India's Socioeconomic Makeover

By Breyer, Richard | The World and I, August 1998 | Go to article overview

India's Socioeconomic Makeover


Breyer, Richard, The World and I


"Namaste, Sony Entertainment Television. Please hold. Namaste, Sony..."

It's a hectic morning at the corporate headquarters of one of India's leading cable companies--and New Delhi's recent nuclear test explosions haven't caused the pace of business to miss a beat. Inside, secretaries juggle phone calls. Outside, in the crowded reception area, anxious young producers-men and women in their midtwenties--rehearse their pitches and plan power lunches on their mobile phones.

Off to the side, a large television set shows I Dream of Jeannie. Jeannie speaks Hindi, out of sync.

This is the new, post-1992 India--young, ambitious Indians in offices of multinational corporations; mobile phones; cable television; and Hollywood stars dubbed in Hindi.

In the old India, there was no cable television or mobile phones. Multinationals had to play by the government's Byzantine rules. Many stayed away.

And before the 1992 economic reforms, the young and the restless were not rehearsing pitches or doing power lunches. They were at the U.S. Consulate applying for a visa to study in the United States, or at; the Ministry of Information meeting an uncle who would introduce them to the subsecretary in whose department there was an opening.

In 1992, India began dismantling its unique brand of socialism-part Soviet-style centrally planned, part British colonial bureaucracy The country really had no choice. With the fall of the Soviet Union, India lost a major trading partner, political ally, and benefactor.

MIRACLE OF THE FREE MARKET

Before the reforms, most of the pillars of commerce--banks, utilities, airlines, trains, radio, and television--were government owned. High tariffs, inconvertibility of the rupee, limitations on foreign ownership, corruption, and exorbitant taxes kept foreign investors and multinationals away.

Today there are privately owned airlines, phone companies, and television channels. Foreign capital is being invested in India, and foreign corporations are setting up shop. There are more choices, more jobs, more money flowing into the country and into the pockets of the well-educated, well-connected urban middle and upper classes--stockbrokers, airline executives, copywriters, computer programmers, shop owners, and TV producers.

Five years ago it was difficult to find pizzas, jeans, and Walkmans in India. Today Domino's, Levi's, and Sony have outlets in most major cities. India's affluent can shop at malls and supermarkets, watch cable television, surf the Internet. Their children have Barbie dolls, Star Wars action figures, and video and computer games. To put it simply, India appears to be becoming more Western.

Is this good or bad? It depends on whom you talk to. The upper 5 percent, whose horizons are broader and pockets deeper as a result of this trend, are very pleased. Followers of Mahatma Gandhi give it a thumbs down, arguing that Walkmans and pizza have tittle to do with self-sufficiency and simplicity.

Others are concerned that a relative few will benefit from these changes. India's population is nearing a billion. A third are poor--some very poor. The saddest cases are in dries, where millions live in, to Western eyes, garbage heaps.

In the new, more open economy, the gap between the haves (200 million at the most) and have-nots (300 million at least) will likely increase. The majority of the poor simply do not have the resources or opportunities to participate in the new order, but the communications revolution will make them more aware of what they're missing.

In Indian cities, at an intersection or stoplight, it is quite common to see a primitive oxcart next to a Mercedes. In the past, the oxcart driver did not envy--and probably did not even see--the Mercedes and its well-dressed owner in the back. If India's consumer-based culture is anything like the West's, however, in the future the poor will want essentially the same things as the rich.

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