has led to other forms of work being outsourced to India. At the higher end of the value chain, medical tests of patients in US hospitals are sent to be analysed by Indian radiologists and pathologists. At the lower end is the mushrooming call-centre market in which young Indians are employed to stay up all night to take calls from holders of Western credit cards, or to book seats on Western planes and trains. Many of the employees in these centres are women, who can speak grammatical and easily understood English and who work harder than their American counterparts at one-tenth the cost. In 2002 there were more than 300 call centres in India, employing 110,000 people. The industry was growing at a staggering 71 per cent per year. It was estimated that by 2008 it would employ 2 million people, and generate $25 billion dollars annually, amounting to as much as 3 per cent of India’s GDP.
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The outsourcing of Western work to Indian workers is taking ever more varied forms. English teachers in Kerala tutor American kids over the Internet in grammar and composition. Catholic priests in the US and Canada send prayer requests to their Indian counterparts. One can have a thanksgiving prayer said for Rs40 (roughly a dollar) in an Indian church, whereas in an American church it would cost five times that amount.
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If less spectacularly, the reforms of the 1990s have also had an impact on the manufacturing sector. Increased competition and the entry of foreign firms has led to greater productivity and lower prices, benefiting the domestic consumer. Some Indian industries have seized on opportunities offered by the opening of international markets. Thus, top clothing brands such as Gap, Polo and Tommy Hilfiger all increasingly have their products made in India. India now exports some half-million
motor vehicles a year, as well as many sophisticated components used in vehicles assembled elsewhere (one out of every two American trucks uses an axle made by an Indian firm). Another growth area is pharmaceuticals. Medicines exported by Indian companies were valued at $1,000 million in 2003 – these included drugs made according to modern pharmacopoeia as well as those following the indigenous Ayurveda system.
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The opening of the economy also led to many foreign firms coming in to tap the Indian market. Between 1991 and 2000 the government approved more than 10,000 investment proposals by foreign companies; if all had fructified, they would be worth a staggering $20,000 million. They spanned the range from telecommunications to chemicals, and from food processing to paper products. Of the projects that actually got off the ground, the most visible brands were in the consumer sector: cars made by Ford and Honda, TVs by Samsung, phones by Nokia and drinks by Pepsi and Coca-Cola, whose advertisements and showrooms were now a noticeable presence in the major Indian cities. Less visibly, companies such as Philips, Microsoft and General Electric had also begun establishing research stations in India, which employed local as well as expatriate engineers in developing cutting-edge technologies for the global market.
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The importance of foreign trade to the Indian economy steadily grew through the 1990s. Exports increased from 4.9 to 8.5 per cent of GDP, imports from 7.9 to 11.6 per cent. Yet, in the aggregate, this remained a relatively closed economy. In 1980 India accounted for 0.57 per cent of world trade; twenty years later the figure had inched up to 0.71 per cent.
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One less obvious aspect of recent economic history is the change in the social composition of the entrepreneurial class. Once, the major capitalists in India came from the traditional business communities – Marwaris, Jains, Banias, Chettiars, Parsis. However, in the past three decades a range of peasants castes have moved into the industrial sector. Some of the most successful entrepreneurs of late have been Marathas, Vellalas, Reddys, Nadars and Ezhavas -from castes who for centuries have worked the land. Again, some of the best-known software start-ups –
such as Infosys – have been initiated by Brahmins, a caste that traditionally served the state or the academy and regarded commerce with disdain. There have also been some very successful Muslim entrepreneurs, such as Azim Premji of the software giant WIPRO.
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Meanwhile, the surge in economic growth has led to an expansion in the size and influence of the Indian middle class. The emergence of this stratum, writes the political scientist E. Sridharan, ‘has changed India’s class structure from one characterized by a sharp contrast between a small elite and a large impoverished mass, to one with a substantial intermediate class’. How substantial it actually is remains a matter of definition and interpretation. Defined most broadly, to include all households with an annual income in excess of Rs70,000 (at 1998–9 prices), the middle class consists of as many as 250 million Indians. Defined most exclusively, to keep out all those who earn less than Rs140,000 a year, it consists of only 55 million Indians.
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This new middle class is the prime target of the new products and services that have entered the Indian market in recent years. There are now more than 50 million subscribers to cable television in India, and at least 100 million Indians who own mobile phones. The spread of these services grows exponentially, as does the spread of that artefact most typical of the modern consumer economy, the motor vehicle. Bangalore, for example, has as many as 2 million vehicles on its roads, with 20,000 new ones being added every month.

In the early years of Independence an ethic of Gandhian austerity hung heavily over the Indian middle class. In a poor country, one was not supposed to have much wealth, and certainly not supposed to display it. Even those inclined towards hedonism were stalled by the absence of choice. With the opening of the economy in the 1990s, the guilt formerly associated with consumerism has rapidly disappeared. Whether it be cigarettes, cars, whisky or sunglasses, foreign brands previously unavailable in India now flood the market. Commercial television carries appealing images of the goods on offer; and banks and credit card companies rush in to help one buy – and consume – them.
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Although most characteristic of the big cities, the new consumption is not restricted to them. A recent ethnography of rural Kerala speaks of how consumers in this age of liberalization exercise their choices with care and discrimination, with one eye on their pocket and the other on their neighbour. Rural Kerala, of course, is anything but characteristic of
rural India as a whole. For one thing, the villages blend seamlessly into the towns; for another, many villagers have spent time working in the Middle East, making the kind of money that takes them straight into the middle class. Anyhow, among these new consumers,

styles and tastes are hierarchically arranged, brand-names acting as markers of distinction: a Keltron (Kerala Electronics; a state enterprise) television confers less prestige than an Onida, Indian made, which, in turn, is not as good as a Sony made under licence in India, with maximum prestige attached to foreign-made, imported televisions . . . Sometimes people leave their labels on consumer durables to emphasise their origins.
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As with televisions, so too with a whole range of products from facial creams to cars – the Indian consumer is now spoiled for choice. Once, the only automobiles locally available were a 1950s model Morris and a 1960s model Fiat; now, if one has the money one can buy the latest Mercedes Benz. Middle-class Indians, once very focused on saving for the future, are now grounded much more in the present. Twenty years ago just a handful of Indians had credit cards; now more than 20 million do so. This was once a risk-averse culture, but now millions of Indians invest in property and the stock market.

These changes in production and consumption have led to a fundamental transformation of the urban landscape. Modest homes have given way to grand apartment buildings, one-storey offices to imposing structures in glass and concrete. There are still traditional bazaars, whose makeshift stalls sell locally made pots and pans or locally grown fruit and vegetables; but there are now also large malls which offer, under one roof, such international brands as Levi, Estée Lauder, Sony and Baskin Robbins.

A second consequence of the recent economic growth has been a decline in the percentage of Indians who live below the official poverty line. There is a vigorous scholarly debate on precisely how many poor people there are in India. Some statisticians have concluded that a mere 15 per cent live below the poverty line, while the more pessimistic estimates put the figure as high as 35 per cent. The government of India’s own
estimate lies in between these two extremes – at 26 per cent. While the precise numbers are in dispute, virtually all scholars accept that in both absolute and relative terms poverty has declined in the 1990s. At the beginning of the decade close to 40 per cent of Indians were ‘poor’; by the end of it the figure had dropped by ten percentage points or more.
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Still, there are
huge
numbers of poor people in India – close to 300 million, if one sticks to the official estimate. Many of them are located in the cities. For beyond the glitzy malls and spanking new office buildings lie the slums and shanty towns where the majority of urban residents live. These are the people who service the middle class yet will never be part of it. They ‘sell newspapers they will never read, sew clothes they cannot wear, polish cars they will never own and construct buildings where they will never live’.
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Other slum dwellers labour long hours at low wages, in jobs perilous to their health, such as cutting metal and separating chemicals. They are usually unorganized, liable to be laid off without notice, and without insurance or pension benefits.
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The majority of the poor people in India, however, live in the villages. For the fruits of economic liberalization have scarcely percolated into the countryside. Agricultural growth was painfully slow during the 1990s. There were some attempts at the diversification of crops, at growing fruit and vegetables for the domestic market, and flowers for export. Yet these moves were limited in their success, largely because of deficiencies in infrastructure, i.e. the lack of electricity to process crops or keep them in storage, and the lack of roads to take them to the market.
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Even when it came to that basic resource, food, the picture was less cheering than it might have been. Taking the country as a whole, there was a modest food surplus. ‘Buffer stocks’ of several million tones were being maintained in government godowns. Yet the distribution mechanisms in place were seriously inadequate; in times of scarcity, stocks did not move quickly enough to communities that needed them. The targeting was inefficient; grain from the Public Distribution System (PDS) more easily reached urban areas than rural ones, and rich states than poor ones. And there was terrific corruption; according to one estimate, only 20 per cent of the grain released through the PDS actually reached the intended recipients, the rest being sold on the black market. Hunger and malnutrition remained endemic in many parts, with starvation deaths reported when the rains failed.
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Through much of the country, life and livelihood remained dependent
on the availability of water. Sixty years after independence, a mere 40 per cent of cultivated area was under irrigation. For most farmers, the uncertainties caused by the year-to-year fluctuation in rainfall were compounded by the pre-emption of perennial water sources by the cities. Delhi took its supplies from the Tehri dam, 200 miles away; Bangalore from the Cauvery, 100 miles distant. Home to the privileged and the powerful, the cities got the water they demanded at a highly subsidized rate. Scarcity and discrimination sometimes promoted desperate acts. Travelling in Tamil Nadu in 1993, the journalist P. Sainath saw his train stopped in the dead of night by peasants who then took all the water they could find. Ten years later, when a drought hit northern Rajasthan, herders in Bikaner had to buy water in the open market to save their livestock from dying. The price they paid was 166 times the price a Delhi consumer was paying for his water.
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In the last years of the twentieth century the first farmers’ suicides were reported. This was a disturbingly novel phenomenon, for while hunger and poverty had been a feature of the subcontinental landscape for centuries, never before had so many rural people gone so far as to take their own lives. Suicide, as the pioneering studies of the French sociologist Emile Durkheim had shown, was a product of the anomie and alienation caused by modern urban living. It increased in late-ninetheenth-century France, among migrants to cities dislocated from the protective care of the family and community; and it also, as it happened, increased in late-twentieth-century Bangalore, among young software professionals stressed out by the long hours of work or the rapid success of their colleagues.

Indian anthropologists had previously reported high rates of suicide among some isolated mountain tribes.
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But what was now happening among settled peasant communities was unprecedented. Between 1995 and 2005 there were at least 10,000 suicides by farmers, these occurring in states as far apart as Andhra Pradesh and Rajasthan. Usually it was the male head of the household who killed himself, most often by swallowing pesticides, at other times by hanging or electrocution. In many cases he took this extreme step because of an inability to pay off debts accumulated over the years to banks, co-operatives or private moneylenders. But indebtedness had also been a pervasive feature of rural life; why, now, did it lead so often to this tragic outcome? No systematic studies yet exist to answer this question, but some preliminary speculation might be in order.
Pace
Durkheim, the rash of farmers’
suicides is perhaps related to the rapidity of social change in contemporary India. The new consumer society, its images carried into the villages by television, does place a very high premium on success and failure. Thus, when crops fail, or a new crop does not give the yield it promised, the
personal
humiliation felt is greatly in excess of what it might have been in an earlier, more stable, and less acquisitive time.
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