India Rising

The Boston Globe writes about the exploding growth of Indian cities. What is interesting to note that in a very short time the historic centers of cities are moving elsewhere.

The glittering skyscrapers of Gurgaon, a satellite city that is home to much of India’s outsourcing industry, rise incongruously from the flat dry plains outside Delhi. Genpact, the first and one of the largest back-office call centers in India, employs 13,000 mostly young people, processing credit applications and conducting market research for American corporations such as Pfizer and JC Penney.

India rising

NEW DELHI — The glittering skyscrapers of Gurgaon, a satellite city that is home to much of India’s outsourcing industry, rise incongruously from the flat dry plains outside Delhi. Genpact, the first and one of the largest back-office call centers in India, employs 13,000 mostly young people, processing credit applications and conducting market research for American corporations such as Pfizer and JC Penney.

The company is recruiting new employees at a rate of 1,100 a month. They work all night because of time zone differences; they are trained to ”neutralize” their Indian accents to be more acceptable to customers in England or the United States; and some are even given such western-sounding names as Tom or Susan. ”The person who comes to work for us has never had a credit card, has never been to the US, and has never seen a JC Penney store,” says Vivek Gour, Genpact’s chief financial officer. ”We teach them a lot about the culture to whom they are talking.”

A group of journalists traveling to South Asia recently with the East-West Center, a cultural exchange program, found the call center associates wildly enthusiastic about their working conditions.

Most came from small towns and loved the adventure.

One young man showed off how he had learned to mimic a customer’s Cockney British accent. ”Fifteen pounds?

What a ripoff!” he said to the laughter of his co-workers.

But all around Genpact’s air-conditioned cubicles and conference rooms, it is still India. Water buffalo roam the streets, families live in tin shacks and cook on open fires, dusty children with no shoes beg for rupees, there is garbage everywhere, especially plastic bottles and bags, and the traffic is infernal.

India’s economy is growing at a vigorous 8 percent. It graduates 400,000 engineers every year, and half of its population is younger than 25, which officials forever promote as a national asset. But it will need to sustain that level of growth and more if it is ever to solve its immense social problems, much less face down competition from China, the other billion-person powerhouse in Asia.

India’s advantages are many: an English-speaking population; an open, democratic society; and massive amounts of cheap labor. But the vastness of its numbers also creates vast problems: 400 million illiterates, at least 260 million people living on less than one dollar a day. Education only became compulsory by an act of Parliament last year, and then only to age 14. Plus, a caste system that still prevents social mobility, a tradition of petty corruption, feather-bedding, and whirling-fan bureaucracy, an overwhelmed infrastructure (the airport at Bangalore — heralded everywhere as India’s Silicon Valley– has only two rickety luggage carousels), and intense pressures on water and energy resources all hobble India’s progress.

The Congress Party, which took power in 2004 partly because of disaffection by the millions left out of India’s boom, has passed an ambitious rural employment-guarantee program that promises to give government jobs to one able-bodied person per family, mostly on road, water, and sanitation projects. The plan is being eyed warily by business, which fears it smacks too much of the socialism India left behind in 1991. Executives in the high-tech industry barely hide their disdain. ”The roads built by the government break down after the first monsoon,” said Mohandas Pai, chief financial officer of Infosys Technologies in Bangalore, more than 1,200 miles south of Delhi.

The 80-acre Infosys headquarters is the national showcase of India’s possibilities. It is a green oasis in a car-choked, drought-stricken city, where even the trees are covered with a film of dust. It employs 16,000 people — average age 27 — who ride communal bicycles or golf carts to get around. With its swimming pool, gym club, food courts, and bookstore, it looks more like a college campus than a $2.1 billion corporation. Its employee attrition rate, not surprisingly, is a low 10 percent.

Infosys founder and chairman Narayana Murthy has taken the company from 500 employees and $10 million to 50,000 employees worldwide and $2.1 billion in 11 years. The company got its big break during the Y2K panic, when it provided the computer technicians to fix the glitches that threatened corporate data worldwide. Despite its obvious importance to India, 98 percent of Infosys revenue comes from other countries.

Relations between India and the United States are getting stronger, fueled by such business opportunities, and by immigration. The United States issues more visas to Indians than citizens of any other country except Mexico. When President Bush visits India this week, there will be plenty to discuss with Prime Minister Manmohan Singh besides the nuclear agreement that would allow India to receive US technology for its civilian nuclear industry while remaining outside the Nuclear Non-Proliferation Treaty. That agreement is hung up on details. Still, Nicholas Burns, the US undersecretary of state who has been shuttling between Washington and New Delhi to iron out the differences, has said improving ties with India will be the most important foreign policy initiative of the Bush administration.

When India gained independence from Britain in 1947, Winston Churchill predicted it would never hold together. With 1,640 languages and dialects, 75 political parties, and countless religions, the idea of India-ness seems hard to fathom. India’s relative stability may be its most admirable achievement.

That stability is forever being challenged by India’s troubled neighborhood — Pakistan, Bangladesh, Burma, and Nepal are all bordering countries — and by internal pressures exacerbated by a still-expanding population. Even Murthy of Infosys agrees that all those young people India presents as such a great resource could drag the country down if illiteracy, poverty, and disease are not reversed. ”The demographic dividend could become a demographic disaster,” he said during our visit. Only if India finds a way to reconcile growth and equity can its moment as a true world power arrive.

Published in the Boston Globe February 26, 2006

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One Comment

  1. Legend of Ganesh March 2, 2006

    “Even Murthy of Infosys agrees that all those young people India presents as such a great resource could drag the country down if illiteracy, poverty, and disease are not reversed. ”The demographic dividend could become a demographic disaster,” he said during our visit. Only if India finds a way to reconcile growth and equity can its moment as a true world power arrive.”

    Agree. Population growth can be a benefit or a bane, but it almost invariably hurts a country when the highest population growth occurs among the poorest, least literate sections of the population in a manner that outstrips the country’s ability to provide for them. It would be of tremendous benefit for India to institute an effective family planning program nationwide that brings the fertility rate closer to replacement level. Population would still grow at a decent clip, but at more manageable levels so that social services could catch their breath and meet their health and employment needs. This is one of the Indian government’s greatest failures in the midst of other economic successes– the failure to provide adequate, voluntary nationwide family planning to bring the birth rate down to more manageable levels. Without improved public health and access to adequate family planning resources, India’s economic gains will be wasted, and we’ll lapse right back into 3rd World destitution again.

    “The United States issues more visas to Indians than citizens of any other country except Mexico.”

    True, but most of those Indians are invited on temporary H-1 visas and return to India after a short while, whereas most of the Mexicans stay in the US. That’s actually one of India’s resources, that our diaspora maintains close links to the home nation.

    “the nuclear agreement that would allow India to receive US technology for its civilian nuclear industry while remaining outside the Nuclear Non-Proliferation Treaty. That agreement is hung up on details.”

    But the stipulation of that treaty is that India basically give up its nuclear weapons aspirations and allow the nuclear facilities to be inspected all over the place. The reason it’s hung up on details is that the US Congress is hardly sanguine about it– in their eyes, India is already the world’s largest Muslim country (passed Indonesia by most recent stats) and growing, and you can guess what this does to the trust of US Congressional leaders.

    “India’s advantages are many: an English-speaking population; ”

    Eh? Come again? A tiny fraction of India’s population is English-speaking– if you want to get around here, languages like Marathi or Tamil, and obviously Hindi are much more important. For that matter, I’d hope that more Indians are studying languages like Japanese, Spanish, Portuguese, German and French, because that’s where all the new money in outsourcing is coming from. It’s flattening out from the USA– there’s too much political opposition there, and US companies don’t have much more slack to outsource their operations abroad with all the data protection restrictions that the US has operating. Learn some French or Spanish if you want an outsourcing job in 10 years.

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