The Economist has two articles dealing with the increasing wealth of a section of the population in India and China. From the India article:
The Indian economy, following an unusually lavish monsoon, is growing at a rate of 7% a year or more. Economic recovery in the United States, the biggest market for India’s IT industry, has not dented American companies’ zeal for cost-cutting. Every company needs an India strategy, says Kiran Karnik, who heads Nasscom, the Indian IT industry’s lobby. Indeed, hardly a day goes by without news that a big firm is shifting to India some of its back office: software development, accounting, insurance-claims processing, call-centres and so on.
The lure is a well-educated English-speaking workforce whose wages, compared with those commanded by Americans and Britons, are peanuts. Not, however, by local standards. Rohit Kapoor, president of EXL, an outsourcing firm with three centres near Delhi, says a freshly recruited contact-centre worker may expect to earn 10,000 to 12,000 rupees a month, plus a performance-linked bonus. Mr Karnik points out that that is often pocket money, since many will continue to follow Indian custom and live at home until they marry. Opportunities for the best workers are spectacular. Mr Kapoor says that some of his managers, who have been with the company for just three or four years, are earning 150,000 rupees a month. Such sums would have been unimaginable for Indians a few years ago.
Suhel Seth, of Equus Red Cell, an advertising agency in Delhi, calls it the yuppification of India. He cites two ways in which the phenomenon is challenging Indian tradition. First, young people positively relish conspicuous consumption. They do not share the qualms felt by their parents, brought up in a climate that mixed Nehruvian socialism with ancient Hindu ideals of renunciation. Rolex, says Mr Seth, with his profession’s knack for pithy hyperbole, has replaced religion.
Second, and potentially of vast significance for a country as stratified as India, this is bringing about a second unification, in which the young and affluent across the country define themselves not just by caste, creed and language, but by a shared consumer culture, spread by television, which now reaches nearly half India’s homes. As a result, spending patterns are changing.
And some food for thought: “A study in 2001, which Nasscom’s Mr Karnik believes still stands, forecast that by 2008 India’s IT and other service exports would account for a third of the country’s inflows of foreign exchange. However, they would directly employ only 2m people. Thus they could absorb but a fraction even of the 2m or so English-speakers who graduate from university each year. Set that against the vastness of rural India, where 700m people must live their lives without even a whiff of a cappuccino, and the new yuppiedom still seems pretty exotic.”
Rural India needs to march ahead in tandem. That is also our India.
India+T
