How India got Bangalored

If you heard about it in London or New York, the pattern of news from India might sound like a nation on the move. Tales of Indian prowess in everything from answering US phones to buying venerable European industries were fostering a perception of a country whose seemingly infinite size was matched only by its limitless potential. Being "Bangalored" had become slang for one of the defining processes of the global economy – offshoring, the movement of jobs from the expensive West to the cheap East. Global communications had brought millions of Indian doctors, engineers and IT specialists into the world market. Western retailers were salivating over the idea of a billion new consumers. Put those stories together and the idea of an emerging giant was convincing.

But success was only half the story. Yes, there are new billionaires aplenty in India. In 2007, Forbes magazine found thirty-six – more than anywhere else in Asia. But next to 900 million Indians who earn $2 a day or less – a third of all the world's poor – those were thirty-six drops in a very large ocean. Nor was India's boom closing the gap. Contrary to a common supposition in the West, sucking in jobs from the rest of the world had not produced an employment bonanza in India. Offshoring only employs 1.63 million people out of a workforce of 400 million and a population of 1.1 billion [UN figures]. The desperation at the bottom of India's economic ladder can be judged by the 740 000 applications received by Indian Railways when, in 2004, it advertised 22 000 labouring jobs.

The reality is that India continues to be home to more poverty than anywhere on earth – more than all Africa, and more and more each day. It accounts for more than a quarter of the world's extreme poor, according to a 2005 UN report 380 million people who earn $1 a day or less. At 2.4 million a year, its families cope with more than half of all child deaths in the world. More than 770 million Indians have no sanitation, 170 million drink fetid water and the World Bank says 47 percent of all children are malnourished.

India's national budget is roughly the size of Norway's (population 4 million). In a country the size of India, that rules out a welfare system, meaningful attempts to address inequality or any of the normal state checks on capitalism you expect in the West. India had swapped its [earlier] socialist dreams for libertarian ones. But for most of its people, the same nightmarish poverty endured.

[Selected extracts from "Falling Off the Edge" by Alex Perry, Macmillan, London, 2008 (ISBN 978-0-230-70689-7)]

Submitted by Frank.