Income trickle in India

On Sarah Lacy's blog

2011-07-04T23:18:00.000-07:00

Sarah Lacy is the Silicon Valley based author of "Brilliant, Crazy, Cocky: How the top 1% of entrepreneurs profit from global chaos."

I came across her book while visiting my company Indiangenie's webpage on Just Dial website. (India's local search engine, but it is more of a sophisticated yellow pages.) An article (India's mighty microeconomy) by Sarah Lacy on the Fast Company magazine appealed to me and i was almost about to buy her book on Flipkart.

Her travel across several countries in order to grasp what entrepreneurship is about is commendable and i would subscribe to most of her findings and terminologies. The article 'India's mighty microeconomy' is also a very good assessment of what is going on beneath the famed Indian macroeconomy.

I, however, would disagree to what she says on her own webpage on India.

" I do try to make sense of the clear disconnect between people saying things have gotten better, who also complain bitterly about India's problems. And this isn't subjective. I cite hard statistics that show the quality of life across most metrics in India is improving at just 1% per year, while more than 2/3 of the country lives in villages with no access to basic roads, water or electricity and less than 1 million people-- out of $1.1 billion-- benefit from high paid R&D and call center jobs.

Those are just facts, Vivek, I didn't make them up. And Indians and India's American boosters have to face them if India is going to unlock the economic potential of its huge population. Just talking up the good of India would have been highly dishonest as a reporter and wouldn't help the entrepreneurs trying to create real change in the country."

Sarah you can be assured i do not know who Vivek is and i am not trying to defend him. I am also not a fanatic nationalist who would just want to hear good things about his country. The problem, however, with the above understanding is that it is incomplete and not accomodative of the historical background. As you rightly mention, what you have are 'mere facts.'

A growth of 1% per annum is also an achievement given that this was not possible a few years back. The number of people with water or electricity is increasing each day even when its true that the absolute numbers of the ones deprived are high. I belong to a small town in Ara and even though my house is connected to the grid we depend on solar electricity. I am aware that it's a million or two fortunate people to find high paying jobs but one cannot ignore hordes of people that get employed in trying to service these 1-2 million people in their houses and in their offices. The trickle down is significant and you can see the flow even if you pick the life of one of these office going guys. Beyond the offices, the avenues to make money in agriculture, and as you very well know 'in the mighty microeconomy' are huge.

Harping about the level of deprivation then is no news and no novelty. It has been there for long and is not expected to vanish in a minute. The news is that there is hope now. We can hope that ten year down things would have slightly ameliorated compared to the four decade long lull.

Our cook has some ambition!!!!

2011-04-15T07:43:00.000-07:00

She cooks really bad food. One day she made "gobi" in cooker. No it wasn't meant to be a gravy.........The other day we had to remove excessively burnt "jeera" from the paneer sabji before we could eat it. Some times when we come back from office we feel as if it's a 'langar' at our house because the food cooked would last us six days.

Well our experience of staying forever away from homes has taught us not to expect much from cooks but she is exceptionally extraordinary. :)

However, she is a great mom to an almost sixteen girl, and a to be matriculate boy. She is not a cook (and cleaner, and washer-woman) by choice however,.....well perhaps nobody is. Her hubby was a cabbie but one fine day stopped going to work.

She had to pull her son out of the private school and use the cheaper government school. However, as has been found in research even the poor in India prefer sending their children to private schools. "The Beautiful Tree" by James Tooley captures this empirically across a number of nations.

So, our cook started to work - and experiment on us - to sustain her family and to send her son to a private school. Remarkably, this is not just a street-side private school. It's some kind of a convent on the air-force road in Gurgaon. And she pays more than what i used to pay for my day schooling at MontFort in Delhi.

This, however, would have been a dream a few years back. To find so much work (employment) in Sukhrali Village of Gurgaon would have been impossible. With the job boom in Gurgaon, there is work for so many of cooks, taxi-drivers. Some would like to quickly jump out here and say 'so u're happy seeing these people as serving you, is this what u call progress?' No, certainly not but this is how it begins. And i can see the signs of it happening.

Geeta's (our cook) son would go into a better profession. Although he is studying currently he also has a part time job in one of the hospitals in Gurgaon where he has to do some normal checks in procurement etc. His 2k is a big contribution in the family income. And the girl child .......she has almost completed her studies .....plus a vocational IT course and is hopeful of landing a fair enough job. Well this is progress in society according to me. Wouldn't you agree?

Lakshmi in Vaishno

2011-04-11T06:17:00.000-07:00

Vaishno Devi is perhaps one of the most well known pilgrimage centers in India. Many people visit this place in the state of J&K every year.

I went there as a tourist and explorer and less so for any religious sentiment. In fact since i am a Sikh, many people from my faith might get offended if i suggest that i had any religious inclinations.

I enjoyed the foggy weather, the cold breeze, and the trek to the shrine. What i also enjoyed was the presence of an active (relatively speaking) economy in that remote place. There were a number of opportunities for locals and others to earn money (lakshmi) for their living.

As soon as you begin the trek (or even before) there are small shops/kiosks selling prasad (offerings), head covers, sticks to help you walk comfortably, water, raincoats, and Gulshan Kumar's bhajans.

Then you have the mules/horses/porters that help the infirm or the time-constrained to cover the trip easily. (* I was slightly disturbed to see some visitors being carried in carriages lifted by four men on their shoulders. On a steep terrain it is a very difficult task.)

For the ultra busy, or for those looking to experience something new, helicopter services have also been launched. Pawan Hans and Deccan provide these services on all days except when it is foggy.

Interestingly the markets are captured not just by the small business but also by big chains. I was amazed to see numerous Nescafe kiosks (Nestle) doing brisk business. A popular vendor was selling ice-creams as well. On the half-way stop a Cafe Coffee Day (see picture) store was competing with the local jalebi-samosa sellers.

Mobile phones were ubiquitous and the networks were fair enough. The horse masters were using their phones to listen to music while carrying out the extremely boring and mundane task of ferrying passengers on the same route day-in day-out.

I got to visit the shrine in the night. Visit would be an exaggeration. I got a glimpse (you are shoved in and shoved out of the holy caves) of the shrine and what struck me was that it was a shrine not just of Vaishno Devi but also of Lakshmi.

And i found this reality interesting. Lakshmi is present in the Vaishno Devi Shrine and she is present literally with the natives of the remote hills. The shrine is the main source of income for these natives who find it difficult to get employment in a state badly hurt by insurgency.

True that pilgrims have sustained this area for long, but the level of activity there today is much higher. It is good to see the micro-elements of a to be super-power trickling to the remote regions.

I also wonder if shrines can be opened up in all the remote places in India!!!!

Isaac's growth story

2010-01-07T22:35:00.000-08:00

His father was a truck driver. He didn't want to study much.
The car on the right (Blue Indica) is his. He also owns a Force van which is out on a trip to Jaipur.
He owns a plot which is appreciating these days.
He likes to support an orphan whose husband doesn't give her sufficient money for household chores.

On my trip to Aurangabad in January 2010 I met Isaac (the guy in white Kurta above). He was my cabbie for two days and took me to ajanta and ellora caves.

He has driven an auto, a taxi, and a bus. And he has spent some time driving others' vehicles but now drives his car only. And he makes it a point not to go on very long trips because these can be tiring. He has also stopped driving during Ramzan because fasting and driving can be very demanding.

He worked hard to buy his own vehicles but because of meddling into securities lost his entire savings. He thought he would then take a job but his living standards required a better income. He doesn't drink or gamble, but he loves non-vegetarian food. Eating dry fruits is a must for him. So he took a loan from one of his brothers who had studied sincerely and holds a government post.

With the borrowed money he again bought a second hand vehicle, and worked extra hours to reach the pre-fall status.

That Aurangabad is a tourist destination helps him, but his vehicles travel across India. I asked him how does he survive with the high food prices, and increasing number of taxis around. He said "dhandha bhi to barha hai" (business has also grown.)

And it is true. People are travelling more than ever. Tourism is growing. And this is because the economy is doing well. People have money over and above what is needed for food, clothing, and shelter.

This is a downward flow of money. Not necessarily to the most educated and the most skilled person.

How economic wheel alleviates poverty.

2009-12-30T02:25:00.000-08:00

My father frequently mentions that the income gap is rising and the poor is becoming poorer. I however contest his ideas and suggest that today is relativley a better environment for anybody in India to grow, and to reduce his/her socio-economic gap.

Apart from the arguments that i give to him to suggest that things are not so bad, yesterday Shekhar Gupta (Indian Express) gave me a good anecdote to use while moderating a discussion with Tata and Murthy at the Times Entrepreneurship Summit (TES.)

He was recollecting his visit to Infosys where he asked his audience a couple of questions.

q. How many of you have come from an English medium background?

a. not all hands went up.

q.How many of you went to the Mayos, Loyolas, and Doons?

a. only a few hands went up.

I can't recollect all the questions that he mentioned or the exact answers that he received, but the point that he was trying to make is that today we have many people from not so great backgrounds that have the opportunity to go far.

A similar point is made by Raghuram Rajan in the book "Saving Capitalism from Capitalists." He notes that it is only in democratic capitalistic society that there exist so many rich people that were born in families with humble means.