Two Indias

SOURCE: The Boston Globe, March 15,

The India that President Clinton will visit this week is not the India where I grew up. I remember, from my childhood in the eighties, a plodding and inefficient nation, mired in government bureaucracy, where consumerism meant buying a ticket to Singapore and smuggling in chocolates and pirated cassettes. Today India possesses all the glossy paraphernalia of a modern, globalized country: shiny shopping malls, an upwardly-mobile middle-class equipped with cell phones and sleek vehicles, a booming stock-market, politicians who take every opportunity to champion free-markets.

Things started to change in the mid-1980s, when Rajiv Gandhi, armed with a forward-looking–if unfocussed–youthful energy, loosened the economy from the shackles of state economic control. But the country really took off in 1991, when the incoming Congress-I government, confronted with foreign exchange reserves worth only two weeks of imports, was forced to embrace private enterprise, accept foreign investment, and lower state subsidies.

By far the most conspicuous evidence of the transformation unleashed by those reforms is India’s $4.6 billion software industry, one of the first to be given free rein in the new economic order. Twenty years ago, India’s software companies were but a gleam in the eyes of their ambitious founders: Infosys Technologies, the doyen of the industry, with a market capitalization of $38.8 billion, was started in 1981 with a combined capital of $1000. Now thousands of Indians have become millionaires off a Silicon Valley-inspired culture of stock options and leaping IPOs, and millions more, fired by a proliferation of venture capital, are shaking off the austere garments of Nehruvian socialism that cosseted social and economic life until just a few years ago. Sometimes I find it hard to recognize my own country. Who would have predicted that the shares of Indian companies would one day soar on American stock markets, as Infosys (P/E 942) and Satyam Infoway have over the last few months? Who would have imagined that an Indian–Aziz Premji, the head of Wipro Technologies– would be the second richest man in the world?

Clinton will no doubt congratulate India for these achievements, and Indians will congratulate themselves. They will be right to do so, but they–and Clinton–would do well to notice an increasingly jarring note amid the general pageantry. For even as the metropolises thrive in the sparkle of the New Economy, hundreds of millions of Indians in the countryside–where almost three quarters of the population lives–
are lost in the drab old economy of poverty, malnutrition, unemployment, and subsistence agriculture. At Infosys, mechanics and cooks, flush with stock-options, are millionaires; but over 300 million Indians still live on less than a dollar a day. Today India finds itself in the incongruous situation of possessing a flourishing knowledge-based economy in a country where more than a third of the population is illiterate. The country increasingly risks embodying the “parallel worlds”–the “connected” and the “isolated”–warned of in the 1999 Human Development Report’s assessment of new information and communication technologies.

Political and software industry leaders are not oblivious to these problems. Indeed, many of them are displaying the same unbridled enthusiasm for internet-led development as they have hitherto shown for technology stocks. Dotcom fever has insinuated itself into Indian political discourse, a contagion of pieties about “rural information centers,” knowledge societies, and–in the sunny words of the Indian Prime Minister, Atal Bihari Vajpayee–the prospect of “new solutions to old problems.”

But like the dotcom bubble, much of this optimism is fuelled by unwarranted hopes and utopian aspirations. The challenges of bringing the internet to largely unelectrified villages that lack even a phone line are immense–and, at this moment of triumph, tempting to overlook. I know first-hand how easy it is to forget the other India. In my own house, where we pour greedily every morning over the financial papers, there is little talk of the India that exists beyond the exuberant borders of the pink broadsheets. The talk is of mergers and acquisitions, awe-inspiring entrepreneurialism, and breathtaking wealth that seems to fall into the lap of anyone with a smattering of ambition. After all these years of frustration with the incompetence and backwardness of our state, such talk is seductive, and it is affirming. But it is also precipitate: in its rush to celebrate the India of a new millennium, it forgets the medieval conditions that still circumscribe so many Indian lives.