Transcript Document

India – Still Not “Flat”
Globalization and India
 Thomas
Freidman has
asserted that globalization
has made the world “flat” as
evidenced by the growing
service sector within India.
 This also implies that India is
“flat.”
 Reality on the ground may
differ.
Population’s impact
 Currently
the world’s 2nd
largest country with
1,121,800,000 people in mid
2006.
 1.7% natural increase
 2025 – approaching 1.4
billion
 Will surpass China by 2032
 70 million have moved to the
cities between 1991-2001
70% Rural
600,000 villages
Poverty Abounds
Open sewage and toilet
By the Numbers
 Per
Capita GDP - $3600
 60% agricultural/ but only
20% of GDP.
 100 million farmers own NO
land.
 Approximately 80% of all
Indians live on the equivalent
of less than
$2 a day.
Information
Technology’s Impact
 India
produces about 100,000
new engineers a year. About 3
times the number of the U.S.
 But still only 1.6 million people
are employed in IT and Service
Center jobs.
 Key centers include Bangalore,
New Delhi, Gurgaon, and
Hyderabad.
U.S. companies in India
IT Services-design,
support, and or production
Adobe, Cisco Systems,
Dell, Google, HewlettPackard, General Motors,
IBM, Intel, Microsoft,
Motorola, Texas
Instruments, Yahoo
Indian IT and Service
Development
 IT
giants –
–Infosys
–Wipro
 TATA Consulting and Financial
–Also TATA Motors
 Convergys
–World’s largest call center
company
“Brain Drain”
Young talent leaving India seems to
be slowing down.
 Average starting salary for an IT
engineer in India today is
approximately $10-12,000.
 Many are graduates of the Indian
Institute of Technology
– Several campuses located
throughout the country
 This salary provides a comfortable
lifestyle in modern India for the
privileged few.

Disparate Taxation
 Only
35 million people pay
income tax to the federal
government.
–Formal Sector
 Over 1 billion pay NO federal
taxes!
–Informal Sector
–Largely agricultural or
village based
Growing Middle Class
 Over
200 million people falling into a
growing middle class of consumers.
 Technically defined as those earning
between $4000-$21,000 a year.
 This actually only accounts for 60 M.
 “Middle class-ness” seems to include
those going from living on $5 a day
to $10.
Education is far from
universal
Compulsory and free
education (6-14 yrs.)
guaranteed with the Right
to Education Bill 2005
Virtually un-enforceable.
Literacy rate of India
stands at 59%
Reality’s impact
 Economic
conditions
necessitate
children as
day workers
in cottage
industries or
in
agricultural.
Mid-day in Delhi
Cultural bias reigns supreme
 “Other
Backward Caste” law to
increase quota up to 27%
(currently 22%) of students in
government higher education
was recently put on hold. –
March 2007
 Higher caste are increasingly
having to share power as OBC’s
make up nearly 50% of the
population.
 Private
schools
are very costly
and for the
most part
exclusive.
 Rural villages
depend on
untrained
teachers and
NGO’s for help.
Conditions
in the
rural village
schools are
usually far less
modern and
funded.
Lacking Infrastructure
 Major
cities are not connected at this
point by a highway system.
 Golden Quadrilateral Highway Project
will eventually connect New DelhiMumbai-Bangalore-Chennai-Kolkata.
- $12 billion
 Currently only 3,700 miles of
highways!!!
 40% of farm produce goes to waste
as a result of poor transportation
Scheduled Improvements
 New
$430 million Bangalore
International Airport to be
completed by April 2008.
(European built and operated)
–Roads to the airport are
uncertain
 Vallapardam Ship Terminal in
Kochi (southwest coast of
Kerala) to be completed by
Dubai’s DP World at a cost of
$555 million
The Caste System
 India’s
source of strength and tragic
weakness!
 Though outlawed in the constitution;
it remains a strong force controlling
upward mobility.
–Changing laws is easier than
changing minds.
–Compare it to the Civil rights
movement in the United States.
Yet Hope Springs Eternal!
 India’s
people is in fact her
greatest asset.
 An optimistic attitude seems
to exist within this country.
 India’s ability to function as a
democracy despite its
massive population, cultural
and religious diversity
provides hope.
To “flatten”?
Provide universally enforced quality
elementary and secondary education.
 Continue to slow the brain drain.
 Improve the quality of its
infrastructure such as roads, water
treatment and sewage, ports,
railroads and airports.
 Improve energy reliability.
 Continue to provide tax incentives to
encourage foreign investment
including manufacturing.
 Maintain peaceful political posture, in
particular with Pakistan.

Sources


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In Spite of the Gods: The Strange Rise of
Modern India by Edward Luce
The World is Flat: A Brief History of the
Twenty-First Century by Thomas L.
Friedman
Planet India by Mira Kamdar
The Trouble with India, Business Week,
3/19/07
www.prb.org
 www.countrywatch.com
 www.forbes.com
 Trip to India –World Affairs Council of
Houston (March 10-20, 2007)
 Prepared by Jeff Cherry
