Occasionally, cracks are visible or can be found in these islands of calm if examined more closely. The hum or visibility of the electricity generator machines can often be heard or seen. The city buses have seen better days. The ubiquity of security guards outside many buildings and shops suggests a problem with intruders. The sheer volume of traffic on the roads occasionally merits a cough or two but the emissions tend to be hidden from sight and detection. The high metal fencing and locked gates around most public parks suggest a concern with exclusion rather than inclusion.
Every now and then, an event happens – for outsiders anyway – which encourages a re-examination of these taken-for-granted views and assumptions. Power cuts for example are common in most of India – irritating but not threatening for us tourists at least. Wait for a few minutes and back on it comes. In July 2012, however, it was more than an irritation. Half the country lost its electricity. Some 600 million people were without electricity. 200 million of this total didn’t have access to any power in the first place but this aside, the country experienced what has been described as: “the largest blackout in human history.” 21 of India’s 28 states had been plunged into darkness. As William Dalrymple put it, the power failure resulted in international scrutiny of “the scandalous state of Indian infrastructure and the failure of the Indian state a full 65 years after Independence to provide even the basic necessities of modern life across most of the country.” Since 2006 China has added about six times more power to its grid than India – 84 gigawatts compared to India’s 14 gigawatts.
The same year, the country was engulfed by another outrage–this time, by rape and sexual violence against women. From then until today, India seems gripped by a series of brutal rape cases. International media reports seem suddenly to have discovered the extent and scale of violence to women in the country. The case of the Delhi bus gang-rape of the twenty-three-year-old student who was returning home after watching a film with a friend in December 2012 resulted in global attention. The death of the woman – popularly named Damini – also provoked thousands to take to the streets in many cities across the country, angry at the unchecked violence against women. In 2013, another story hit the international headlines. Thirteen men were detained after a Swiss tourist was gang-raped when she and her husband were camping in Gwalior, India. Many of the international reports seemed to imply that rape and violence, more generally against women, was a particular Indian problem. A small number of articles did in fact situate the Indian incidents against a backdrop of the situation in France, Britain or the US. It didn’t make for comfortable reading.
Other cracks have become apparent over the last decade. The telecommunications scandal when the 2G telecom spectrum was corruptly undersold by government ministers – amounting to some $40 billion in lost government revenue – raised serious questions of governance. Then the botched and corrupt 2010 Commonwealth Games in Delhi, which many Indian commentators saw as a political and economic humiliation for the country. India appeared not to be ‘shining’. Indeed, it was looking very tarnished.
‘India Shining’
Before and during the 2004 general election, the slogan “India Shining” emerged as one of the defining moments characterising the period. Commissioned from an American marketing company, the marketing and campaign slogan was widely promoted but also aroused critical comment and negative appraisals. The slogan apparently was to highlight the rosy economic progress and future aspirations of the electorate. Today it is for most people viewed with a degree of mirth and ridicule. For others it is seen as encapsulating the unfaltering rise of a country over the last decade or so. Perhaps because of this controversy and debate, “India Shining” remains one of the more memorable slogans of recent years.
For some commentators today though, the ‘shining’ has returned after a dimming over the last few years. Most people are aware of the Indian economic success story of the last two decades. The popular narrative is that the change from Nehruvian socialist forces and other leftist influences, which dominated economic and intellectual life and village existence for so long, eventually embraced the new forces of the global economy. The so-called ‘Hindu rate of growth’ of around 3–4% per year that characterised the post-Partition economy was seen as sluggish, bureaucratic and unacceptable. Liberalisation and the “free play of market forces” came to the rescue in the early 1990s. The minority government of PV Narasimha Rao guided by the Finance Minister Dr Manmohan Singh opened the economy to foreign investment, trade and other ‘liberalising’ winds. The currency was devalued, import controls were dismantled, tax rates were reduced, the public sector weakened and the licensing system on private capital substantially reduced. As a result of the reforms, inflation in the mid-nineties came down from 15% to 6%, growth was around 7–8% and foreign reserves shot up. As Pavan K. Varma put it in one of his widely read books, “The year 1991 removed the stigma associated with the pursuit of wealth. It buried the need for hypocrisy about the aspiration to become rich. Most importantly, it made policies congruent with the temperament of the people… find ways to make money for themselves.” This triumphant but rather nasty tone is not uncommon among commentators in India and elsewhere in the rush towards brave, new capitalism. The era of privatisation had arrived. Western products and ‘brands’ increasingly were available and replaced Indian import-substituted products. Financial credit was cheap. India’s internal market of 1.2 billion consumers provided a tantalising glimpse into the future, especially for foreign investors.
This familiar narrative of poverty to prosperity and from tradition to modernity has been retold in a number of best-selling books in India and today continues to inform understandings in the daily newspapers. The Indian economy has trebled in size over the last decade and average incomes are set to double every ten years. Mobile phone usage has jumped from three million in 2000 to 100 million five years later and about a billion today. It is a persuasive story. Foremost alongside the graphs and figures describing the impressive national economic growth of the last two decades is the widespread acknowledgement of the country’s information technology expertise. Bangalore is the city most often associated with this expertise with over 400 software companies and with customers from around the world. Over the last decade, some $50 billion has been generated by this sector alone, mostly in export revenues. Less well known but also important are Hyderabad, Chennai, Gurgaon and Pune.
Just as important – even more important – as the country’s growth and expertise in IT is the country’s role, nationally and globally, of reliable cheap medicines. Much less publicised than the IT sector, the pharmaceutical production of inexpensive medicines in India is a boost to the poor throughout the world. India today is the largest supplier of generic medicines.
India’s economic and business elite had embraced enthusiastically the latest, new economic version of capitalism that had emerged in the Western economies in the 1970s–1980s. Neoliberalism as it is often called, and often collapsed into ‘globalisation’, saw the emergence of a different kind of economy with changed international rules. Currencies were floated, capital controls were abolished and policy experiments with deregulation, privatisation, marketisation, easily available credit and low personal and business taxes were the new magic bullets that would deliver the promised bounty. Growth rates in most countries did grow although the reasons behind this growth were disputed. Even after the financial failures in the Western economies around 2008, growth continued but at a slower rate. Above all, the new order was defined by soaring inequality, everywhere. Stated bluntly, the growth-inequality paradox of most economies in recent decades is simple: the wealth that has been impressively created in recent decades is being claimed by an increasingly small number of already wealthy people. Beyond occasional rhetorical flourishes that focused on ‘the left behind’, elections, budgets and policies relentlessly drove the brave new world of gross inequality and the accompanying social injustices. Little critical scrutiny is wasted in the m
edia. Instead, in Western economies at least, there appears to be a general acceptance that the ‘captains of industry’ not only merit their gigantic rewards but also that those least able should pay for these rewards. Champions of this new economic wisdom have been the Anglo-American countries but the rest of Europe is following. In the case of India as the Times of India reported in 2014, “The net worth of India’s billionaire community has soared 12-fold in 15 years – enough to eliminate absolute poverty twice over in the country.” Today as Arundhati Roy points out, a number of corporations “run India”. Mukesh Ambani for example is personally worth $20 billion. Reliance Industries Limited (RIL) of which Ambani has a majority controlling interest is valued at $47 billion and includes global interests that cover oil, natural gas, polyester fibre, fresh food retail, petrochemicals, high schools and stem cell storage services. RIL recently bought 95% of shares in Infotel, a TV consortium that controls 27 TV news and entertainment channels in nearly every regional language. Ambani also owns a cricket team.
A number of other corporations boast a dominant economic presence – Jindals, Vedanta, Infosys, Essar and Tata for example. The Tatas are well known in Britain having bought Jaguar and Land Rover, British Steel and Tetley tea. Their other acquisitions of over 100 companies in 80-odd countries include Daewoo, a chain of bookshops, the cosmetic giant Lakmé, the Taj hotel chain, mines, gas fields, broadband networks and entire townships.
It’s not only economic influence and control that drives these mammoth organisations. Their marketing and commercial strategies include immersing themselves in a variety of cultural and artistic spheres. “(F)ilm, art installations and the rush of literary festivals have replaced the 1990s obsession with beauty contests,” observes Roy. This interrelating of the economic with the culture is not particular to India, of course. Part of the neoliberal vision resulting from reduced public funds and the ‘smaller state’ is the involvement of private sponsorship and capital to run schools, hospitals and, in fact, anything and everything. As we all know, ‘everything has a price’. So in London we have the ArcelorMittal Orbit, the UK’s tallest sculpture designed by Anish Kapoor and constructed for the 2012 Olympic Games. Sponsored by Lakshmi N. Mittal, the Indian steel magnate and richest man in the world, the sculpture provided a defining and much discussed addition to the London skyline. I happen to like it but also to not like the intrusion of inevitable commercial contaminations into public spaces.
Anyway, the Indian economy since 2000 has continued to grow. 2005–2007 was just under 9% with a low point being 2013 where growth was 5%. In 2014–2015 the rate was 7.5, and in 2015–16, it is predicted to be around 8–8.5% making India the world’s fastest growing economy. Between 1991 (the ‘freeing’ of the economy) and 2001, the Indian economy trebled in size and, it is worth repeating, average incomes are predicted to double every ten years – quite phenomenal. Comparatively and using a wide variety of indicators (such as ownership of mobile phones, the number of available TV channels, car ownership or foreign holidays), it is possible to grasp the extent of this change and it is breathtaking. For millions of people, the impact of these changes on their everyday lives has been staggering.
The context of this staggering impact on people’s everyday lives, however, needs to be remembered. As was outlined in an earlier chapter, some 300–500 million people live in poverty depending on how ‘poverty’ is defined – a “tolerance of the intolerable”, in Dréze and Sen’s memorable phrase. Maternal mortality rates are higher than that of Sudan, Ethiopia or Bangladesh. Infant mortality in the state of Madhya Pradesh is higher than Senegal or Eritrea. Malnutrition in Gujarat, one of the richest states, is worse than the average level of malnutrition in sub-Saharan Africa. Structurally and politically, there are emerging ‘rich’ and ‘poor’ states with Gujarat, Maharashtra, Punjab and Haryana being winners, and Orissa, Bihar, Rajasthan, Madhya Pradesh, Tamil Nadu, Karnataka and Uttar Pradesh being amongst the losers. Andhra Pradesh and Kerala are rising stars. Key factors seen as dividing these states’ well-being are the usual list of developments: that is, infrastructure progress (railways, electrification, power supplies, education enrolment, health facilities), and secondly, local state expenditure.
Today, India indeed does seem to be ‘shining’ but in particular and distinctive ways. The figures are impressive and life for millions of people has improved considerably in recent decades. There are, however, a number of historical structural features to the ‘growth miracle’ that sets apart the Indian economy. Perhaps the most important is a feature that rumbles away in the background discussions and debates. As many commentators have pointed out, the Indian economy has this peculiar, unique or ‘strange’ quality – the dominance of the service sector at the expense of the manufacturing sector. As pointed out in the earlier chapter, India has a lopsided unbalanced growth profile. Sustaining economic growth on the back of the service sector is not the usual pattern for future development. Generally speaking, industrial growth, a declining agricultural sector, productivity growth and technological advancement are seen as the necessary mix for economic development. Dependence on natural resources and agriculture diminishes. Yet India has not followed this path. This distinctive character of the Indian economy helps explain some of the differences between itself and China over the last 30 years or so. Indian manufacturing accounts for only 15% of GDP, while in China, it is 32%. In Thailand, it is 34%, the Philippines 31% and Malaysia 24%. India has yet to experience the economic transformation that has swept through China, a transformation that has been built on the expansion of manufacturing production from textiles, garments, toys, cars through to ships and electronics. If you want to prosper, you have to make things. The current Modi government’s campaign to “Make in India” and to tackle ‘business bottlenecks’ are seen by many in the country as belated recognition of the need to focus on manufacturing. As one newspaper headline put it, “Can Modi Turn Indian Manufacturing’s Whimper Into A Roar?” There are though two important characteristics of India’s manufacturing sector which are seen as limiting its effectiveness: first, it is small, and second, productivity is low due to the small scale of most manufacturing firms. Despite abundant, low-skilled and relatively cheap labour, the manufacturing sector is capital and skill intensive.
A further important element contributing towards this weak manufacturing sector is the country’s infrastructure which has been an important focus in the new government’s first years. Recognising that the infrastructure sector is crucial to future economic growth, the government has earmarked considerable funds for rail, roads, ports and the aviation industry. National highway development, roads to unconnected rural villages, new metro schemes in large cities, the development of 100 new ‘smart cities’, new ports and airports and monies set aside for rural infrastructure are some of the listed projects itemised in Modi’s first two budgets. We shall see – the record is not a good one for such lists.
If manufacturing has traditionally been the way forward for developing economies, it is not so easy today for a country such as India. While the reasons behind the need for such an infrastructure and manufacturing ‘catching up’ is agreed by many commentators – the locking out the Indian economy from global trade and investment for some two hundred years by the British – the difficulties ahead are formidable. Moving from low-paid agricultural jobs into better paid urban employment is a little more complex today. It was always going to be difficult to mirror China’s export-driven manufacturing strategy. The wobbles in the Chinese economy in mid-2015 have made this export-driven model even more difficult. Furthermore, manufacturing today is increasingly characterised by its technology rather than its labour content. Yes, India has the technological expertise, but it is too small a sector to absorb the millions of new entrants into the labour market each year. India will need to expand its manufacturing sector but not at the expense of its service expertise.
There is a further structural problem that weighs heavily on attempts to reform and add
ress the peculiarities of the Indian economy. Any attempt to turn into reality the “Make in India” campaign of the current government or to regenerate the country’s dilapidated infrastructure will need to deal with the crisis in the agriculture sector. This is where more than half the country works and lives – some 200–300 million people. Other estimates put the figure around 600 million. According to government figures, just over 60% of the population is designated as rural and dependent on agriculture.
Rural desperation
Outlook the popular Indian magazine seems to agree with Dréze and Sen’s worries about the neglect of agriculture and rural development. In 2016, they ran a series of articles which warned that “many in New Delhi have not grasped the enormity of the rural crisis and how this could affect the India story.” Unlike wandering around Indian cities, rural India is difficult for tourists to grasp or experience. Train windows on long journeys provide a romantic but distorted glimpse of events. Workers in the fields walk behind wooden ploughs pulled by bullocks, grasses and cereals are scythed and neatly tied together awaiting collection in the evening, and food and water breaks are taken under any shade available. In scenes such as these, as the guidebooks tell us, things seem to have changed little over the centuries. Along the wine-growing areas visible from the train on the route from Mumbai to Aurangabad on the other hand, the latest labour methods with the latest technology provide an oasis to the more common impoverished rural vistas. Neat, ordered vineyards with their accompanying ‘Chateaus’ would not look out of place in the Bordeaux region of France. Big money, high tech and a highly-skilled and trained workforce constitute something of a sudden shock to the traditional views from the carriage window.
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