What's new

Indian Economy - News & Updates - Archive

Status
Not open for further replies.
Behind the Miracle: India's Mighty Movers
This elite group of business, political, and cultural leaders is helping transform India into a 21st century economic power in Asia and beyond
by Nandini Lakshman
BusinessWeek

As India approaches its 60th year of independence on Aug. 15, the world marvels at the country's rapid economic ascendancy. The emergence of India's globally ambitious business outsourcing companies such as Infosys (INFY) and Wipro (WIT) and high-profile cross-border mergers such as Tata Steel's $11.3 billion deal to buy British steelmaker Corus continue to make the country a fascinating business story.

India is also evolving from foreign direct investment backwater to money magnet for global multinationals. Foreign executives across a swathe of industries, from autos to consumer goods, see a huge consumer economy emerging as years of high-speed growth in the 8% range enlarge India's middle class.

By 2025, India is expected to emerge as the world's fifth-biggest consumer market as incomes and living standards improve, according to a study by the McKinsey Global Institute. Nearly 300 million Indians are expected to escape poverty, and the middle class will leapfrog by a factor of 10—from 50 million today to roughly 583 million 18 years from now.

The Country's Top 50
Often less noticed are the individual figures—the politicians, business leaders, and cultural pathfinders—instrumental in India's remarkable rise on the world stage. Without the initiative, enlightened leadership, business smarts, and style of scores of notable Indian leaders, there would be no economic miracle.

So who are the movers and shakers refashioning contemporary India? That's what a team of BusinessWeek editors sought to discover by compiling a list of the country's 50 most powerful leading lights in politics, the economy, and society. To take a look at the names we came up with in this by-no-means exhaustive list, check out the slide show we have assembled.

Some of our choices aren't controversial. They include Tata Group Chairman Ratan Tata, whose conglomerate is in the midst of a dramatic expansion and is interested in the Jaguar luxury car business now controlled by Ford (F). (Tata is up against private equity player Ripplewood Holdings in that bidding contest.)

A Sporting Chance
In the political sphere, Commerce Minister Kamal Nath, once considered a less-than-impressive member of the Congress Party, has emerged as one of the country's most reform-minded politicians. He has put in place a new patent act, deregulated the retail industry, and has been a fierce advocate for the developing world in the current contentious Doha round of global trade talks.

Indian sporting and cultural figures are also inspiring Indians at home and gaining followings abroad. Sachin Tendulkar is still the star master batsman of the Indian cricket team, but he's getting competition from younger lads from the farthest corners of India. And tennis star Sania Mirza has wowed Indian sports fans in a country where cricket rules.

Indian fashion designers are mixing traditional local fashion motifs with a contemporary feel, and some, such as Ritu Kumar and Tarun Tahiliani, are making their presence felt internationally. Celebrities and creative talent from the Bollywood film industry—still wildly popular from Jakarta to Jeddah, with its musical routines and family fare—are also well-represented on the list.

Widening the Circle
Of course, when it comes to India's robust economy, many heroes are to be found in the corporate world. With the IT industry no longer the sole face of a global India, this list draws special attention to rising industrialists such as B Muthuraman at Tata Steel and Kumar Mangalam at diversified Aditya Birla Group.

That's not to say that Infosys' N R Narayana Murthy, Wipro's Azim Premji, and Tata Consultancy Services' (TCS) S Ramadorai are not interesting executives, but there's more to India than just outsourcing. Similarly, you won't find Arcelor Mittal's (MT) Lakshmi Mittal on the list, despite his fame in the global steel industry. He's a British citizen and has only recently started looking at investing in India.

Make no mistake: India has plenty of challenges ahead. Its vibrant outsourcing sector faces the twin challenges of rising wages and stiffer competition at home from the likes of IBM (IBM) and Accenture (ACN). For every enlightened politician, there are others who stand in the way of economic progress.

Yet the odds are good that India's economic and social dynamism (it is home to the youngest population in the world) will be worth watching closely in the years ahead. And the individuals that make up BusinessWeek's India's 50 Most Powerful People roster will be playing leading roles in this drama.
 
Why I put my money on the elephant over the dragon
India may yet win the struggle for economic supremacy in the East
Maria Misra
From The Times
August 13, 2007

With the sixtieth anniversary of independence, enthusiasm for India in the West is at an all-time high. And though the Hindu nationalist slogan “India Shining” was decisively and derisively dismissed as overoptimistic in India itself at the 2004 general election, among Western commentators the sub-continent’s sparkle remains untarnished. India seems to be the nation of the future – a vibrant, democratic, multicultural and increasingly free-market alternative to the grimly uniform authoritarianism of China. India seems finally to have fulfilled the dream of its chief architect, Nehru, who predicted that, once freed from the British Raj, the new nation would become a free, democratic and developed state – the global embodiment of “the spirit of the age”.

And yet journalistic optimism has not been reflected in the decisions of hardheaded Western businessmen, who continue to prefer India’s nominally communist neighbour, China. Despite a recent upturn in foreign investment, India still receives only a fraction of China’s share. Business has good reason to be cautious. For while the rise of India’s high-tech and software industries strikes fear among the West’s white-collar workers, in reality a bare 3 per cent of the population speak good English and 30 per cent are illiterate. India’s electricity consumption is but one third of the world average; and only 2 per cent of its roads are four-lane highways.

Western businessmen are not the only ones making unfavourable comparisons. Indians themselves are haunted by success of their Chinese neighbour. In the 1960s they fretted about not being as good at socialism, now they fear they aren’t as good at capitalism either. Indian commentators are rather divided on how to respond – unsure whether to beat them or join them. The ranks of Indian pop-economists urging the tiger to roar at the dragon, or the tortoise to sprint past the hare, are matched by those dreaming of a new global entity – Chindia. The partnership of China’s awesome manufacturing power with India’s enviable IT and services sector would make Chindia the factory and back-office of the world. The problem with this scenario is that China is beating India in the services sector, too.

For India’s more sober policymakers, emulation rather than partnership or head-on competition is the preferred response. In Nehru’s time, teams of bureaucrats crossed the border to study collectivisation. Now it is a phalanx of CEOs who descend to analyse management style and productivity gains. The Government, too, is keen to copy the Chinese. But efforts to promote foreign investment are being obstructed by an unlikely coalition of Maoist peasants, neo-Gandhian middle-class eco-warriors and a finance minister fretful at the loss in tax revenues. So, despite the frothy headlines, India’s economy, in comparison with that of its dragon of a neighbour, remains a lumbering, if frisky, elephant.

What lies behind India’s relatively disappointing performance? Some blame Gandhi and his Luddite ruralism; others castigate Nehru for the lost decades of planning, and everyone cites pervasive corruption. But none of these is convincing. Gandhi is the patron saint of India, not its chief economist; the legacy of Nehru was not all bad; and if corruption inhibited growth then China would still be in the Dark Ages. The truth is that India’s problems are not so much economic as political.

This is not, as was once fashionably asserted, because India is a democracy, while China is authoritarian. Democracy is not necessarily an obstacle to rapid economic development, as the reconstruction of Japan and Germany testify. The problem is not democracy, but how it is practised. And here the British must take a bow. For along with railways and the English language, the British also left behind a legacy of profoundly politicised identity politics. And India’s multiple caste, linguistic and religious communities continue to see themselves as bitter competitors for the largesse of the State, not as collaborators.

Sadly India’s politicians have often found themselves unable, and sometimes unwilling, to tackle this fractiousness. Caste divisions can become electoral constituencies and in consequence, Indian governments have found it difficult to establish any sense of common national purpose – and with it the willingness to pay the taxes necessary for education and infrastructural spending.

Indeed, the corrupt and often violent recent history of Indian democracy, with its far-right Hindu nationalists, panoply of caste and regional parties and unstable coalitions, springs from the same source as its sluggish economic reform: deeply entrenched social and political fragmentation.

But will India always remain the tortoise-elephant to China's dragon-hare? If India could transcend its fractious politics (and there are signs in recent elections that it might), then it certainly has the potential to excel economically. It has a demographic advantage over China – it will have a larger working-age population by 2050. Its diversity is also a source of creativity – something its dour northern neighbour fears it may lack. And while China’s rulers have managed economic liberalisation masterfully, it remains to be seen whether they can achieve the same miracle in the political sphere. China has enjoyed the short-term bonus of authoritarianism – the power to impose restructuring regardless of popular opinion – but authoritarianism also brings a lack of transparency. Many commentators believe this has shrouded serious overinvestment, bad debts and potential asset bubbles.

Moreover, China – unlike India – has not been effective at managing its gross regional inequalities. Few doubt that China’s economic triumph will eventually bring political turmoil in its wake.

India, unlike China, has had 60 years of experience in managing political turmoil. Though there are pockets of extreme radicalism, Maoist factions and Islamist extremism, mass revolutionary violence is highly unlikely; people accept the mediation of political conflict through elections. And so, paradoxically, though India's political life is chaotic, it is also curiously stable. India’s elephantine advantages may yet win out.

Maria Misra is a Fellow of Keble College, Oxford, and author of Vishnu's Crowded Temple: India Since the Great Rebellion
 
Keeping a tryst with destiny
Last Updated : Monday 13 Aug, 2007 -
7DAYS, United Arab Emirates

Ashok Soota, who founded software maker Mindtree Consulting in 1999, calls himself a “late-stage” entrepreneur, much as India is a late convert to free-market philosophy. The entrepreneurial urge seized Soota when he was 57, an age when most people think of retiring, and after he spent 15 years building Wipro Infotech into a $500 million company.

The soft-spoken businessman exemplifies the pent-up ‘entrepreneurial energy’ Prime Minister Manmohan Singh says was unleashed in 1991 when he freed private enterprise from the License Raj that shackled it for four decades after independence. “We didn’t have to send our software through government monopoly lines but could do so through our own digital communication links; to the extent that the software industry benefited from reforms,” said Soota, now 64.

“We escaped the tyranny of our government-owned infrastructure, which had held back the manufacturing sector,” he said. Soota worked in manufacturing during 20 years at the DCM Group, where he won a reputation as a turnaround specialist, before joining Wipro in 1984.

He has set the bar high for Mindtree, which received investor demand for 100 times the modest $50 million it sought to raise in a share sale this year. Soota is targeting a five-fold jump in sales to one billion dollars by 2012. Such ambition would have been wishful-thinking during the four decades that India’s economy lay in a socialist cocoon, expanding at an annual pace of 3.5 per cent derisively referred to as the ‘Hindu rate of growth’.

The public sector was put at the ‘commanding heights’ of the economy by first Prime Minister Jawaharlal Nehru and his daughter Indira Gandhi, who ruled India for more than three decades after the British flag was lowered on August 15, 1947. In promoting a ‘socialistic pattern of society’, they shunned foreign investment and imports and discouraged production for export.

Loss-making government companies, headed by bureaucrats, produced and sold everything from coal and steel to gas and electricity. Shortages were chronic. Governments dictated what private companies should produce, how much and at what price they could sell under an elaborate licensing system that made for multiple layers of red tape and promoted corruption.

Shock therapy was needed to trigger change and drive India’s economy towards keeping the “tryst with destiny” Nehru predicted in his classic Independence Day speech. Faced with a virtually empty treasury in 1991 and forced to sell gold reserves abroad to avoid defaulting on national debt, Manmohan Singh, then the new finance minister, bit the bullet.

An economist and unlikely politician, Singh ordered a double devaluation of the rupee to spur exports and hacked away at the ‘License Raj’. The doors were opened to private competition, foreign investment and trade. “The year 1991 marks the dividing line in the history of the Indian economy,” said Pai Panandiker. “When you talk of the economy, it’s in terms of pre-1991 and post-1991.”

The Indian economy has grown at above eight per cent in each of the past three years. Per capita income has doubled in ten years. Singh’s government is sitting on $200 billion in foreign reserves, compared with $1 billion in May 1991 that wasn’t then enough to pay for a fortnight of imports.

The country’s businessmen are now splurging billions of dollars to acquire firms abroad, from Ratan Tata’s $13.7 billion for Anglo-Dutch steelmaker Corus to Vijay Mallya’s $1.2 billion to snap up Scotch-whisky maker Whyte & Mackay. India is now the fastest growing wireless market, adding six million mobile-phone users monthly to the 157 million it had as of March 31.

Automobile sales, which reached one million in 2003 after growing 68 per cent in five years, will likely touch 20 million by 2030, making it the biggest car market after the US and China. Indian air carriers, which have 480 aircraft on order to be delivered by 2012, expect domestic traffic to double by 2010 to an annual 60 million passengers.

“India has just one caste today – the consumer caste,” said GR Gopinath, 56, who founded the country’s largest discount carrier Air Deccan in 2003. “India is seen now as a country of one billion hungry consumers, not as one billion hungry mouths to be fed,” he added. India’s consumer spending is set to quadruple to $1.5 trillion by 2025, overtaking Germany at the number five spot, as a youthful population earns more and millions climb out of poverty, according to McKinsey Global Institute.

But dire poverty remains a fact of daily life. “The gap between the top and the bottom has widened even more inside the country,” conceded entrepreneur Soota. “That’s because the bottom never rises in the same proportion as the top. But there is so much optimism built in,” he added. “There are so many opportunities.”
 
India at 60: special report
Since it cast off colonial rule in August 1947, India has become one of the most powerful nations on earth. But what has it sacrificed along the way? Andrew Buncombe goes in search of the Subcontinent's soul
Published: 10 August 2007
Independent, UK

Ten miles south of Delhi, where the dusty scrub has been cleared and replaced by an ocean of quick-setting concrete, India is road-testing a new vision of its future. Gurgaon is a satellite city with endless shopping malls, high-rise apartment blocks and more than one million people. It is also the laboratory for an experiment with global implications.

Sixty years after gaining independence from Britain, the world's largest democracy is at a crossroads. A crucial struggle is taking place over which direction this economically resurgent nation should be taking. It may not be obvious to an outsider, but spend an hour or so in the consumer's dream that is Gurgaon and it becomes abundantly clear where the powerful and aspirational segment of the population has its collective eyes fixed as India stands poised to make the transformation from an impoverished, backward country into a superpower. And it is not on its former colonial master.

Just come away from the heat and the noise of this vast building site and step into the air-conditioned Sahara Mall. By no means the grandest of the shopping emporiums on the chaotic, fume-filled highway known as MG Road, it is already an established magnet to India's newly wealthy middle class. There are fashion shops, department stores, jewellers, sports stores selling Nike, there is a cinema on the top level showing Bollywood and Hollywood hits. Most interesting is a fast-food restaurant that offers cleaned-up versions of Indian street food, with staff dressed in baseball caps and bowling shirts; an idealised Indian interpretation of an idealised American vision of itself.

Whatever modern Britons may think of India, and despite our celebration of the fact that "curry" has become a national dish, it appears India no longer feels the same way about us. Its people are respectful, yes; polite, certainly. But whatever cultural lodestone Britain may once have represented to wealthy Indians, with their love of cricket and regard for English-style public schools, times have changed. Today, they buy into the American Dream instead.

On the top floor, Sandeep Seth and a friend are sipping smoothies. Mr Seth is 28 and works in IT. He is wearing a college-style T-shirt of brushed yellow cotton. Though his job is in another satellite city, Noida, he lives in Gurgaon and makes the 90-mile daily commute. For all his Western looks and habits, Mr Seth appears to resent the suggestion that India is becoming Americanised. Yet asked about what is happening here on MG Road and what it represents for India, he says: "It's the culture changing. There is a change in the mindset. If people go to the US they will bring things back to India. Society cannot be stagnant."

THE FORMAL return of Indian sovereignty took place at midnight on 15 August, 1947, precisely 24 hours after Pakistan, too, had become an independent nation. Two months previously, on 3 June, Viscount Lord Louis Mountbatten, the last British Governor-General of India, had announced the partition of the Indian Empire, under pressure not just to grant independence but to create both Muslim and Hindu nations.

Hours before independence was returned to India, Jawaharlal Nehru, the man who would serve as the country's first Prime Minister, spoke to the country's Constituent Assembly about what he famously framed as India's " tryst with destiny". "At the stroke of the midnight hour, when the world sleeps, India will awake to life and freedom," he said. "A moment comes, which comes but rarely in history, when we step out from the old to the new, when an age ends, and when the soul of a nation, long suppressed, finds utterance."

In the years following Partition, when countless thousands on either side of the religious divide were killed and when millions were forced from their homes and made to relocate to the other side of a line that for them existed only on a map, India's politics were dominated by Nehru and his quasi-socialist beliefs. In its foreign policy, India sought to remain neutral from the machinations of the Cold War and was a founding member of the Non-Aligned Movement.

In economic terms India, in the post-independence period, operated under the so-called "licence raj", a complex system of regulations and bureaucracy established as part of the centrally planned economy. But, confronted with economic crisis at the beginning of the 1990s and the need to attract more foreign investment, the government of Pamulaparthi Rao liberalised the economy by removing many of the restrictions and opening up the country to foreign capital. It was those reforms – initiated in 1991 and which did everything from opening the financial markets to reducing tariffs – which are today credited as the catalyst for India's economic growth.

Not surprisingly, it has been America that has made the most of this liberalisation and become India's dominant trading partner, creating an influence it was not able to lever politically in the previous decades. In both exports and imports, the US is now India's number-one trading partner. While Britain stands in third place, its total trade with India is considerably less than that of the US. Indeed, Britain's largest export to India is scrap metal.

It is not just in terms of trade that the US is proving the dominant influence. In the field of higher education, America long ago eclipsed Britain as the most sought-after destination for undergraduates. Last year US colleges took in 88,000 students and academics, while Britain only managed to secure 20,000. Even Oxford and Cambridge are being forced to compete to attract India's best brains.

At a book launch one recent sweltering evening at the British Council's offices south of Connaught Place, a documentary film-maker who had studied in Britain was bemoaning the fact that her daughter had no interest in following the same path. "She's only interested in going to America," she said. "I'd hoped that she'd want to do the same as me."

The implications of such a shift in the ambitions of smart, young Indians go beyond simply losing the battle to attract the best students to Britain. Students travelling to the US to study, perhaps spending several years there, are inculcated with American culture while they are there. They absorb its politics, its fashions, its tastes, its clothes and music and, of course, its aspirations. They watch its news broadcasts, they listen to Fox News and to CNN. They go shopping at Wal-Mart, or spend time in shopping malls. When they leave they are likely to retain very strong bonds with the country.

"In a nutshell, it's a loss with very long-term consequences," said Frances Cairncross, the rector of Exeter College, Oxford. " Students may stay for a while and contribute their skills and intelligence to our economy [and] when they go home, their cultural and economic links are with the country that educated them. So we will feel the repercussions for a generation to come."

THERE is a new-found vigour about India that sometimes borders on the brash. You can positively sense the optimism and confidence that exists within the middle classes and political élite, a feeling that after all these years of waiting – and with the shackles of colonialism having been thrown off – India's time has finally arrived.

You can detect this in numerous ways. You can see it in the world of publishing and television, in the expansion of India as a retail destination. You even sense it when the shop assistants laugh at you when you opt for a cheap mobile phone rather than the $400 model they had selected for you. "That's what the rickshawallahs have," they say.

It is apparent in the swagger of politicians such as Kamal Nath, the country's Minister of Commerce and Industry, who declared earlier this year: "We no longer discuss the future of India. We say: 'The future is India.'" One can detect it in the sense of entitlement that imbued the reporting of the recent "123" nuclear technology deal between India and the US.

One of the most powerful indicators of India's transformation is in the world of sport. Recently India learnt that it had been chosen as the latest Asian host for Formula One racing and as a site for the European Golf Tour. In India the move was welcomed as another indication of the country's emergence on to the world stage. "It's a matter of pride for the nation and a big step towards placing India as a true sporting destination," declared Suresh Kalmadi, head of the Indian Olympic Association.

The same was true of the golf tournament. While there was some grumbling from rival organisations, most people involved in the sport were enthusiastic about hosting this event. One afternoon at the prestigious New Delhi Golf Club, where groups of women were preparing to tee off, in (American-style) golf visors, one woman official revealed that female membership had grown from 66 to 220 in two years. "Golf is more than crazy popular here," said Hanisha Daryani. "It's part of the economic boom, it's called the 'India Story'."

All the while India is busily preparing to host the 2010 Commonwealth Games, frantically building new facilities and giving Delhi a facelift that has even extended to new hygiene laws for street vendors out of a fear that the country's international sporting visitors will fall foul of "Delhi belly ". When Mani Shankar Aiyar, the Minister of Youth Affairs and Sports, suggested that India's bid to host the Asian games of 2014 would do little to help the country's ordinary citizens, there was outcry. When India lost out to the South Korean city of Incheon, Aiyar was branded a traitor. " There is a segment of Indian society which is extremely rich and which wishes to see itself in the international league," Aiyar later told me. " I wish to see all the people of India benefit rather than just a segment of our people."

Many Westerners, especially those whose view of India has been hazily shaped by holidays that have left an overwhelming impression of India's " spirituality", may be surprised by the readiness of large swathes of the public to adopt this new incarnation so readily.

And yet Indians see no problem. In his seminal book Being Indian, The writer Pavan Varma devotes a chapter to the "myth of otherworldliness". " Indians have deliberately promoted an otherwordly image," he writes. " They've always had a down-to-earth relish for the materialistic world. Far from being disdainful of the temptations of money and wealth, they have consistently given value to these goals."

It is an important lesson. Varma explains there is nothing in Hinduism that ideologically leads a follower to reject the material world for the spiritual. "Contrary to the notion that Indians are 'spiritual', they are really 'material-minded'," he adds. "They are materialists, believing in substance. There is a continuity, a constant flow of substance from context to context, from non-self to self – in eating, breathing, sex, sensation, perception, thought, art or religious experience."

AND YET for all the swagger one encounters and for all the rapacious consumerism on display, the talk of India having transformed itself into a superpower is, at least for the time being, somewhat overdone.

No one should doubt that the gains made by India's economy, currently growing at around 9 per cent a year, are not genuine and that they will not have an impact that changes the world order. Already India's place in the list of world economies is shifting. Two years ago its economy joined the world's top 10 and earlier this year a report by the investment bank Goldman Sachs predicted that within a decade it will surpass that of Italy, France and the UK to become the fifth largest. The report said that if current trends continue, the Indian economy will by mid-century have overtaken that of the US as well, leaving it second only to China.

But alongside these achievements, India is facing considerable problems as it seeks to emulate the US or even eclipse its superpower status. From a purely logistical perspective, the most serious of these is a shortfall in the infrastructure required to support its vision for the future.

This shortfall is apparent in many frustrating ways: in the water shortages and electrical power-cuts that befall even the biggest cities during the summer months, in the roads so clogged with traffic that it takes for ever to travel even a few miles and which become all but impassable during heavy rains. An investigation published by Business Week magazine included an assessment from Gajendra Haldea, an adviser to the federal planning commission, who has estimated that losses from congestion and poor roads cost India $6bn a year.

All the international companies that have come to India have realised the only way to ensure they can operate is to establish private campuses in cities such as Bangalore and Gurgaon, away from the local infrastructure, and with their own power and water supplies.

Others use planes to provide parts and materials to their factories or assembly plants, saying it is economically unviable to rely on the country's road haulage system. The same is said of the ports. And despite these provisions and despite the country's resource of a well-educated, English-speaking workforce, India's logistical capacity is so inadequate that many companies are opting for alternative countries in which to locate their plants. "We believe in manufacturing in India, but we don't believe in logistics in India – yet," said Wim Elfrink, Cisco Systems' chief globalisation officer.

Anyone taking to the skies in India receives as powerful an insight that exists into the inability of India's infrastructure to keep up with the demands of its middle class. In recent years a flood of new, cheap airlines such as Kingfisher, Sahara and Jet have started flying, based on the low-frills operations that revolutionised air travel in Europe. Journeys that once took several days by train can now be made in a couple of hours and the operation of the airlines themselves is sleek and efficient.

But recently flying has become increasingly less pleasant. Insufficient runway space, air-traffic controllers and more, mean that planes are often late taking off and are routinely required to circle before landing, wasting countless gallons of fuel and disrupting schedules.

THERE is another side to all of this. Not everyone agrees upon the future India should be taking, with the consumerist-driven project taking place in Gurgaon, with its malls and the pastel-coloured apartment complexes that come with names such as Beverley Park and an unspoken promise to satisfy every resident's aspirational dreams.

Many point out that while India's new middle-class may total two or three hundred million people, it is still only a portion of the country's population. Only a tiny percentage is employed by the much-celebrated technology sector. Most powerfully, while the statistics are hotly debated, there are clear indications that the gap between the new middle-class and the poor is getting bigger and that inequality has grown. The vigorous new India is only for some. Indeed, the reality is that hundreds of millions of Indians live in grindingly desperate poverty.

In a nation of 1.1 billion people, at least 300 million live below the official poverty line of $2 a day. Many millions more live close to this line. The adult literacy rate is around 61 per cent. Life expectancy stands at 64, while the under-five child-mortality rate is 57 per 1,000, though in rural areas the figure is closer to 62 per thousand. There is a widespread problem of child labour.

The Hindustan Times recently ran a series of articles which claimed that one in six Indians lived in an area of armed insurgency. Many of these struggles are decades old, but is it possible that some recruits to the cause are driven there as a result of the growing disparity within Indian society?

"I think these are signs of a lack of inclusion, that people do not feel involved with what is happening," said M J Akbar, a veteran journalist and editor-in-chief of The Asian Age newspaper.

Others have pointed out the environmental costs of the economic transformation. In many cities the roads, already desperately over-crowded, are becoming ludicrously clogged with new, affordable cars. In Delhi alone, the number of new vehicles being registered grows by 16 per cent every year. The implications in terms of C02 emissions and the battle for global resources are vast as India and its 1.1 billion people seek to emulate the lifestyle of the West – a lifestyle that on average consumes 26 times more energy.

In a 2005 interview with Reuters, the writer and activist Arundhati Roy said while thousands of farmers were committing suicide because they couldn't feed their families, people were too distracted by the pursuit of economic growth to think about the impact of growing cash crops such as soya beans, peanuts and sugar cane which use up scarce water resources.

"Even if you know what is going on, you can't help thinking India is this cool place now, Bollywood is 'in' and all of us have mobile phones," she said. "There is no understanding whatsoever of what price is being paid by the rivers and mountains and irrigation and ground water, there is no questioning of that because we are on a roll."

She continued: "The idea of turning one billion people into consumers is a terrifying one. Are you going to starve to death dreaming of a mobile phone or are you going to have control of the resources that are available to you and have been for generations, but have been taken away so that someone else can have a mobile phone?"

In the run-up to next Wednesday's anniversary, I sought out the wisdom of experience. Sir Mark Tully was the BBC's bureau chief in India for 22 years and has been honoured by the Indian state. Tully Sahib, as he is generally referred to, lives in a flat close to the site of a magnificent Mughal tomb that glowed in the early evening light. Though he resigned as a BBC correspondent a decade ago, he continues to work as a presenter for Radio 4 and is the author of many books about India, the country of his birth.

In his most recent book, India's Unending Journey, Tully talks a lot about the issue of "growth". He concludes that while growth is important to help the poorest emerge from poverty, growth by itself is not enough. Furthermore, he argues the growth must be suited to India's needs and requirements rather than the pressures of the globalised economy.

Tully, dressed in a long, mauve kurta, said that despite the creation of a consumer-orientated middle class, he was not persuaded that Indians had been entirely transformed. "Scratch below the surface and you will still find there is still [a lot] of spirituality – even among those going to the shopping malls," he said.

Asked about India's future, Tully chose to recall a conversation – included in his latest book – with Ravi Venkatesan, the chairman of Microsoft India. Over lunch at the company's Gurgaon offices, Venkatesan showed Tully a computerised diagram that the industrialist believed represented India's options.

The diagram showed a crossroads with arrows leading to three different elephants. The arrow leading to one elephant rose and then fell dramatically; this was the future if India continued on its current path of rapid growth that only helped a minority of people. Another arrow pointed downwards, with an elephant slipping in free fall; this was India's future if the entire global economy came to a halt.

The third elephant – its tail up in sprightly fashion – was balancing the globe on its trunk; it represented "India First" . Tully was told that this could be the outcome if everyone put the nation first, " determined that the entire country should benefit from its development".

'AN EXAMPLE TO THE WORLD'
By Simon Usborne

"There can be no question of coercing any large areas in which one community has a majority to live against their will under a government in which another community has a majority. And the only alternative to coercion is Partition."

Delivered on 3 June 1947, those were the words of the last Viceroy of India, Lord Mountbatten, as he announced the end of 163 years of British rule, and the cleaving of the subcontinent into two.

A month later, Britain announced that Partition would take place at midnight on 14-15 August. By that time, trouble was already brewing along the arbitrary line designed to protect India's minority Muslim population by creating the northern dominion of Pakistan. Hurriedly drawn up by Cyril Radcliffe, a British lawyer who had little knowledge of India and using out-of-date maps and census materials, the line divided communities and left tens of millions of Hindus and Muslims in the "wrong" country. The states of Punjab and Bengal would be cut in half.

On 13 August, just over 24 hours before Partition, the Associated Press reported from Punjab's capital Lahore on the state's "bloodiest orgy of violence in five months of communal rioting". On that day alone, one Lahore hospital reported the deaths of 99 Sikhs and Hindus in knife attacks and six Muslims killed by military and police.

In Karachi the following morning, as Mountbatten and the new governor general of Pakistan, Mohammed Ali Jinnah, addressed the newly formed Pakistani Constituent Assembly in the first of two independence ceremonies, the mood was one of jubilation. Watched by millions on newsreels and thousands lining the streets outside Government House, Mountbatten read a message from King George VI: "I send you my greeting and warmest wishes on this great occasion... In thus achieving your independence by agreement, you have set an example to the freedom-loving peoples throughout the world." In reply, Jinnah assured the world that he would work to preserve peace.

Immediately after the ceremony, Lord and Lady Mountbatten flew to Delhi, where the next day, 15 August, hundreds of thousands of Hindus thronged the streets awaiting their own hour of liberation. The ceremony began at 11pm in the State Council building, where the new Prime Minister, Pandit Jawaharlal Nehru, said: "At the stroke of the midnight hour, when the world sleeps, India will wake up to life and freedom."

As the dignitaries left the ceremony in a horse-drawn carriage, carefully laid plans for celebrations were dashed as delirious crowds broke through police cordons in a near-riot. Elsewhere, thousands rejoiced as they filed out of radio shops, where they had listened to Nehru's independence speech.

But, as many cheered, reports from other areas told of growing unrest. Learning of Partition just weeks earlier, many Indians were still on the move as some 10 million Hindus, Muslims and Sikhs fled their homes to cross the newly drawn border. Moving in caravans sometimes 70 miles long, entire columns of refugees were attacked and sometimes slaughtered, while trainloads of migrants were killed, their bodies sometimes horribly disfigured. The number of people killed in the exodus is still unknown, but many historians put it at about one million.

Lord Mountbatten, who immediately became governor-general of the new Dominion of India, was rewarded with an earldom on his return to London for his part in "expertly managing" Britain's retreat from India.

VOICES OF INDIA

Interviews by Peter Popham

Patwant Singh, Sikh historian, based in Delhi:

I was 22 at the time of Partition. Our dreams were of a proud, free, republican India with a democracy, and the ghosts and demons left behind. But, 60 years on, the demons have taken the place of our dreams – religious bigotry, corruption, increasing polarisation in society. We say we are going to be a global power: it is now 6.20pm, and the electricity went off in the whole of Delhi at 4.10pm. We talk about a trip to the Moon, together with the Americans, but a poor man can't even afford to take a bicycle rickshaw to the hospital.

My new book, just published, is called The Second Partition, which is the polarisation between the 200 million with money and the 800 million below that. And the people at the bottom don't have a thing. That is the Second Partition. The Maoist-inspired Naxalite movement began as a movement of protest 40 years ago in West Bengal, but it has resurfaced and is now present in 14 out of 28 Indian states – desperation is driving people to violence, even in states that were highly prosperous, like Punjab, where more and more desperate farmers are committing suicide. Out of 12.5 million people in Delhi, five million are homeless: this is the reality on the ground.

Urvashi Butalia, author and publisher, founder of Kali for Women publishing house:

India and Pakistan have continued to rehearse the rhetoric of enmity for so long, we are still in the shadow of Partition. Until 10 or 15 years ago there was a tremendous reluctance to talk about the subject, and about people's personal histories of Partition. We tried to pretend they weren't there, because it was the dark side of Independence. But in the past 10 years people have begun to talk about it, and the same thing has happened across the border. It is helping us to deal with the hurt and move on. Because it forces us to recognise that there weren't bad guys and victims, that all of us were complicit in what happened.

I didn't realise until recently but my book, The Other Side of Silence , more than 70 interviews with survivors of Partition, acted as a catalyst for change and continues to do so. Both sides have convinced themselves that the violence came from the other side, but it's not so. It is most difficult to accept that it really came from you. You have to confront that so you can move on. It's easy for Hindus to say those Muslims killed our women but it's not that simple.

My family was from Lahore, now in Pakistan. Some of us had already moved before Partition but my mother's brother, who was aged 20, decided to stay behind and he kept my grandmother back. We all left but we didn't get compensation because we still had the house in Lahore. My uncle converted to Islam – he was not religious so to him it didn't matter, but he also forced my grandmother to convert and she was a very strong Hindu. She eventually died in 1956 and none of us ever heard from her after Partition. There was no family contact of any kind for 40 years.

Then in 1984 during the massacre of Sikhs that followed the assassination of Indira Gandhi I realised what Partition must have been like – I had known Delhi all my life but suddenly it became a different city and I was horrified. I took down the testimony of people who were applying for compensation and so many people said, 'It's like Partition,' and that was what made me want to find out more.

So in 1987 I crossed the border into Pakistan and went to my uncle's house. He was very warm and welcoming. He said he had never been able to talk to anyone about what had happened. And being a convert and living in the same place he was marginalised. But things have improved a lot in the past few years; slowly we are putting it behind us.

Ranbir Vohra, Indian historian:

I was working for All-India Radio just before Independence, based in Lahore. Most of the Hindu staff had already shifted to Delhi but the Muslim staff had yet to arrive, and for several days I and one or two others were running the station alone, getting it ready to prepare for Pakistan Day – the independence of Pakistan. One of our jobs was to go out and get some poems written, patriotically celebrating Pakistan Day – there were plenty of patriotic Indian poems but no Pakistan ones so we had to commission them, then they had to be set to music and sung for the radio. But all the Hindu and Sikh singers had already gone to Delhi so we had to go and find the professional singers, who were regarded more or less as courtesans to sing these new songs.

That was my contribution to Pakistani independence. But there was such confusion, nobody knew what was going on. I went from my home to the radio station passing dead bodies on the street, burning houses, by the time I finally left, a couple of days before independence, much of old Lahore was on fire. But you had to carry on.

INDIA: THE TIMELINE

1600: The British East India Company is granted a royal charter by Elizabeth I, giving it a trade monopoly.

1639: The British East India Company gains permission from local rulers to create a trading post in Madras.

1658: Aurangzeb becomes the ruler of the Mughal Empire. In his 49-year reign, he will conquer India as well as parts of what are now Afghanistan and Pakistan.

1661: The group of islands known as Bombay is handed over to British rule as part of a dowry for Charles II's wife.

1668: Bombay is leased to the British East India Company for £10 per annum.

1751: The capture and subsequent defence of Arcot in the Vellore district by Robert Clive and 500 men marks the turning point for the British Empire in its battle for control of India with the French.

1756: The Nawab Siraj-ud-Daulah, of Bengal, captures Calcutta and imprisons the surviving British in a prison that became known as the "Black Hole of Calcutta".

1757: The British East India Company defeat the French-supported Siraj-ud-Daulah of Bengal at the Battle of Plassey, giving the British control of the region.

1773: The British Parliament passes an Act that stresses its ultimate control over the British East India Company.

1803: Britain captures Delhi.

1806: In what some see as the first example of a mutiny against the British, Indian sepoys attack the British East India Company's garrison in Vellore.

1818: The British East India Company defeats the Maratha Empire.

1853: The first passenger railway in India opens between Bombay and Thane.

1858: The running of India is taken over by the British government after the failed Indian mutiny. It marks the end of the British East India Company's rule.

1869: Mahatma Gandhi is born.

1885: The Indian National Congress is created with the aim of gaining a larger role for Indians in the running of India.

1911: New Delhi is founded by the British and chosen to replace Calcutta as India's capital city.

1919: The Massacre of Amritsar occurs when British troops fire on unarmed Indian protesters.

1920: As a result of the massacre, Gandhi launches the peaceful Non-Cooperation Movement by calling for Indians to stop supporting British rule without resorting to violence.

1922: Gandhi is imprisoned by the British after he ends the Non-Cooperation Movement as it descends into violence.

1942: The Indian National Congress launches the Quit India Movement, which threatens the British government with civil disobedience unless they grant India independence.

1947: India gains independence as Britain withdraws and creates Pakistan as a separate state.

1947: War breaks out between India and Pakistan over the disputed territory of Kashmir.

1948: Mahatma Gandhi is assassinated in New Delhi by a Hindu fanatic.

1952: India's first general elections are comprehensively won by the Congress Party of India.

1962: Conflict between India and China over boundary disputes.

1965: Kashmir is again the cause of conflict between India and Pakistan before the UN intervenes.

1971: India and Pakistan go to war over the independence of Bangladesh.

1971: India signs a pact with the Soviet Union.

1974: India conducts its first nuclear test.

1975: The Indian Prime Minister, Indira Gandhi, is found guilty of electoral corruption but refuses to resign.

1984: The Gold Temple in Amritsar, being used as a refuge by Sikh separatists, is raided by the Indian army.

1984: Indira Gandhi, in her second spell as prime minister, is assassinated in New Delhi by her Sikh bodyguards.

1987: Indian troops are sent to Sri Lanka on a peacekeeping mission.

1988: Millions of Indians are displaced by floods.

1990: The Indian army withdraws from Sri Lanka.

1998: The international community condemns India after it conducts nuclear tests without warning.

2000: India's census commission announces that the population has reached one billion.

2001: More than 20,000 people are killed by an earthquake in the Indian province of Gujarat.

2001: America lifts sanctions on India and Pakistan put in place after nuclear testing.

2002: War between India and Pakistan looms as Pakistan responds to India's testing of nuclear-capable missiles with tests of its own.

2003: India and Pakistan agree a ceasefire in Kashmir.

2004: The Asian tsunami kills thousands in coastal areas.

2006: A bomb in Mumbai kills 187 train passengers; police blame Islamic militants based in Pakistan.

2007: A train from New Delhi to Lahore in Pakistan is bombed, killing 68; many were Pakistanis.
 
Consumerism’s final frontier
Western-style malls are the most conspicuous signs of a retail revolution that many believe will turn India into one of the next global superpowers

Ashling O’Connor reports from Bombay
From The Times

The Inorbit shopping centre in the northern suburbs of Bombay is like any you would find in the developed world. Teenagers in the latest fashions hang out on benches, swapping ring tones on their mobile phones and swigging soft drinks from cans. Parents nervously watch their children charge around in the play area while they sip frothy lattes before being dragged off to check out the latest must-have toy.

Three floors, topped by a multiplex cinema, offer a range of familiar western brands Marks & Spencer, Guess, Wrangler, Mothercare mixed in with local names such as Crossword and Shoppers’ Stop. It is a bustling, air-conditioned bubble of commerce. The difference for these shoppers compared with their peers beyond the Third World, however, is the sheer novelty of the experience. Even five years ago, nothing like this existed in India.

White-haired old ladies, wearing traditional saris, straddle the divide between this new retail world and the old one dominated by small family-owned shops often little more than a hole in the wall and open-air markets where goats and cattle wander between the stalls. Guzzling milkshakes in the modern food court alongside denim-clad grandchildren stuffing burgers into their mouths, India’s elder generation seems happy to have made the transition.

All around them, the US mall culture is being embraced. The largest queue in the eating area is not for the traditional Indian fare of dhosas and vada pav, but for Pizza Hut.

It is totally different from five or ten years ago when you had to go to shopping lanes or exclusive showrooms because there was no other option, Mukesh Agrawal, 25, a management student, says.

Wearing a Reebok shirt and trainers, Agrawal says he visits a shopping centre once or twice a week to hang out with friends or buy the latest sports brands. Most of the western brands are affordable, he says. People are becoming more stylish and coming closer to the concept of marketing.
India is undergoing a retail revolution. Spurred by a new brand of consumerism, social classes are being invented with each glass-fronted shopping centre that opens. An unprecedented generation of wealth, spurred by annual economic growth of more than 9 per cent a year, is rapidly moving millions of people up the standard-of-living ladder.

The result is an irreversible social and economic change that many believe will turn India, despite all its problems of poverty, religious friction and neglected infrastructure, into one of the next global superpowers. There is a tipping point when you reach a certain per-capita GDP like a hockey stick effect. We are not there yet. China is, says Anand Mahindra, one of India’s foremost industrialists. But we’re getting close. If we have two more years of 9 per cent growth, we are there. Untapped potential is the reason foreigners are itching to break into India, ranked for the past three years as the most attractive investment opportunity for mass-market and food retailers, according to the annual Global Retail Development Index from consultants A.T. Kearney.

What is happening in retail in India is quite unprecedented in the world, Paul Merrifield, national shopping centre development manager for Aditya Birla, one of India’s top conglomerates, says. The huge population base, combined with heady economic growth, seemingly insatiable aspirations, youth and a lack of existing shopping centre in-frastructure, can only create a unique and enormous potential.

It is still a highly regulated environment, however, in an effort to protect the small shop owner and domestic players. Only single-brand foreign retailers are allowed to operate in India, which explains why Calvin Klein, Guess and Mothercare are common sights. For the moment at least, multibrand operators such as Tesco and Wal-Mart must partner an Indian company.

Wal-Mart, the world’s biggest retailer, will enter the market next year through a joint venture with Bharti Enterprises, a conglomerate that owns India’s leading mobile phone network. The US giant, like all foreign companies, has been dazzled by India’s numbers. The most frequently quoted figure that sparks murmurs of excitement in the international investment community is the size of the country’s new middle class: 250 million more than four times the population of the UK.

The consensus in India, which has a population of 1.1 billion, is that this is not an overstatement. There are clearly 50 million households which are truly to my mind middle-class and there are about five members per family, so it’s a reliable number, Sunil Bharti Mittal, Bharti chairman and a self-made multi-billionaire from Punjab, says.

I’d say 25 million people are as far in terms of wealth as Europe. And 25 million is a nation in Europe. So you have one big European nation here consuming Louis Vuitton and Chanel and certainly 250 million people consuming more than the basic staple goods. The range is big.

McKinsey, the consultants, predicts that by 2025 India will be the world’s fifth largest consuming nation, surpassing Germany, with consumption rising fourfold to 70 trillion Indian rupees. Average real household disposable income will grow from 113,744 rupees in 2005 to 318,896 rupees, according to the firm.

Growth is driven by volume in India. On a per capita basis, it is still very modest by developed countries’ standards. But when you look at the fundamentals, we see dramatic changes ahead, Eric Beinhocker, senior fellow at the McKinsey Global Institute, says.

India’s next spurt of growth will be driven by its deep pool of young talent. More than half the population is under 25. Its collection of 14 million young professionals twice the number in both China and the US is topped up each year by two and a half million graduates.

With a severe talent supply crunch in a booming economy, the best have their pick of jobs. It is not unusual for young executives to have had five jobs in the three to four years since leaving university. And they are applying the same short-term thinking to their consuming habits.

The Indian consumer is very young and evolving very fast, Prashant Desai, head of new ventures for Pantaloon Retail, India’s leading retailer, says.
The trend is creating a new fast-living culture at odds with the staunchly conservative values of Indian society. Old Indians buried their rupees in watertight containers; new Indians are putting them into yachts.

A lot of people have made money and they want the lifestyle, so they are spending. It’s a statement, saying: I have arrived’, says Gautam Singhania, managing director of Raymond, India’s best-known tailor, who himself is not averse to flashing the cash commuting in his helicopter and throwing parties on his tri-deck luxury yacht. The younger generation is standing on its own two feet, not just taking pocket money until they get married. They are earning their own. They travel, need clothes and can buy a house and a car against their income. They want to do better than their parents did.

Like many Indian industrialists, Singhania believes the real societal shifts in India over the next few years will happen in the second-and third-tier cities. The big metropolises such as Delhi and Bombay are already well advanced saturated some might say to the point where top-level salaries and living costs are on a par with the developed world.

The small cities are where there will be the biggest changes, because the market has been neglected for so long. There is pent-up demand, he says. We recently opened a 10,000 sq ft store in Andheri (a Bombay surburb) and had sales of 150,000 rupees on day one. A 2,500 sq ft store in eastern India had opening day sales of 250,000 rupees. I know someone who went into a Rolls-Royce showroom and bought one on impulse on his way to buy a $250,000 stereo system. And he came from Indore [a city in central India famous for its forts, palaces and textiles].

Middle-income Indians in mid-sized cities have been unleashed not only by rising salaries and a strong rupee but the advent of consumer credit. If you were here in 2000, you would have seen very different consumer behaviour, V. Vaidyanathan, head of retail business at ICICI Bank, India’s largest loan provider, says. There was less willingness and propensity to consume. Loans were available only to the upper economic segment and the average consumer did not have the confidence to borrow. Things have changed.

Now people can see their own cashflow and [borrowing] has become easy. Finance companies are rushing to give money. India is already Visa’s largest market for debit cards in Asia, with 34 million customers last year. Barclaycard this year launched three credit cards in India.

There is an emerging middle class [who are borrowing] in a country where people have a stable income stream and want to buy big-ticket items and spread their payments, Anthony Jenkins, Barclaycard chief executive, says. Credit cards always start off as a high-end product. We are clearly past that stage in India. We are starting to see mass-market growth. The upside is huge. India, as a country, is still hugely underleveraged: borrowings account for only about 10 per cent of GDP, compared with 35 per cent in southeast Asian countries. The average loan value in India is just one seventh of that in the developed world. Most of India’s 600 million-strong rural population does not even have a bank account.

But the changes afoot are tangible. India, traditionally a nation of savers, is becoming a nation of spenders. The best indicator is the mobile phone market, the fastest-growing in the world with six million new subscribers a month. There are estimated to be 165 million in the country today and this number is projected to grow to between 500 million and 600 million by 2011, as first-time phone owners skip the fixed-line step to communication.

Mobile phones are not the preserve of the rich. Taxi drivers, maids, fruit-sellers and street hawkers all have them, lured by local tariffs of one rupee a minute and handsets costing as little as £20.

We are seeing India transforming and it feels good to be part of it. The real take-off has happened in the last four or five years. India is creating more jobs and that’s created a larger middle class, Uday Kotak, managing director of Kotak Mahindra, India’s third-largest commercial bank, says.

By 2010, there will be 580 million consumers in the key 15 to 44 age bracket in India, according to CLSA, the brokers. China will have 665 million. The test for India, a messy democracy versus a neat, capitalist autocracy, is to make sure a large proportion of the 600 million people still dependent on agriculture for a living are also invited along for the ride. That is one of the biggest challenges for India to ensure more inclusive growth, Kotak says. If we can create jobs, it will be.

The prosperity of mid-tier cities, which act as a bridge to rural India, is key. Without a fairer distribution of India’s new-found wealth, the rich will only get richer and an explosion of social tension lies ahead as the poor are left outside the doors of plush department stores, resentfully eyeing the goodies in the arms of their luckier compatriots.

A holiday paradise
Historian Michael Woods on his 20-year love affair with India
Experts’ choice of top hotels
Where to find the best curries
How to meet a maharajah
Ganges whitewater rafting
Dance like a Bollywood star
 
Tomorrow's World Power Turns 60
By Mathieu von Rohr
Spiegel Online, Germany

It's been 60 years since India won its independence and the country of Mahatma Gandhi is now on track to becoming a global power. But the country's new prosperity remains elusive for many, with millions of farmers still leading lives of abject misery. SPIEGEL visits five very different places to see what India's future holds.

The Republic of India was only four hours old when an untouchable, a girl named Shyama, came into the world in Gurgaon, a village near Delhi. She was born at 4 a.m. on August 15, 1947, in a simple brick house, the third of seven children.

Shyama's mother later told her about the fireworks and the street celebrations that night, and about the historic words of India's first prime minister, Jawaharlal Nehru: "At the stroke of midnight hour, when the world sleeps, India will awake to life and freedom." But one man, Mahatma Gandhi, the father of the Indian nation, was not celebrating that night -- because millions of people were still starving and because independence also meant partition of the former British India into two countries, India and Pakistan. Instead, Gandhi stayed at home and fasted.

Find out how you can reprint this DER SPIEGEL article in your publication. The family that Shyama was born into that night was not among India's poorest. Her father was a low-ranking civil servant. But they were pariahs, members of the Jatav subcaste. Their ancestors had been leather workers, which made them unclean, placing them at society's lowest rung. Not even their shadows were permitted to touch a Brahmin.

An untouchable, a man named Dr. Bhimrao Ramji Ambedkar, had written much of the new country's constitution. It was designed to create a country in which all citizens would have equal opportunities. "If things go wrong under the new constitution, the reason will not be that we had a bad constitution ," said Ambedkar, "What we will have to say is that man was vile."

Over the course of the country's history since independence, it periodically seemed that things would indeed go wrong. But now that the Republic of India is turning 60 on Aug. 15, the world no longer mentions the country in the same breath as tales of poverty and hopelessness. Today's stories about India are tales of success.

The legacy of the 1947 partition can still be felt in India, especially in disputed Kashmir.

Shyama was a good student, one of six girls to attend the local college in Gurgaon. She loved to dance and wanted to become a film star. But the other students shunned her. Their families were from the affluent Jat caste of farmers, and they routinely disparaged her as an untouchable and called her even worse names, which she later did her best to forget. Shyama swore to herself that she would be a great success in life. When she was 16 she assumed a new last name so that people could longer tell what her caste was. Because she was born on the same day as India, she called herself Shyama Bharti -- Shyama, the Indian. "I abandoned my name to abandon my caste," she says.

Like the country, Shyama is now almost 60, but she looks younger. She sits in her office in downtown Delhi, wearing a pink sari. She has large, dark eyes and a narrow nose with wide nostrils that makes her look almost aristocratic. She wears her dyed black hair piled up on her head in a hairstyle similar to the one favored by her idol, Indira Gandhi, India's third prime minister.

As a general director of Delhi Transco Limited, the city's electric utility, Bharti is at the highest level she can be promoted to in her career as a civil servant. She has four telephones on her desk, and her business card reveals that she has four university degrees. "As far as education goes, I'm a Brahmin," she says, laughing.

She earns 42,000 rupees, or €760, a month. Her husband receives a government pension. The couple is provided with a driver and a car, a company mobile phone and a large house with servants. The Indian state treats its civil servants well.

Shyama Bharti managed to complete her ascent into the upper middle class long before today's new generation of social climbers, who make their money as call center agents and IT specialists, came on the scene. About 200 million of India's 1.1 billion people are already part of the middle class today, a number that is expected to increase to about 600 million by 2025 -- figures that are enough to make investors delirious.

Shyama Bharati, seen here in her Delhi office, was born on the day India got its independence.

The West has long realized that India is on its way to becoming a global power. The giant country is expected to be the world's third-largest economy within the next three decades. India and the United States signed a joint nuclear treaty only two weeks ago. India has been de facto accepted as a nuclear power, and its next goal is a permanent seat on the United Nations Security Council. The country's elites are literally bursting with self-confidence.

Indians who read newspapers can marvel at the daily stories of progress in their country, and of its rise to prominence. India launches an Israeli spy satellite into space. Indian automakers plan to acquire Jaguar. Free wireless Internet in all of Bangalore. Domestic flights doubled in the space of two years. Bank accounts opened for each and every resident of the state of Himachal Pradesh.

At the same time, India's infrastructure remains a problem. Its roads, buses and airports are in a woeful state of disrepair, and power outages are common.

A trip through India is a lesson in glaring contrasts. India is a land of the future, and yet parts of it are still a long way from the present. It is a country of the fabulously rich and the desperately poor, of Hindus and Muslims, wooden plows and nuclear power plants.

Shyama Bharti will go into retirement on Aug. 15, her 60th birthday. She and her husband will move to her old village, Gurgaon, which has since been engulfed by Delhi's southwestern suburbs. The land the couple bought there 20 years ago is worth at least 100 times what it cost them to buy.

Part 2: A Land of Contrasts

GURGAON: 'It Will Be Singapore in Five Years'

Ashish Gupta sits in a glass booth on the second floor of a salmon-colored, semi-circular office tower in Sector 39 of Gurgaon, and says: "It will be Singapore out there in five years." Today there are still meadows out there, and cows still routinely stroll across the street, holding up traffic. But Gupta is quite serious.

The India of the future is emerging in Gurgaon. Where there was once nothing but brush, now glass and concrete towers are being built to house the offices of Western conglomerates like Siemens, Alcatel and Microsoft. The construction workers live in tents between the buildings. An eight-lane highway cuts through what is still a no man's land, with constant traffic jams lining up in front of half a dozen new shopping malls. A subway is being built to downtown Delhi.

Gupta wears black trousers, a blue shirt and a tie. He attended college in the United States and once worked for corporate consulting giant McKinsey. He is the Chief Operating Officer of a company called Evalueserve. His job is stressful and he is sweating profusely, despite the air-conditioning in his office. The company has 2,100 employees and has only been in business for the past six and a half years. It grew by 100 percent each year in the first four years, and another 75 percent in the interim. Evalueserve is in the process of expanding into China, Chile and Eastern Europe. Gupta's sentences are sober enough, and yet he sounds almost intoxicated: "The question is not how big we want to become, but how big we can become. Theoretically, there is no limit."

Evalueserve is a showpiece company in the new India. While China is growing through low-cost industrial products, India in growing through cheap services: call centers to serve customers in Ohio, IT specialists handling the programming for European clients and market research companies such as Evalueserve that perform tasks like analyzing the shampoo sales of their clients' competitors.

According to Gupta, there is absolutely no doubt that India is becoming a global power. "We need another 20 years, but they'll fly by."

The Indian economic miracle began in 1991, when Ashish Gupta was still a student. Manmohan Singh, the finance minister at the time and India's prime minister today, jettisoned the "democratic socialism" of the country's founding fathers. Until he came into office, large sectors of Indian industry were still state-owned. Singh began privatizing companies and liberalizing markets. The IT industry has been booming since the late 1990s, and the economy as a whole has grown by an average of 8 percent a year in the last five years.

At Evalueserve more than 100 people, most of them under 30, work in a single room, sitting at long rows of yellow desks and staring at computer screens. One of them is Senior Analyst Andrea Demsic, a 30-year-old blonde with cherubic cheeks and a contented smile, who works in the company's Business Research department. She comes from the southwestern German town of Schwäbisch-Gmünd and speaks the Swabian dialect. After earning a degree in economics from the University of Jena in eastern Germany, she says, it was relatively difficult to find a job in Germany. One day she saw a job posting at her local employment office: Seeking analyst for overseas position. She applied for the position and, a year and a half ago, ended up in Gurgaon.

Demsic's starting salary was 21,000 rupees, or about €380, plus a free apartment. She was promoted after the first year. She says that she could imagine staying in India for a while longer.

She is impressed by the ambition of her Indian coworkers, and by the city being built around her. "There is movement here. Everyone wants to achieve something. There are opportunities to climb up the corporate ladder in India. It's so different from Germany."

Thirty-six foreigners work at Evalueserve, and their numbers are also increasing in other Indian companies. Ashish Gupta, the COO, smiles. He needs people who know Europe and speak its languages perfectly, because his customers come from Europe. But he is also happy with the message he is sending to the world: Instead of hiring exclusively Indians to work for the West, Indian companies are now also creating jobs for Western workers.

VIDARBHA: 'They Build Cities and Neglect the Villages'

His wife and two sons were sound asleep when Punjaram Kubde, a farmer, got up in the night and went into the next room, where he kept sacks of seed, fertilizer and poison. He poured himself a cup of pesticide and drank it. His wife found him dead on the stone floor the next morning.

Now his body lies underneath a pile of wood that the men and women of Chondha have assembled on a green hill in front of the village. They have painted his face purple, brought him flowers, rice and coins for his journey into the next world, and wrapped his body in a white sheet.

About 200 people have come to attend his cremation. Their faces are serious. Kubde's is the first case of a farmer taking his life in their village. Some say that if it doesn't rain soon his suicide will not have been the last.

Chondha is in Vidarbha, in the middle of India and one of the country's poorest regions. This year alone, 521 farmers have already killed themselves in Vidarbha. Last year there were more than 1,200 suicides. Almost all of the men used pesticides, while a few set themselves on fire.

The wife of the dead farmer sobs quietly, her body trembling. Her name is Lalita and she is wearing the orange sari she reserves for special occasions. She is only 30, young and beautiful, but she will remain a widow for the rest of her life. Village rules forbid widows from remarrying. Sagar, the couple's eldest son, is 10. A man helps him hold a burning bundle of straw, which he must use to ignite the funeral pyre. Then the men and women of Chondha walk around the fire, throwing in sticks.

Punjaram Kubde was an important man. He owned 12 hectares (30 acres) of land, a large house and a motorcycle. He was 45, a powerful man with a mustache and, like most men here, he was a cotton farmer. He grew a strain known as "Bt cotton," developed by US agricultural chemicals giant Monsanto. According to the farmers in the village, conventional seeds are unavailable these days. No one knows why, but the dealers no longer sell it. Monsanto's genetically modified seed is expensive and a new supply has to be purchased every year. The seed makes up half of the farmers' production costs. Even worse, if Bt cotton gets too much or too little water, it reacts far more sensitively than normal cotton.

When last year's heavy rains ruined his harvest, Kubde was unable to repay his bank loans, and the banks refused to lend him more money. He went to private moneylenders, who lent him the money he needed for new seed, but this year brought more heavy rains and Kubde lost his crop once again. In the end he owed half a million rupees and no one was willing to lend him any more money.

Unable to liberate himself from his mountain of debt, he would have been forced to become an indentured servant to his creditors. He chose an easier way out.

The man who counts the region's dead is named Kishor Tiwari. A former engineer, Tiwari founded his own NGO in the small city of Pandharkawada, where he now has his office. He spends his days sending out e-mails filled with accusations and numbers. More than 6,000 farmers have already committed suicide in Vidarbha, he writes, and more than 2 million farmers are in debt. Tiwari reports the news from an India that has nothing to do with the country analysts are touting these days.

About two-thirds of Indians today are still farmers, a number that puts many things in perspective. They live in villages that consist of a handful of tiny mud huts, each containing a sleeping room, a second room for the kitchen and an outdoor latrine. The muddy paths between the huts are littered with cow dung.

More than 300 million Indians live in poverty and 400 million are illiterate. In many parts of India, dependent feudal relationships still exist, women and untouchables are oppressed, there are honor killings and the practice of setting widows on fire is still not entirely abolished.

Kishor Tiwari is a cantankerous man wearing polished shoes, black trousers and a white shirt. He has himself driven through the area in a car with a sign in the front window that reads: "God has sent this man to the poor."

He sits in the back of his car as it bumps across a street filled with potholes, blaming the liberalization of the agricultural market for the farmers' troubles. First, he says, the government almost stopped buying up cotton altogether, and then it permitted the importation of cotton and genetically modified seed. The end result was a plunge in the price of cotton.

He talks about Mahatma Gandhi, who founded his village commune Sevagram Ashram in 1936, not far from here. Tiwari says that Gandhi's successors have betrayed him. "They build cities and neglect the villages. For Gandhi the village, which is self-sufficient, was the pillar on which this country stands. Instead we now have the enslaved village."
According to Tiwari, the same liberalization that is driving India's growth is breaking the farmers' backs.

Part 3: The Scars of Partition

MUMBAI: 'Within Half an Hour I Would Have Enough Muslims Here Ready to Fight'

The city of Mumbai, formerly known as Bombay, is home to some of the poorest of India's poor. More than half of its residents live in poor neighborhoods like Dharavi, Asia's second-largest slum, which investors have targeted to be converted into a modern residential development.

Mumbai is also home to India's wealthiest citizens. Most of the country's billionaires live here, such as the Ambani brothers, whose father, a former merchant, worked his way up the ladder to earn his billions. Another is Anand Mahindra, who dreams of dominating Europe with the SUVs his company makes.

Mumbai is also Bollywood. The city's film industry produces hundreds of movies each year, productions full of saccharine music and starring actors who are paid millions.

The careers of most Bollywood stars are short-lived, with only a handful becoming legends. The most unforgettable star of them all lives in a villa in the Cumballa Hill neighborhood in Bombay's Midtown district: Dilip Kumar, the first and probably greatest star Indian cinema has ever had.

He stands in the foyer of his villa, dressed entirely in white, holding up a palette and a paintbrush. Surrounded by a dozen photographers and jostling cameraman, Kuman remains unperturbed. Saira Banu, his wife, stands next to him and Jatin Das, a well-known artist. The trio is producing a charity painting for Bombay's street children.

Dilip Kumar is 84. Born in Peshawar in what is now Pakistan, he comes from a Pashtun family of 12 children. His real name is Mohammed Yusuf Khan, but it sounded too Muslim for him to become a star. He has trouble remembering the old days. When asked about 1947, the year of independence and partition, the first thing he remembers is playing football with the British. Then he recalls images of horror and death and the massacres that followed independence, and his three cousins who were killed in the unrest. The old man's eyes fill with tears. Then he says: "It was very eventful."

Partition brought horrific massacres. Already in 1946, the year before partition, militant Hindus, Muslims and Sikhs were fighting each other, and when the British announced the borders for the future countries of India and Pakistan, 10 million refugees left their homes, attempting to reach the right side. Many never made it. A Muslim mob butchered a train filled with refugees in the Punjab, Hindus destroyed hundreds of mosques and Sikhs murdered Muslims with axes. Millions died. India and Pakistan were born out of a bloodbath.

Dilip Kumar has spent much of his life campaigning for reconciliation between the two countries and has even been decorated for his efforts. But now, in his old age, it is all coming back to him. He says: "If it ever happened again, within half an hour I would have enough Muslims here who would be ready to fight."

Kumar sits in his armchair like some emperor in the waning days of his life, a glittering dome above his head. A painting on the opposite wall depicts him in his role as Bollywood's great romantic star, posing with his hand outstretched. The old man stares into space and says that he misses Peshawar and occasionally goes to the mosque.

KASHMIR: 'I Am Afraid of Everything'

The wound of partition has never properly healed in India. Here, in Kashmir, it is still wide open.

Dal Lake sparkles in the sunlight against a backdrop of the green slopes of the Pir Pinjal Mountains. Srinagar, the capital of Kashmir, is a magnificent place -- but is also one of the world's most dangerous.

Two nuclear powers, India and Pakistan, are confronting each other up here, both laying claim to predominantly Muslim Kashmir. China also occupies part of the region. Kashmir is probably the world's most heavily militarized zone. There are 500,000 troops stationed on the Indian side, along with paramilitary forces, police and intelligence agents.

And all this is just because the Maharaja of Jammu and Kashmir, flirting with independence, hesitated to choose a side in the year of partition. Pakistan sent guerilla troops, the Maharaja called for help from India, and a cease-fire line has separated the armies of the two countries ever since.

Despite frictions, Kashmir was long a dream destination for tourists, until a guerilla war of independence, supported by Pakistan, erupted in 1990. Today the region is a war zone, devastated and lacking an economy or infrastructure. But things have quieted down in recent years, as the militants have scaled back their attacks. Is there reason for hope in Kashmir?

The Mirwaiz of Kashmir, Omar Farooq, is the religious leader of Kashmir's Muslims and one of the province's best-known politicians. He lives in a dusty pink house in downtown Srinagar, where a dozen bearded men with guns sit in the entranceway. Farooq, who is only 34, wears a beard and designer glasses, and is currently doing a PhD on Sufism at the University of Srinagar.

What is he afraid of? Farooq's answer can be summed up in one word: Everything. On the one hand, there are the militant groups that murdered his father 17 years ago, so that he was only a teenager when he became his successor. On the other hand, there are the Indians, who also cannot be trusted.

Farooq is a young, intelligent man, but he has already internalized this conflict so much that it seems as if he has been dealing with it for the past 60 years. He is considered a moderate, one of those who want to negotiate with the Indian government. The Indian prime minister recently proposed that the line of control be turned into a "line of peace" between the two countries. There is a proposition for some kind of joint administration of Kashmir by India and Pakistan.

The Mirwaiz is in favor of these efforts, but he is frustrated because there is, in fact, little progress. He believes that it is high time that Delhi do something to back up its declared intentions. Indian newspapers write that Kashmir is faring better than ever, and that its economy is booming. The Mirwaiz smiles sadly. Kashmir is a place that makes people melancholy.

DELHI: 'We Aren't the Only Ones Doing Well'

Shyama Bharti, who was born on Aug. 15, 1947, is sometimes astonished over how much her country has changed. "When I was a little girl India was dominated by the rural population, and the farmers couldn't read and were superstitious," she says, "but now even their standard of living is rising. People are educated and they know their rights and duties."

In those days, says Bharti, her family's house was furnished with only one bed, three blankets, a few chairs and a transistor radio. "Nowadays we have air-conditioning everywhere and everything is fully furnished, and we aren't the only ones who are doing well." Every morning and every evening, Bharti goes to the small altar room behind her kitchen to give thanks to Ganesha, the elephant god.

On weekends Bharti visits her poor relatives, where she is treated like a guest of honor. She tells them that women should fight for their rights and their careers. Sometimes she gives them money. She is thinking about going into politics after she retires. She says that the country gave her a lot, and that it's now her turn to give something back.

She is immensely proud of her sons. The older one has also chosen a career in the civil service, and was accepted into the prestigious Indian Administrative Service, which accepts no more than 300 applicants each year. When his appointment was announced in the newspaper, Bharti and her husband were inundated -- to her delight -- with offers of brides for him. But what about love? "Indians aren't fond of love marriages," says Bharti, "They prefer arranged marriages. It's safer." Her marriage was also arranged.

India's traditions are not disappearing with its economic boom. Indeed, newspapers are reporting a new trend: Middle class families going into financial ruin to come up with dowries for their daughters.

Did the family of her son's bride pay her a dowry? "We did not take one," she says. "Only greedy people do that."

Bharti and her husband selected a pretty girl for their son. She is a senior civil servant, an intelligent woman.

Is she from the same caste? "Of course!" says Shyama Bharti.

SPIEGEL traveled to five different parts of India to get a glimpse of the country's future.
 
Sixty years on, independent India is booming
Easier, UK
9 August 2007

60 years of independence next week Sam Mahtani, manager of F&C's top performing Indian Investment Company, believes the structural story underpinning the country's growing prosperity will continue.

India has delivered four successive years of above 8% growth, and is the world's second fastest growing economy after China. Mahtani says India's success story has been the result of a combination of changing perceptions and governmental reforms. Although growth is likely to moderate, the outlook for the Subcontinent is very strong led by growing domestic demand.

"In the decades following independence, growth remained at around 5%. But the government's decision in the 1990's to proactively target growth by aggressively cutting interest rates coupled with the introduction of several key reforms - including the privatisation of major industries such as telecoms and utilities, cutting red tape and improving the mechanisms for foreign direct investment - have improved efficiency in the economy and injected a large dose of liquidity into the Indian financial market. India is now seen on an equal footing to China," he said.

The Indian stock market has grown by 51.8% on an annualised basis for the past three years in US dollar terms. Mahtani says that although earnings are likely to slow to around 15% by the end of 2007, the outlook remains healthy for the long term investor.

"Although company valuations are quite high at 18 times forward earnings, the government's commitment to infrastructure spending and an increase in foreign direct investment should continue to support the economy and the markets. Equally, GDP growth remains healthy although the recent rises in interest rates should see economic growth moderate to 7-8% per annum over the next few years," he said.

The Indian Investment Company – a SICAV fund - is top percentile in the India equity sector over three years. Mahtani, who retook management of the fund in May 2004, said his long-term thematic approach had lent itself well to the fund's robust performance.

"With a governmental commitment of some $300bn to infrastructure spending over the next five years, we have found great opportunities among companies such as BHEL, the monopoly producer of power plants, which stands to benefit from its exposure to this theme.

"Mobile telecoms is another area where we see an explosion of growth. With only a 14% national penetration rate in India, mobile operators such as Reliance Communications and Bharti Airtel have a great chance to grow their customer base," said Mahtani.

According to Mahtani, the industry estimates that some 6 million subscribers are added each month and rural areas, where the penetration rate is even lower at just 2% present the most potential.

"As India's rural populous becomes more affluent, past experience has proved that the one of first items a consumer is likely to purchase is a mobile phone."

Other themes being played in the portfolio are cement, petrochemicals and refining. Demand for cement is likely to rise in line with the increase in infrastructure spending and India's strong growth is boosting demand for energy and petrochemicals as well.

"In the area of cement, we like the largest cement producer in the country, Grasim Industries, which has operations nationwide, and Reliance Industries, which is the largest private sector company in India and is a core holding in our fund and a bell weather for the petrochemicals and refining industry," concluded Mahtani.
 
Gandhi's hand looms over India's surging economy
By Alistair Scrutton
Reuters, UK
Fri Aug 10, 2007 2:45AM EDT

When Tata Steel bought an Anglo-Dutch competitor this year for $12 billion, the newspaper headline "Empire Strikes Back" symbolized how far India's economy had come in the 60 years since independence.

The aggressive foreign grab by a private Indian firm was a far cry from the image of a simple village handloom used by Mahatma Gandhi in India's fight against British imperialism and his campaign for economic self-sufficiency, or "Swadeshi".

Then, Indians felt self-rule was about economic survival as British competition sucked the life out of local industries. Life expectancy was around 30 years, famine an ever-present threat.

Now, India's capitalist kingpins are on a global buying spree, from snapping up Scottish whisky distillers to eyeing the purchase from Ford of the luxury Jaguar car brand.

Westerners fret about losing their jobs to India's cheap, educated professionals.

"These 60 years have been a trying period," said T.K. Bhaumik, chief economist at Reliance Industries Ltd., India's most valuable company.
"We have faced several calamities but we have created a middle class, a new entrepreneurial class and now young Indians are managing global firms."

But, despite the successes, the shadow of independence -- whether bucolic Swadeshi or the later Soviet-inspired socialist protectionism of India's first prime minister, Jawaharlal Nehru -- still hovers over "shining" India.

India's policy-makers, many born before 1947 and imbued with the ideals of the founding fathers, have been cautious about opening up the economy further, slow to build on market reforms that began in 1991.

For critics, they are still too often distrustful of foreign investment and continue to feed off a corrupt government apparatus that twisted the ideals of Nehru's state socialism and threatens modernizing reforms.

"Here, it is fashionable to be anti-reform," said Surjit Bhalla, head of Oxus Research and Investments.

India's fragile coalitions, often backed by powerful regional and caste-based parties, are often unable to push through big-bang reforms for fear of losing mass support.

YOU CAN'T SELL THAT HERE

For sure, foreign investors face challenges.

Take two global giants, the U.S. retailer Wal-Mart and British-based telecoms player Vodafone.

India's $350 billion retail sector is dominated by small neighborhood stores, and the ruling Congress party, which heads a fractious centre-left coalition, is grappling with how to ease the entry of corporates without throwing millions out of work.

Wal-Mart, which has signed a wholesale deal with India's Bharti Enterprises, has been caught in the middle and has faced street protests.

Vodafone Chief Executive Arun Sarin said this year his hopes that India's bureaucracy had changed were shaken by moves to derail his company's $11 billion takeover of telecoms firm Hutchison Essar.

"The billionaire losers' club was trying to unwind the deal," he said. "What I didn't count on was that the bureaucracy would kick in with this kind of evil spirit from our competitors who had lost."

Sarin later said his remarks were aimed at "vested interests" who had tried to scupper the deal.

There is no doubting the successes of independence. According to one estimate, India has pulled a population equivalent to that of Western Europe out of poverty since 1947.

It now exports food, doctors and vaccines to the West.

Decades of "Hindu rates" of low single-digit growth have given way to record economic expansion. India's 50 million-strong middle class could expand ten-fold by 2025, consultancy firm McKinsey says.

"There were two spurts of reforms -- one from 1991-1993 and another from 1998 to 2004," said Arun Shourie, a former minister in a coalition led by Hindu nationalists, which was voted out in 2004 after running a stridently pro-reform campaign.

"These two reform periods created enough elbow room for the private enterprises and middle-class to grow," Shourie, a former World Bank economist and newspaper editor, said.

NO TIME TO LOSE

But if India is to truly free itself from the past, then it has to put its people first: education and health care in South Asia rank only above those of sub-Saharan Africa, a report by the Asian Development Bank said.

There are growing income gaps, especially between urban elites and the two-thirds of Indians who live in villages.

"This is an issue about which we started talking even before we acquired our independence," said former 1990s finance minister Yashwant Sinha.

"India is growing at 9 percent, 10 percent. On the other hand these basic necessities of life are not being adequately delivered and the old debate between growth and development has become very real."

For many, the government has a Jekyll and Hyde character, capable of firing rockets into space but incapable when bureaucrats halt social projects because they disagree on what color pen -- red or green -- must be used to sign memos.

That needs to change fast.

"You in the West have had the luxury of time and started off hundreds of years before us," said Sheila Dikshit, chief minister of New Delhi. "We haven't got the luxury of time."
 
The story of India and me
From the high Himalayas to the Tamil south; our correspondent celebrates a 20-year love affair

Michael Wood
From The Times
August 11, 2007

A conversation with a stranger on a slow train – 36 hours through Ratlam and Indore up to Ajmer – started my love affair with India, one that has gone on for the past two decades.

During a midnight stop, while sitting on the steps enjoying the cool night air, I began chatting to a travelling salesman from a chemicals firm. The giant fortress of Chittorgarh stood ghostly pale in the darkness, and my companion regaled me with terrible tales of its past: of Rajputs and Moguls, sieges and battles, heroic deaths and mass suicides – all the epic drama and romance of Indian history.

“But if you really want to see something,” he said, “you should go south, to Madurai.”

So I made my way down the west coast and took the old steamer to Goa, and on to Cochin. A few days later I took the train that winds over the wooded hills of the Western Ghats. It was night before we reached Madurai, where I made my way through darkened streets past sleeping rickshawmen. Soon the huge temple gateways soared above me, disappearing into the night, their crowded storeys teeming with sculptures of gods and goddesses, garish as a Hindu Disneyland. Inside, I entered a dark labyrinth: giant corridors whose granite pillars were carved into monstrous snapping demons and dragons. The architecture was different from anything I had ever seen. With a flurry of drums and squeal of trumpets, white-clad priests scurried past with a golden palanquin. It was as if the ancient world was still alive.

I stayed a few days, watching the crowds pour in from dawn till dusk to celebrate the patron of the city, the fish-eyed goddess Meenakshi. Access to the inner shrine is restricted to Hindus. But the second night one of the priests came over and asked if I wanted to see the goddess.

That night I experienced the ancient rituals of the Tamil world for the first time: the statue of the goddess, the music of nadeswaram (reedy Tamil trumpet) and drums, the scent of ghee, jasmine and incense, the tinkling temple bells, the sacred flame gilding the faces of the devotees who went into the “womb chamber”, as the goddess shrine is called. Coming from industrial Manchester, I had never seen such things. Those smells and images have stayed with me and sum up my fascination with this wonderful country.

More than 20 years later, and after almost 30 visits, the magic has never failed. My wife, Rebecca, and I fell in love there, first travelled together there, were married there, and have taken our children back time and again to meet our friends. India has a special place in our hearts.
The country has changed considerably. The economy, which after independence 60 years ago was all about nonalignment and self-sufficiency, is now booming.

One of the great powers in history is returning – and not just in Delhi or Bombay, where shopping malls and condominiums are proliferating and property is more expensive than London. Even in smalltown Tamil Nadu, where we have stayed off the beaten track with our kids, you see the signs everywhere: the wide processional street around the temple has been surfaced, shiny retirement homes for devotees are going up, and there are new hotels with air-conditioning, satellite TV and internet. It’s a far cry from my early days travelling in the country, when we would have to make a booking at the telegraph office to phone home at Christmas.
The impact of tourism hasn’t always been good, however. The biggest shock was returning recently to Jaisalmer, which I had first visited at new year 1987. The golden city that I remember rising out of a scrubby desert behind a nomad encampment now is completely surrounded by hotels, shops and tourist offices selling Rajasthani camel tours. The interior of the city, one of the jewels of northern India, is almost entirely given over to travellers with hotels, cafés and boutiques. Some of the buildings may be beautiful, but to my mind the development has blighted the magical setting of the city.

Coming here recently to film The Story of India has made me appreciate the country even more. The wonderful variety of landscapes and cultures never fails to amaze me: the Buddhist sites of Leh and Ladakh, the Gonds of Orissa, near the magical lake at Chilika; Kerala, where you can rub shoulders with Syrian Christians, Indian Jews and Muslim boat-builders, who still ply the spice trade to the Gulf in their great wooden sailing boats.

On the east coast I love the old French town of Pondicherry, where the boulangerie sells fresh baguettes and the policemen still wear the képi. Up north, we have journeyed to the Himalayas, with magnificent treks around Amarnath, Gangotri, and Badrinath, up to the mountain passes into Tibet. Down in the plains, I still find Varanasi inexhaustibly fascinating.

Despite all the undoubted attractions of Rajasthan, Mogul Delhi and Agra, if I had to choose a favourite part of India, it would be the south: the world’s last classical civilisation. Here you can touch on India’s oldest living traditions in music, dance and literature. The giant temple cities take your breath away: Madurai, “Trichy” (Tiruchchirappalli), Thanjavur and Chidambaram. The Tamils are welcoming; they love their culture and live without the frenetic rush of the north; comfortable in the global age, yet still existing in sacred time.

We travelled here when our children were young, and they loved the life and colour, and the friendliness. India is a great place to travel with youngsters: our younger daughter has never forgotten how, aged 5, she fed bananas to the temple elephant at a festival in Chidambaram, and the mahout sat her on the animal and walked her around the courtyard to the delight of the pilgrims.

Many of my friends think you shouldn’t travel around India with kids, but my experience is that you just need to follow certain basic health rules.

Otherwise, the only problem can sometimes be the huge and rather sweet interest that foreign children generate. A few years ago, we took ours out of school and went with Indian friends to the Kumba Mela festival on the Ganges, where we stayed in a tent among millions of pilgrims. Wherever we went, people wanted to touch the girls and be photographed with them.

When I returned to Chidambaram a few months ago with the film crew, staff at the hotel Saradha Ram still enthusiastically asked after my daughters. The girls have stayed there three times, and as you can imagine, two blonde North London youngsters caused great excitement among the well-mannered Tamil boys who do the small jobs around the hotel.

There is so much to see in India that you would need several lifetimes – no wonder the Indians believe in rebirth. People tell me that I must be tired of the country after a dozen visits in the past 18 months, some of them long and gruelling journeys. But the opposite is true. I have come to love India and admire its people even more. To paraphrase Dr Johnson, if one is tired of India, one is tired of life.
 
India comes of age, as it looks set to topple US
Patrick Collinson discovers rich pickings for canny fund investors as India's economic revolution continues
Saturday August 11, 2007
The Guardian, UK

As India celebrates 60 years of independence on Wednesday, what of the investors who tip-toed into the fast-developing country's stock market? India funds run by Fidelity F&C, Aberdeen and JP Morgan Fleming have, over the past three years, produced annualised returns of around 35%-50%, defying the sceptics who have long predicted a meltdown on the Mumbai market.

Despite a series of interest rate hikes to head off rising inflation, economic growth in India has remained robust. In the current financial year, the economy is expected to expand by a frenetic 9.4%, the second highest in the world after China.

Earlier this year, Goldman Sachs raised its forecast for India's sustainable rate of economic growth from 5.7% to 8% a year - and said it is likely to continue at this pace to 2020.

By 2050 it says the US economy will have fallen to third place in the world pecking order - eclipsed first by China and then by India.

A country once known as a byword for poverty, malnutrition and stagnation has a new set of icons; Bangalore's software industry, Hyderabad's "Cyberabad", Mumbai's skyscrapers and Bollywood's stars.

In 2000 there were just 3m mobile phones in India. Today the country is adding 6m new subscribers every month - a rate of growth that beats even China.

But behind the gleaming shopping malls and the surging middle-class, there remains colossal deprivation. Around 300 million Indians survive on less than 50p a day and nearly three million children die every year from malnutrition.

Even the better-off can't insulate themselves from the country's growing pains; during 45°c heatwaves, the Indian capital Delhi can be hit by power cuts lasting up to 12 hours a day.

For fund manager Sam Mahtani, of F&C's Indian Investment Company, solving these problems is where his fund - minimum investment £2,500 - is going to make money in the future.

"There has been a marked change in government policy towards infrastructure spending. It says it is going to spend $300bn over the next five years, which compares with just $5bn-$6bn a year in the past few years." His favourite stock is Bharat Heavy Electricals (BHEL), an engineering giant which has just won a 29bn rupee (£350m) contract to build three new power plants to supply the Delhi grid.

"Under the Rajiv Ghandi programme, the government is planning to connect all India's rural areas to the grid, and BHEL will be one of the key beneficiaries," he adds. Since March, the stock has soared from 970 rupees a share to 1,730 rupees this week.

Environmentalists may baulk, though, at the company's predominantly coal-fired power stations.

Mr Mahtani also likes Grasim, a cement maker which will help cover the country in concrete over the next few decades. Since March its shares have leapt from 1,927 rupees to 3,008.

No investor in India can ignore Reliance Industries, the conglomerate that is worth 15% of the entire Mumbai market. Mr Mahtani has 18% of his fund in Reliance, and is enthusiastic about its supermarket strategy in which it intends to become the Wal-Mart of India.

What he's less keen on is the banking sector; he thinks operators such as ICICI Bank will be hurt as the credit splurge of recent years unwinds and households adjust to the recent rise in mortgage rates from 7% to 12%.

Aberdeen Asset Management runs an Indian fund with the same sort of performance figures as F&C - but what's striking is how the manager of the Aberdeen fund, Adrian Lim, has views almost the polar opposite of Mr Mahtani's.

Mr Lim has nothing in Reliance, while his biggest holding is ICICI Bank. He also remains a fan of India's software stocks, when many other investors have taken profits and sold out.

"Reliance is not cheap, and although they've done well in petrochemicals, on the back of the commodity boom, they are now going into areas such as retailing and the Special Economic Zones where they don't have much experience."

He reckons that over five years, interest rates will peg back and help ICICI grow its earnings at 20%-30% a year. This week it was trading at 900 rupees against its 1,010 high in May, but Mr Lim reckons it's a good long-term play.

Among India's software stocks, he picks Satyam, which outsources for US and European companies. But forget call centres - they're yesterday's business, even in India. Its chief source of revenue is writing software code, which enjoys much higher margins.

One worry is that Indian stocks trade on high price/earnings multiples, typically 17 times profits. But Fidelity India Focus manager, Arun Mehra, says: "The market reflects the underlying trend of earnings. From a valuation perspective, the market is trading at a high p/e ratio, but this is supported by double-digit growth, which is expected to continue."
 
The rebirth of a nation
Maria Misra's Vishnu's Crowded Temple is a timely history after 60 years of Indian independence
Sunday August 12, 2007
The Observer, UK

Vishnu's Crowded Temple
by Maria Misra
Allen Lane £25, pp536

Stereotypes about India not so much abound as keep multiplying. In popular imagination, India has gone, over time, from being the land of exoticism and mysticism to the back office of the world to - most recently - the rising economic superpower whose dizzying rate of growth is second only to China's and which will, along with China, redraw the geopolitical map of the world by the middle of the 21st century.

These are all misleadingly reductive summations of a country that, days away from the 60th anniversary of its independence from British rule, is simply too various and too complex to lend itself to such shorthands. It is, as Ramachandra Guha persuasively argues in his recent book India After Gandhi: The History of the World's Largest Democracy (Macmillan, 2007), no small triumph that India, as well as its democracy, not merely exists at all but continues to thrive. 'India will go on,' Guha quotes novelist RK Narayan telling VS Naipaul in the Sixties, and exactly how it does and how it possibly will have become the subjects of a clutch of recent books, including Maria Misra's Vishnu's Crowded Temple.

Misra, who teaches modern history at Oxford, has undertaken an ambitious project. She attempts to telescope more than 150 years of India's history into this book and tries to show, as she tells us in its closing pages, 'how India has developed its peculiar form of modernity, the most striking feature of which is its highly atomised, fragmented and diverse citizenry'.

It seems clear that one of the things that underscores the idea of India as a nation is its tradition of pluralism and diversity. Misra is not the first to make a case for this. In his illuminating collection of essays, The Argumentative Indian: Writings on Indian History, Culture and Identity (Allen Lane, 2005), India's Nobel Prize-winning economist Amartya Sen has eloquently described how the country's long tradition of argument, public debate and intellectual pluralism is central to the notion of India and Indianness.

This may not seem immediately obvious if one were to look at the long history of sectarian violence that has convulsed India. First, there was the bloodbath that accompanied the birth pangs of India or, more precisely, the birth pangs of the two nation states of India and Pakistan. At least 180,000 people died in what Lord Mountbatten, the last viceroy of India, called one of the 'greatest administrative operations in history'; train tracks were covered with corpses and whole trainloads of people butchered. Misra is good with the details of this chilling, pervasive violence and brings alive the scale of the carnage in those months.

More recently, there have been anti-Sikh riots in Delhi after the assassination of Indira Gandhi in 1984; the communal riots in Mumbai in 1992 and 1993, which then triggered the serial bombings that killed 257 people in India's financial and entertainment nerve centre; Kashmir continues to be an unresolved battlefield; and right-wing Hindu nationalists presided over a pogrom in Gujarat in 2002.

India's colonial history (the British had often encouraged sectarian conflicts, playing one community off against the other) and postcolonial experience both show how the country's democracy has repeatedly come under assault, how its secular fabric has been threatened time and again to be ripped apart. In spite of that, Misra reveals how India has drawn most sustenance from its diversity and plurality.

At the heart of her book are the sections on the two men seen as central to the story of modern India: Mahatma Gandhi, the most prominent leader of the nationalist movement and known as the father of the nation, and his protege, Jawaharlal Nehru, who went on to become India's first Prime Minister. Misra is unfairly harsh on Gandhi, seeing him as idiosyncratic, traditionalist and with a gift for combining political shrewdness with a sense of self-promotion and opportunism.

She has unmixed admiration for Nehru, who she sees as the opposite of Gandhi in many ways: 'He differed from Gandhi in the most important question of the age: modernity. While Gandhi romanticised the Indian past, both real and imagined, Nehru was in love with the future. Gandhi decried the Raj as the harbinger of modernity, while for Nehru it was the detested heart of the ancien regime. Nehru was a technophile, a religious agnostic, cosmopolitan in his tastes and an instinctive internationalist; the Mahatma was the opposite.'

The template of pluralism that is the key to India's enduring democracy, Misra argues, was conceptualised and laid out by Nehru. And she sees that - and the foresight and vision that implies - as his biggest contribution. 'Nehru's goal was to make a virtue of India's variety by creating the world's first self-consciously multicultural modern nation state.'

Misra is weak on two aspects of India's cultural life that have glued together for decades people from utterly different social classes and with different cultures, mother tongues and cuisines: mainstream Hindi cinema, or Bollywood, and cricket. Bollywood is the world's largest film industry and its popularity and reach are unrivalled by anything else in India bar cricket. Cricket is the only team game at which India is any good and it infuses as much of a sense of national identity and pride in the urban middle-class professional as the farmer living beneath the poverty line.

These are the two things that the tiny metropolitan elite - the biggest beneficiary of India's economic boom - and the 70 per cent of the population that lives in grinding poverty in the country's rural hinterland have in common - they comprise their only shared language. The movies and cricket are strong, critical threads that make India the patchwork quilt that it is.
 
India at 60: a remarkable success story
Monsters and Critics.com, UK
Aug 12, 2007, 2:45 GMT

A sepia-coloured newspaper picture underlines, in retrospect, a central feature of India's success as a nation. It shows groups of men sitting in front of rickety wooden tables, counting tiny slips of paper obviously taken out of a steel box. The occasion was India's first general election in 1952 and the slips were the ballot papers cast for 18,000 candidates by an electorate of 176 million people. The mammoth exercise marked the first step in India's remarkable journey to become the world's largest and, in its pluralistic ethos, the most successful democracy.

Sixty years after India attained independence on Aug 15, 1947, it has all become routine - elections which resemble a carnival, boisterous parliamentary politics, an independent judiciary before which no one is too high, a thriving economy knitting together a nationwide market, an uninhibited public sphere where activists agitate for various causes, a vibrant media with its 24-hour news channels and sting operations with hidden cameras probing all aspects of life.

The world now expects India to be a major power of the 21st century. But no one knew at the time of independence in 1947 how it would all pan out. Would Winston Churchill's fear, reflecting an imperialist mindset, that the British were handing over power to 'men of straw' prove true? Would the dire prognosis by Neville Maxwell in the The Times of London that the 1967 general election would be India's fourth and last be fulfilled?

While the communists in India and elsewhere were expecting a proletarian revolution to start any time, sceptics in the West didn't believe that fledgling Asian democracies had a future. And they were right, at least in relation to countries in India's neighbourhood.

If it is different in India, the reason is the commonplace scene in that old black-and-white photograph of men from ordinary backgrounds counting ballot papers. It is the successful functioning of autonomous institutions such as the Election Commission, which ensured, first, the survival and then the blossoming of Indian democracy. While autocratic regimes elsewhere routinely subverted such institutions, favouring rigged polls and turning the legal system into one of kangaroo courts, the Indian political class had the wisdom to ensure that the scaffolding of the democratic structure was not disturbed.

Perhaps the most important consideration before the founding fathers of the republic - who drafted the constitution - and their contemporaries and successors who ran the government was to ensure that the country's multi-religious, multi-cultural and multi-lingual heritage was carefully preserved. Evidently, the long years of freedom struggle had instilled the value of this pluralist heritage in the men and women who were involved in the anti-colonial battle under Mahatma Gandhi.

The currency note in India describes its value in as many as 17 languages. Although English and Hindi are the first two, the presence of 15 other languages is an acknowledgment of the country's multi-lingual status.

India had leaders like Jawaharlal Nehru, a disciple of the Mahatma who announced in the wake of anti-Hindi agitations in the south that English would continue to be an official language as long as the non-Hindi speaking people wanted it.

It is the same broadminded attitude, which ruled out theocratic concepts like having an official religion. Drawing inspiration from the Mahatma's precept of having passages from all religious texts - the Bhagavad Gita, the Quran, the Bible, the Guru Granth Sahib and others - read out at his prayer meetings, India, although a predominantly Hindu country, embarked on the path of consolidating its multi-religious heritage, which can be traced to Mauryan emperor Asoka in the pre-Christian era and to Mughal emperor Akbar in the 16th century AD.

There is little doubt that the good fortune of having leaders of the stature of Mahatma Gandhi and Nehru ensured that India could avoid the perilous path of sectarianism, which has been the bane of other countries. But there was more good luck, for not only did India reject a narrow outlook on religion and language, it also ensured that its nascent democracy was not challenged by any adventurer - military or civilian.

Before 1947, the Indian independence movement was an inspiration for all the people living under colonial rule in Asia and Africa. Unfortunately, the history of most of the countries in these continents after their liberation has been one of betrayal of the ideals of freedom that initially guided their leaders. Only India has been an exception along with South Africa, although the latter's is a different case in that it was not under colonial rule but was under a white supremacist regime.

Six decades after independence, India is still an inspiration because of its success as a multi-cultural democracy, which made well-known musician Yehudi Menuhin compare India with the 'fabled and symbolic Garden of Eden'.
 
Jawaharlal Nehru and the modernisation of India
By David A Granger
Sunday, August 12th 2007
Stabroek News, Guyana

India became an independent state sixty years ago on August 15, 1947. The first seventeen years of India's statehood were dominated by the policy and personality of its Prime Minister, Jawaharlal Nehru (1889-1964).

For the first few months after independence, Nehru still stood in the shadow of Mohandas K Gandhi (1869-1948) - the Mahatma - regarded as the father of India's independence. When Gandhi was killed on January 30, 1948, there was no longer a father-figure to whom Nehru could turn for advice and guidance. For the next two years, Nehru shared the spotlight of power with Vallabhbhai Patel (1875-1950), his deputy Prime Minister. Familiarly known as Sardar, Patel has also been justifiably called the father of Indian unification. But the Sardar, already seventy-two years old at the time of independence, died in December 1950.

Transition period 1947-1950

For the next fourteen years, Nehru was the single most important figure in India, both in the government and the Indian Congress Party. There was no major rival to his power up to his death on May 27, 1964 at the age of seventy-five years. For the greater part of the immediate post-independence period, therefore, it was Nehru who bore the burden of initiating and implementing measures for the modernisation of India. It is he who, consequently, must take the credit, or bear the blame, for its successes or failures.

Post-war situation

At the close of the colonial era, India was not yet a modern, developed country; this did not mean, however, that it was entirely backward or primitive. India had a long history of manufacture and commerce and the bulk of the people were peasants engaged in agriculture. During World Wars I and II, the British had permitted Indian industrialists to increase production and allowed the growth of indigenous capital. In fact, by that time, India was already among the ten biggest countries of the world in terms of population, industrial production, extent of railways, mineral resources and skilled engineers.

The post-war situation in India, however, was one of social distress and economic depression and not a little bit of political disorder. There were shortages of raw materials and spare parts; inefficient use of industrial plant; chronic unemployment and under-employment, especially in the villages; a reluctance on the part of private entrepreneurs to invest; a decline in production and the decay of crafts; spiralling inflation; the spread of black marketing, profiteering and corruption; a shortage of skilled personnel; the uncontrolled increase of population; strikes and political protest and unrest.

Partition

Bad became worse when partition rent the sub-continent asunder, splitting agrarian and industrial resources and the civil and security services, and spawning communal and sectarian strife. Nearly ten million, mainly Hindu, refugees poured into northern India from the west and east wings of the new Islamic state of Pakistan.

The division of the civil service, army and police between the two states weakened the government's capacity to quell communal violence which erupted and spread, and hobbled its ability to provide food for millions of destitute refugees. The threat to peace was aggravated by incipient conflict with Pakistan over the accession of Jammu and Kashmir and the centrifugal forces of separatism inherent in the Indian polity, which at that time was divided into more than 550 states ruled by semi-autonomous princes.

At the time of its independence, therefore, India faced pressing problems with which Prime Minister Nehru, Deputy Prime Minister Patel, and the unappointed 'guide' Gandhi, had to deal with right away. The first steps in statehood were therefore to safeguard the security, unity and stability of India itself.

Pacification

The suppression of violence and the settlement of refugees was top priority. Communal disorder precipitated by partition involved hundreds of thousands of victims - murdered, injured or raped - and millions dispossessed and dislocated, in addition to widespread damage and destruction of property. Nehru's refusal to use the British troops provided by Lord Mountbatten (the last Viceroy and first Governor-General) as a boundary force, did not help matters.

It was only the last fast by Gandhi, followed by his assassination in 1948, which restored some semblance of calm. The shock of this tragedy gave the new administration the leverage of popular indignation to repress the reactionary forces of Hindu communalism which had taken control of Delhi and some other large cities. The Rashtriya Swayamsevak Sangh (National Self Service Society) - a militant arm of the Hindu Maha Sabha - was outlawed and, paradoxically, as peace was restored, it seemed that the martyrdom of Gandhi had to some degree, served to facilitate Hindu-Moslem reconciliation.

Consolidation

The second step was that of the consolidation of the union. At the end of the colonial era, India was not a unified polity. The sub-continent comprised several provinces which were part of British India under central government rule and nearly 550 principalities under the supposedly semi-autonomous rule of traditional princes. Largely under the direction of Patel, and with the able assistance of VP Mennon, the campaign for the unification of India was successfully completed.

The campaign could be divided into three stages - accession, democratisation and integration. First, by a combination of Patel's coercion and persuasion on the one hand, and the princes' weakness and timidity on the other hand, all but three rulers agreed to accede to the Indian Union. They surrendered their rights and powers, such as they were, in return for the privilege of keeping their palaces, privy-purses, prestige and personal status as princes.

Surgical military action had to be applied to incorporate the remaining three states - Junagadh (November 7, 1947), Hyderabad (September 13, 1948) and, most difficult of all, Jammu and Kashmir (October 26, 1947). In the case of Jammu and Kashmir where the population was largely Muslim and the ruler was Hindu, Pakistani-supported 'volunteers' launched an attack on October 22, 1947, probably with the purpose of seizing that territory from India. As a result, a virtual Indo-Pakistan war broke out between the two new states and lasted until a ceasefire was arranged from January 1,1949. This dispute has never been settled.

Nevertheless, with this one exception, India had been able to achieve a sufficient degree of internal stability, and territorial solidarity for orderly national development to take place within its early years. Nehru's role in this exercise was, comparatively speaking, a negligible one; it was to a greater degree, Patel's achievement, more than anyone else's.

Constitution

The third important step was the promulgation of a new constitution and the creation of a sovereign democratic republic on January 26, 1950. The drafters of the constitution apparently sought their inspiration and ideas for a democratic and federal state, more from among the Anglo-Saxon states of the western world such as Australia, Britain., Canada and the United States of America, than from traditional Indian sources.

The constitution provided for a federal and parliamentary system; universal adult suffrage; a bicameral legislature made up of the Lok Sabha (Council of the People) and the Rajya Sabha (Council of the States); a head of state who was the President of the Republic elected jointly by the central and state legislatures; an executive headed by the Prime Minister and responsible to the Lok Sabha; state governments headed by Chief Ministers; and a central government which controlled the functions of defence, foreign affairs, railways, posts and currency, among other things.

Certain other significant features of the constitution included the legal abolition of untouchability and the de-recognition of caste distinctions. Although they safeguarded the civil rights of a significant section of India's population, they were decidedly muted and were not rigorously enforced during the early years of the republic.

After these three steps - the pacification of the disturbances, the consolidation of the state, and the promulgation of the constitution - India could be said to have possessed all the pre-conditions for taking its place as a full member of the international community of nations. Nehru now had the opportunity to continue his programme of modernisation into the second half of the 20th century, a period of construction and change.

Construction period 1951-1960

Nehru's general objective seemed to be to bring the country materially on to a level with the western world by radically raising the standard of living and by guaranteeing the personal and civil rights of the people. His policies in the fields of economic development, social reform, political affairs and foreign relations all testify to his intention to modernise India quickly, perhaps too quickly.

First of all, Nehru turned his attention to the state of the economy. At the middle of the last century, the outstanding features of the Indian economy were a low standard of living, a high rate of population growth, a stagnant agricultural sector, insufficient heavy industries and a scarcity of capital. Nehru's strategy was to defeat underdevelopment by industrialisation. By this means, he expected both to provide more goods and to create more jobs.

Central planning

A National Planning Commission was established in 1950 and this was followed by a National Development Council under his personal charge. Nehru's aim was to develop a mixed economy made up of a public and a private sector. In the main, the public sector engaged in the steel, petroleum, electrical, machine, aircraft and shipbuilding industries. The private sector engaged in the textile, cement and engineering industries, in addition to traditional small-scale manufacturing.

There followed a series of five-year plans which were meant to harness the energies of the whole state and people towards achieving the targets of the plans and objectives of the policies. These plans, however, were at variance with the realities of the Indian economy itself in that they did not immediately establish a link with the existing financial, agrarian and rural structures and systems. To some degree, therefore, Nehru's industrial modernisation programme, impressive though these massive projects must have appeared in the rural landscape, were partially an irrelevant activity to the bulk of the peasants at that time.

The bulk of the population was still immobilised in the countryside. More than 70 per cent of India's working population in the Nehru era still earned their livelihood from agriculture and seven out of eight villages were still wholly or partially dependent on agriculture. But there were few modern tractors or harvesters; planting and reaping were still done extensively by hand; in the dry season in many areas, water still had to be fetched by human or animal power onto the fields. The inescapable result was that at the end of the plans, India still could not feed itself and had to import grain.

Domestic policy

Nehru's policies for the social modernisation of India were rooted in good intentions. The most noteworthy effort was in the field of education. During this period, there was a proliferation of universities, technical institutes and research centres concerned with every branch of science, from agricultural food grains to atomic energy. The aim might have been to provide the technically-trained manpower for the new industries; it did this and more, even supplying a surplus of graduates who could not readily find employment. On the other hand, elementary education, especially in the countryside, continued to lag. At the time of independence, the literacy rate of the country was estimated at about 15 per cent, but by the end of the Nehru era, nearly seventeen years later, it had not gone beyond 25 to 30 per cent.

The most critical aspect of rural life, however, that of agrarian reform, was not an unmitigated success. Nehru's earlier promises to provide 'land to the tiller,' to revoke debts, and to replace money-lenders by formal state credit institutions did not materialise. It is true that rents were regulated and certain extra-economic powers exercised by unscrupulous landlords, such as the arbitrary eviction of tenants, were drastically curtailed and the parasitical zamindari (tax-farming) system was abolished in 1956. Despite these changes, the basic structure of land ownership was not placed in the hands of the peasantry. The rural rich who dominated the Congress Party apparatus, especially at the regional level, resisted reform. They were able to keep the peasantry in place amidst primitive techniques and practices, fixed at the bottom of the economic ladder and bound to the land.

Nehru's policy for political modernisation faced two challenges. The first came from the ethno-religious communalism and the second from the forces of factionalism inside the party. Before independence, the Congress Party had pandered to particularistic pride and ethnic interests in order to win support against the British. Once in power, however, Nehru became lukewarm, if not hostile, to the demands of the polyglot groups of India's pluralistic society. As time went by, demands grew more insistent, especially as regional politicians exploited those grievances to build their own power bases and protect their interests against intrusion by the central government. After Andhra was created in 1953, it was impossible to quell the clamour from other groups making similar requests for special and separate treatment.

Nehru's policy fell to pieces and a States Reorganization Commission had to be established to study the whole question and to forestall secession by allowing some degree of cultural autonomy among India's diverse peoples. Side by side with the call for separate states came a profusion of ideological, regional, political parties. In the course of time, disaffected and disillusioned members and factions from the Congress Party, separated and set up new parties to represent their own special interests, and to oppose Nehru as a person, or Congress policy as a whole.

Foreign policy

India's foreign policy held Nehru's personal interest throughout his tenure of office. Nehru probably had a deep appreciation of the geopolitical and strategic importance of India with its large land-mass located at the head of the Indian Ocean. India's awareness of its own economic and strategic vulnerability was, perhaps, a powerful inducement to avoid hostile entanglements with super powers, to keep the doors open to foreign aid, to preserve peace on its borders and to suppress conflicts in the region. In the bitter global politics that characterised the Cold War which followed World War II, Nehru realised that Asia was becoming, once again, an arena of conflict.

Nehru opposed the attempts by France and the Netherlands to repossess their Asian empires in Indochina and Indonesia, respectively. The establishing of the South East Asia Treaty Organization (1954) and the Central Treaty Organization also shut India out of the network of western alliances being woven in the region. The rapid rise of the communist People's Republic of China, indicated that India's claim to leadership in the Asian community would not go unchallenged. Fourthly, the outbreak of the Korean War (1950-1953), which was fought by the Asian surrogates of the two super-powers - the USSR and the USA - threatened to envelop East Asia in a wider war; and, finally, the development of the hydrogen bomb, exploded first at the Bikini atoll in 1956, raised the awesome spectre of the destructive power of modern thermo-nuclear warfare.

These factors all influenced Nehru's world view. He conceived the Indian Ocean as a 'zone of peace,' free from super-power rivalry and free from the ravages of war. In this idealistic scenario, he saw India as a key, if not a leading, player in a group of states which would form a third force in world politics, joining neither the eastern nor western blocs but holding the balance of power between both. Nehru went further by trying to apply his policies to countries on India's borders, or at close reach in Asia. Nehru sought to influence the internal affairs of Burma, Ceylon and Nepal earning the dubious credit, in the last, of having encouraged the overthrow of the Rama regime (1951) and engineered the rise of the Nepali Congress Party. Hence, a wide gap started to develop between his noble principles and his actual practices and, as a result, some of his actions backfired.

He successfully negotiated with France the surrender of the French enclaves at Pondicherry, Mahé, Chandernagore and Karikal on the sub-continent. When a similar diplomatic démarche failed to get Portugal to relinguish its enclaves at Goa, Daman and Diu, Nehru had no compunction about resorting to military force. In contravention of the inconvenient but undeniable precepts of international law, the Indian army forcibly evicted the Portuguese in 1961. The following year, perhaps in pursuit of inaccurate advice or of misguided objectives, Nehru allowed himself to be persuaded to order an advance of the Indian army on the 'McMahon Line' which was used as the colonial boundary demarcation with the People's Republic of China. The Chinese responded with force. There followed a brief Sino-Indian war which started with a massive Chinese attack on October 20, and ended abruptly a month later on November 21, 1962. During this short time, China's People's Liberation Army advanced at will, occupied over 36,260 km2 of India's territory, decisively defeated the Indian army and had withdrawn again. Nehru was humiliated by these strategic reverses.

Nehru embarked on an active policy to advance India's role as a leader among the emergent states of Africa and Asia. At a conference in Bandung (Indonesia) in 1955, he was able to win acceptance of his doctrine of the panch shila. The concept of non-alignment was also advanced by Nehru at that conference and, thereafter, it was spread to other emergent states. Nehru's notion was that a third force, made up of politically weaker, but numerically stronger developing countries, standing somewhere between the two super-powers and their satellites but allied with neither should be non-aligned, maintaining relations with both the eastern and western blocs, but avoiding the entanglement of military alliances which would lead to international conflict.

By 1956, however, Nehru's foreign policies were already under attack. His caustic criticism of Anglo-French aggression in Egypt (1956) in the Suez Crisis was compared unfavourably to his rather mild scolding of Soviet aggression in Hungary in the same year. This was regarded as bias by many western powers. China's rise as an Asian rival also had eclipsed India's position in the regional spotlight. India's humiliating defeat by China exposed its military weakness and undermined its claim to big power status.

In foreign affairs, Nehru did have outstanding successes which helped to give India the responsibility and the respect of a modern state. It may be argued, however, that Nehru's moral positions and noble principles had little practical effect on world peace. But, by adhering to them, India was able to define its position in the world community and develop itself politically as a modern state.

Climacteric period 1961-1964

After ten years in office as Prime Minister, cracks had started to appear in the modern state which Nehru had been trying to construct. Serious criticisms were made of his handling of both domestic and foreign affairs; his programme for India's industrialisation and modernisation and his reputation declined.

Internal affairs

In the domestic sphere during this period, political opposition built up on all sides. The socialistic pattern of development drove conservative and capitalist elements into the conservative Jan Sangh and Swatantra parties. On the other hand, Nehru's policies were considered too mild to alleviate the poverty of the masses and did not go far enough to satisfy the socialists and communists represented by the Kisan Mazdon Praja (Peasants, Workers and People's Party) and the Communist Party of India.

At state level, Congress Party administrations were riddled with revelations of corruption, factionalism and defection (crossing-the-floor in the legislature). These resulted in the steadily declining support for Congress and were reflected in the reduced number of electoral votes from 47.78 per cent (1957) to 44.72 per cent (1962). The enormous growth in governmental power as a result of the enlargement of the public sector and of the passage of laws designed to curb excesses, permitted the government to regulate private industries. But they had the effect of placing enormous discretionary authority in the hands of poor public servants who, more often than not, were unable to resist the bribes and inducements offered by businessmen seeking favours and advantages. As a result, graft and corruption soared to astronomical levels.

India's economy appeared to grow, at least in statistical terms. Gross national income, however, increased at a decreasing rate, and per capita income stood still. Large amounts of grain had to be imported, spare parts for machinery were difficult to acquire and there was a significant fall in foreign exchange reserves due to the starvation of capital from foreign countries and institutions.

Several other factors helped to destabilise the economy and to hobble Nehru's drive towards modernisation. These included most of all unchecked population growth; the Sino-Indian frontier war; the escalation of military expenditure; the suspension of some foreign financial assistance; and the effect of famines caused by droughts, bad harvests and natural disasters.

Nehru was seen as being personally responsible for most of these failures. He was considered an inept administrator who did not effectively delegate authority to his subordinates. He attempted to make all important administrative decisions himself and, as a result, when he was out of the country as he frequently was, little of importance was achieved by his ministerial colleagues. Even when he was present, he insisted on dealing with important matters personally, and the bureaucracy could move only as fast as Nehru was able to make decisions.

External affairs

Nehru's foreign policy, which aimed at catapulting India onto the world stage, also fell short of the mark. He wanted to make India the moral leader of the new Asian and African states but he was criticised for this increasingly, both inside and outside of India. Rapid changes were taking place year by year in world affairs and Nehru's policies which seemed to be progressive and forward-looking in the 1950s, started to appear effete and irrelevant by the 1960s.

Nehru's death on May 27, 1964 at the age of 75 years seemed to coincide with the decline of his influence, the collapse of his plans for India's rapid modernisation and the eclipse of his idealised conception of foreign relations.

In the final analysis, Jawaharlal Nehru's attempts at India's modernisation left an impression of only partial accomplishment. They set in motion, nevertheless, diverse domestic and foreign forces which contributed to India's long-term economic, social, political and strategic transformation.
 
When Holly met Bolly
Hollywood takes the Indian musical to heart with a new film

Anil Sinanan
The Times
August 9, 2007

The American actress Ali Larter laughs, when I ask her if she is about to become the next Aishwarya Rai. “My greatest challenge was to dance Bollywood style, as I have two left feet,” she says.

The film is Marigold, a cross-cultural romcom, in which the star of the hit US series Heroes teams up with the Bollywood superstar and heart-throb Salman Khan. It is the first significant Hollywood film to appropriate Bollywood’s unique style of film-making, with plenty of knowing references for Bollywood buffs and with enough savvy to engage newcomers.

Larter plays Marigold, a struggling American actress who arrives in Goa to start shooting on her latest film, Kama Sutra 3 . When funding for the film fails to materialise, the penniless foreigner is forced to become a dancer in a Bollywood musical to survive in India. Marigold falls in love with the film’s hunky choreographer Prem (Khan); but he has an intended arranged marriage with his childhood sweetheart. Complications ensue, but no prizes for guessing the outcome. The plot may be pure Richard Curtis, but Marigold is unique and even radical on several counts.

It is an astute recognition by Hollywood of American audiences’ interest in Bollywood films. In 2006, five Bollywood films grossed more than $2 million in the US. But, as in Britain, Bollywood audiences in America are predominantly South Asian. Mainstream American audiences are hesitant to view subtitled films and the culture-specific subjects of many Bollywood films appear too alien.

“I hope this movie acts as a window into the Bollywood world,” the American director Willard Carroll says. It certainly attempts to bridge the cultural cinematic gap. It is filmed in English, it is not three hours long, and the title is pronounceable. Basically, it is a romcom that unfolds in touristy India: major sequences take place in lush Goa, in majestic Rajasthani palaces and on the enchanting Elephanta Island, just off Bombay.

“It is not really a Bollywood movie; it is more of a romantic comedy that is set in India,” Carroll explains. But the film acknowledges the traditions and the camp excesses of the Bollywood formula. Characters unashamedly break out into song and dance; respect for family elders is accentuated and everyone lives happily ever after.

Other Hollywood films have featured Bollywood but only as songs on their soundtrack, most notably Baz Luhrmann’s musical Moulin Rouge! (2001) and Spike Lee’s Inside Man (2006). However, they did not attempt homage to Bollywood itself.

Marigold , though, is set entirely in and showcases modern India. “India is not a land of snake charmers any more. Our economy and films are booming. It is hoped every NRI (non-resident Indian) will take their British or American friends to see this movie,” Khan says.

The casting is unique: Larter is hot property in Hollywood; Khan has been a Bollywood A-lister for more than a decade. Their pairing is likely to draw in a wide range of fans. “Salman’s natural charisma comes across beautifully on screen,” Larter says. “This film is a beautiful kiss to Bollywood that will appeal to all audiences.”

Cynics may argue that the film is cashing in on the trend for all things Bollywood. Why did Carroll decide to make an American Bolly-rom-com? “I fell in love with India and with Bollywood when I visited India four years ago and wanted to make a film in this style,” Carroll states. “Hindi films have made some inroads into America but most Americans have not seen a Bollywood movie. The film gives a positive view of modern India; its theme of family is universal. It is hoped that all American audiences will warm to this as many of them feel family kinship is currently lacking.”

Whether or not Marigold succeeds in its aims remains to be seen, but it looks as if Hollywood has woken up to the box-office potential of cross-cultural comedy, especially in light of movies such as My Big Fat Greek Wedding (2002). Bollywood has now been embraced by Hollywood, but on its own terms.
 
India's poor graduate as IT pros
Contractor UK, UK

Take 89 students from India’s lowest caste and give them seven months’ training in IT-businesses, and 80 will get jobs at Infosys, WiPro, IBM and Hewlett Packard.

IT academic Prof S. Sadagopan has proved that being social excluded in the world’s leading offshore location for IT services is not a barrier to joining the business elite.

Last October, he opened the doors of his technical college in Bangalore to 89 disadvantaged youngsters, and offered them skills in leadership, communication and team-building.

As part of the 26-week course to work at a leading IT company, students got their own laptops to access the internet, and were even taught table manners to smooth interaction.

Graduates of the course, at the Indian Institute of Information Technology, now work in IT jobs that pay them 33 times more than what their parents earn, The Times reported yesterday.

“We taught them fishing, instead of giving them fish,” Prof Sadagopan told the paper.

He added that the course was aimed at boosting their confidence and giving the youngsters, most of whom would normally work in menial jobs, “something they couldn’t get otherwise.”

Conceived by Infosys, the initial success of the IT-business programme has been seized upon as evidence that the new economy in India can break down the nation’s social barriers.

One student, Ramesh, who already had a computer science degree but couldn’t find an IT job, now works at Bally Technologies, a Las Vegas-based gaming company in Bangalore.

He is reported to earn 20,000 rupees a month, while his father, who owns no land and works for local farmers on tea estates, earns a monthly wage of 600 rupees – about £7.

“This course should be expanded but it should only help poor people,” Ramesh reportedly said. “Otherwise the well-off will always be going up and the poor will be always going down.”
 
Status
Not open for further replies.
Back
Top Bottom