Special Report

Not Your Father’s Mother India

The cynics thought it would never happen.

By 2.19.09

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India is a Motherland -- Bharat Mata means Mother India when transliterated from Hindi. For India, motherhood is a symbol of sustenance and protectiveness; there are female deities (devis) in the Hindu religion that support the image of women providing strength.

For years, Mother India has evoked rural scenes: Camels turning a Persian wheel irrigation system; bullocks pulling a cart of cut sugar cane on the way to the mill; women bent over harvesting chilies; men laboring at a brick kiln in the heat of the day; a tea stall (dhaba) operator preparing sweets from fresh milk; and families quietly eating lentils and bread (roti) in their small stone kitchens. Politicians, not only Indira Gandhi, sought to identify with this concept, to appeal to India's 600,000+ villages in the agrarian economy, which still employs about 60% of India's work force.

Like a giant cocoon, Mother India became both a place and a concept -- it projected simplicity and the village as the essential unit of economic life. After independence, successive governments espoused central planning, emphasizing rural self-sufficiency -- conflating the values of Mother India, Fabian socialism, and the Gandhian way of local sustenance -- to prevent the onslaught of industrial development and capitalist forces.

Mother India became an image implicitly used to stifle risk taking, investment, and free trade, and stunt the development of Indian companies by preventing competition. With this philosophical brew, India was righteous, moralistic nation lecturing the West about the evils of capital, domestic and foreign. Its vast human and natural resources were underutilized, and India was condemned to be an economic underperformer.

The cynics thought it would never happen, or at least not for many generations. India has now burst through this cocoon, at least in part. Prime Minister Narasimha Rao introduced massive reforms in 1991, deregulating the current account entirely and the capital account in part, and ending government dictums to industry about what to produce, where and how. India has become a free trader, open to foreign investment, without the exchange and capital controls that characterized nearly fifty years after independence. The ensuing changes to the mindset of the country, its economy and values are profound -- so much so that nothing short of a revolution is occurring.

What has certainly emerged is a very self-assured country. Business enterprise, not government, is now chic. No longer is India wondering whether it is better or worse than the West. India has stopped blaming its problems on Britain, or the United States, in some respects the successor and assignee of the British Empire. No longer do Indian newspapers run ads showing foreign models using Indian consumer products. The hypersensitive country, quick to scold and bait the West, is no more.

Indians are rightly proud of their methods and protocols, and they see themselves with new confidence: a noisy but successful democracy, a massive regional power with globally recognized brands like Tata, Wipro, Infosys, and Mittal Steel, and high quality consumer goods; a nation attractive to foreign multinational investors and hedge funds; a world leader in information technology; a provider to the world in the mainstream; a stabilizing force with an army, air force and navy all ranking in the top five armed forces of the world; and a strategic partner for the United States. A middle class of several hundred million has been created in a generation, aggressive and acquisitive, a full-fledged member of the Internet economy. With reportedly six million cell phones registered per month, and the broader rise of the digital economy, the benefits of technology are spreading throughout Indian society, giving access to information to those who once did not have it, and helping to level the barriers of the earlier command and control culture.

World Bank statistics indicate that since 1981, the percent of people below the poverty line in India, now defined as living on less than $1.25 per day, has fallen from 60% to 42%. However, during this time the number of poor has increased from 420 million to 455 million. India is still a very poor country, with several hundred million more marginally above poverty, and by other estimates, 750 million live on less than $2.00 per day. It is a scale of despair unknown in much of the West: Vast shanty towns or bustees adjoin industrial sites, train stations, and residential areas -- some merge with other shanty towns, made of brick or concrete blocks with corrugated iron roofing, tarpaulins with poles, empty flour tins and torn truck tires -- and whatever else the consumers of the other world discard.

Against the backdrop of a successful middle class on the ascent, there is a strong undercurrent of anger in rural areas and cities, manifested in part by the resurgence of the Naxalite movement, a Maoist type of insurgency that is represented in at least 25% of the districts of India, by some estimates. Resentment over the forced sale of agricultural properties for manufacturing purposes, and the alienation of landless, tribal, and low-caste segments of the population are powerful sentiments believed to fuel this movement, which originated in the 1960s in the state of West Bengal.

On a lesser scale, another example of this anger is the reaction to the highly successful film, Slumdog Millionaire. Portraying the gruesome reality of life in the bustees, it has incensed some Indians because of the use of the word "dog" in the title. Kuttaa in Hindi-Urdu means "dog" and is among the most vulgar forms of abuse, and slum residents have organized protests in cities such as Patna and Mumbai.

One cannot yet say that India is making it. But one can say that up from the ranks, several hundred million Indians are making it and will be making it even more, as the country continues to advance with a laissez-faire economy in a secular democracy. Not only that, many small landowners have benefited from the sale of their agricultural properties to industrial and commercial forces seeking to expand. Gurgaon, a southern suburb of New Delhi, is a case in point, where new wealth has passed to those who once owned farms that cut sugar cane and made molasses after the harvest.

The spirited, kinetic city of Bombay will recover from its horrific trauma, although the ruling position of the Congress Party is no longer assured in the elections in April-May of 2009. A strong challenge has been mounted by the opposition Bharatiya Janata Party, in view of intense public disaffection over the government's response to terrorist bombings in a number of major Indian cities.

The effects of the major global economic crisis and recession remain to be seen with regard to India. There is no question that its nearly 9% GDP growth rate in recent years will be reduced -- the latest government estimates project a 7.1% growth rate this quarter. Some observers believe that India must continue to record a high single-digit growth rate with low inflation for a number of years -- to provide upward mobility for more of its population and to achieve further economic advancement.

It is also widely recognized that the next plateau in India's development will need to be governance. The scandal involving the blue chip IT firm Satyam, now known as "India's Enron," has unfolded with accusations of colossal corporate legerdemain, and the World Bank has also announced that it has debarred Wipro, another Indian corporate icon. Governance means not only Sarbanes-Oxley style corporate disclosure and behavior, transparency of government procurements and protocols, and a rejection of undue influence in decision making. It also means a sense of the public good that transcends the din and cleavages of religion, ethnicity, caste, language, and regionalism.

India has come a long way in a generation: it is not your father's Mother India.

(Mr. Schell recently returned from a mission to India with the Dean's International Council of the Harris School of Public Policy Studies at the University of Chicago. He served in the U.S. Peace Corps in India, and speaks Hindi-Urdu.)

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About the Author
Frank Schell is a business consultant and former international banking executive. He serves on the Dean’s International Council of the Harris School of Public Policy Studies, University of Chicago where he is a lecturer.