Archive for May, 2007

The Myth of the New India

May 4, 2007

INDIA is a roaring capitalist success story.” So says the latest issue of Foreign Affairs; and last week many leading business executives and politicians in India celebrated as Lakshmi Mittal, the fifth richest man in the world, finally succeeded in his hostile takeover of the Luxembourgian steel company Arcelor. India’s leading business newspaper, The Economic Times, summed up the general euphoria over the event in its regular feature, “The Global Indian Takeover”: “For India, it is a harbinger of things to come — economic superstardom.”

This sounds persuasive as long as you don’t know that Mr. Mittal, who lives in Britain, announced his first investment in India only last year. He is as much an Indian success story as Sergey Brin, the Russian-born co-founder of Google, is proof of Russia’s imminent economic superstardom.

In recent weeks, India seemed an unlikely capitalist success story as communist parties decisively won elections to state legislatures, and the stock market, which had enjoyed record growth in the last two years, fell nearly 20 percent in two weeks, wiping out some $2.4 billion in investor wealth in just four days. This week India’s prime minister, Manmohan Singh, made it clear that only a small minority of Indians will enjoy “Western standards of living and high consumption.”

There is, however, no denying many Indians their conviction that the 21st century will be the Indian Century just as the 20th was American. The exuberant self-confidence of a tiny Indian elite now increasingly infects the news media and foreign policy establishment in the United States.

Encouraged by a powerful lobby of rich Indian-Americans who seek to expand their political influence within both their home and adopted countries, President Bush recently agreed to assist India’s nuclear program, even at the risk of undermining his efforts to check the nuclear ambitions of Iran. As if on cue, special reports and covers hailing the rise of India in Time, Foreign Affairs and The Economist have appeared in the last month.

It was not so long ago that India appeared in the American press as a poor, backward and often violent nation, saddled with an inefficient bureaucracy and, though officially nonaligned, friendly to the Soviet Union. Suddenly the country seems to be not only a “roaring capitalist success story” but also, according to Foreign Affairs, an “emerging strategic partner of the United States.” To what extent is this wishful thinking rather than an accurate estimate of India’s strengths?

Looking for new friends and partners in a rapidly changing world, the Bush administration clearly hopes that India, a fellow democracy, will be a reliable counterweight against China as well as Iran. But trade and cooperation between India and China is growing; and, though grateful for American generosity on the nuclear issue, India is too dependent on Iran for oil (it is also exploring developing a gas pipeline to Iran) to wholeheartedly support the United States in its efforts to prevent the Islamic Republic from acquiring a nuclear weapon. The world, more interdependent now than during the cold war, may no longer be divided up into strategic blocs and alliances.

Nevertheless, there are much better reasons to expect that India will in fact vindicate the twin American ideals of free markets and democracy that neither Latin America nor post-communist countries — nor, indeed, Iraq — have fulfilled.

Since the early 1990’s, when the Indian economy was liberalized, India has emerged as the world leader in information technology and business outsourcing, with an average growth of about 6 percent a year. Growing foreign investment and easy credit have fueled a consumer revolution in urban areas. With their Starbucks-style coffee bars, Blackberry-wielding young professionals, and shopping malls selling luxury brand names, large parts of Indian cities strive to resemble Manhattan.

Indian business tycoons are increasingly trying to control marquee names like Taittinger Champagne and the Carlyle Hotel in New York. “India Everywhere” was the slogan of the Indian business leaders at the World Economic Forum in Davos, Switzerland, this year.

But the increasingly common, business-centric view of India suppresses more facts than it reveals. Recent accounts of the alleged rise of India barely mention the fact that the country’s $728 per capita gross domestic product is just slightly higher than that of sub-Saharan Africa and that, as the 2005 United Nations Human Development Report puts it, even if it sustains its current high growth rates, India will not catch up with high-income countries until 2106.

Nor is India rising very fast on the report’s Human Development index, where it ranks 127, just two rungs above Myanmar and more than 70 below Cuba and Mexico. Despite a recent reduction in poverty levels, nearly 380 million Indians still live on less than a dollar a day.

Malnutrition affects half of all children in India, and there is little sign that they are being helped by the country’s market reforms, which have focused on creating private wealth rather than expanding access to health care and education. Despite the country’s growing economy, 2.5 million Indian children die annually, accounting for one out of every five child deaths worldwide; and facilities for primary education have collapsed in large parts of the country (the official literacy rate of 61 percent includes many who can barely write their names). In the countryside, where 70 percent of India’s population lives, the government has reported that about 100,000 farmers committed suicide between 1993 and 2003.

Feeding on the resentment of those left behind by the urban-oriented economic growth, communist insurgencies (unrelated to India’s parliamentary communist parties) have erupted in some of the most populous and poorest parts of north and central India. The Indian government no longer effectively controls many of the districts where communists battle landlords and police, imposing a harsh form of justice on a largely hapless rural population.

The potential for conflict — among castes as well as classes — also grows in urban areas, where India’s cruel social and economic disparities are as evident as its new prosperity. The main reason for this is that India’s economic growth has been largely jobless. Only 1.3 million out of a working population of 400 million are employed in the information technology and business processing industries that make up the so-called new economy.

No labor-intensive manufacturing boom of the kind that powered the economic growth of almost every developed and developing country in the world has yet occurred in India. Unlike China, India still imports more than it exports. This means that as 70 million more people enter the work force in the next five years, most of them without the skills required for the new economy, unemployment and inequality could provoke even more social instability than they have already.

For decades now, India’s underprivileged have used elections to register their protests against joblessness, inequality and corruption. In the 2004 general elections, they voted out a central government that claimed that India was “shining,” bewildering not only most foreign journalists but also those in India who had predicted an easy victory for the ruling coalition.

Among the politicians whom voters rejected was Chandrababu Naidu, the technocratic chief minister of one of India’s poorest states, whose forward-sounding policies, like providing Internet access to villages, prompted Time magazine to declare him “South Asian of The Year” and a “beacon of hope.”

But the anti-India insurgency in Kashmir, which has claimed some 80,000 lives in the last decade and a half, and the strength of violent communist militants across India, hint that regular elections may not be enough to contain the frustration and rage of millions of have-nots, or to shield them from the temptations of religious and ideological extremism.

Many serious problems confront India. They are unlikely to be solved as long as the wealthy, both inside and outside the country, choose to believe their own complacent myths.

The whole problem with the world is that fools and fanatics are always so certain of themselves, and wiser people so full of doubts.

May 4, 2007

“The whole problem with the world is that fools and fanatics are always so certain of themselves, and wiser people so full of doubts.”
– Bertrand Russel

problem of poverty in india

May 4, 2007

Why is Infosys buying so much land?

May 4, 2007

Why is Infosys buying so much land?

July 25, 2006

Ten thousand employees work in the twin buildings for Bell South in America. More than 5,000 work in a single office complex for AT&T. Then why does Infosys need thousands of acres of land? If Wipro and IBM can work out of rented offices in Bangalore, why can’t Infosys?’ writes an angry blogger about Infosys.

It is not just bloggers, many people in Bangalore say they fail to understand why the software giant is acquiring land not just in Bangalore, but all over India.
Infosys is today said to be the largest owner of land among IT companies in India, and not everyone is happy about this. Last year, former prime minister H D Deve Gowda took on Infosys, levelling charges of ‘land grabbing’, accusing the company of doing little for Bangalore’s growth as an IT hub.

So why does Infosys need so much land?

Officially, Infosys says the company believes in building its own facilities to enhance productivity and maintain a young, collegial culture for the organisation.
Infosys’ global headquarters and campus at the Electronics City, Bangalore, is the world’s single largest software development facility among IT services companies. The company has large campuses and facilities at various development centres in India.

These centres are equipped with the latest technology and solutions for enterprise networking, office productivity, collaborative software engineering, and distributed project management. They also include facilities for ongoing education, fitness, sports, and multi-cuisine cafeterias.
How many acres of land does Infosys own?

The company declined to reveal the figure, saying it is “in the silent period before the quarter results.”

But rough estimates — provided by sources at Bangalore-based builder Sobha Developers, the real development firm that is in charge of executing Infosys campuses — indicates that the company owns around 4,000 acres of land across India, where it has built, and is continuing to build, huge campuses.

“Is Infosys a real estate company or an IT firm? I fail to understand why they are greedy for land,” says agitated social activist K Krishna Raghav, who supported an agitation by farmers who protested against the Karnataka government’s decision to give land to Infosys reportedly at a throwaway price in Bellandur, a village on the outskirts of Bangalore.
“Why does Infosys need lots of land? Why do they need a golf course at their campus when people do not have living space in Bangalore?” asks Raghav.

Two years ago, Infosys came under attack from villagers in Bellandur who alleged that the IT major was buying wetland at rates much lower than prevailing market rates.
According to the villagers, the price of land in the Bellandur area ranged from Rs 40 lakh (Rs 4 million) to Rs 1.5 crore (Rs 15 million) in 2003. But the Karnataka Industrial Areas Development Board agreed to sell 100 acres to Infosys at a uniform rate of Rs 9 lakh (Rs 900,000) per acre.

In Bangalore, Infosys owns around 1,000 acres of land. The company employs nearly 25,000 people in itsBangalore development centres.

“Does Infosys need to provide more than 1,500 square feet of office space per employee?” asks Reghu Kumar, a Janata Dal-Secular politician in Bellandur. “They have built a golf course on their campus while people do not have any place to sleep in the city,” said Kumar, whose party, the JD-S, rules Karnataka in alliance with the Bharatiya Janata Party.

The second largest Infosys campus, after Bangalore, will be in Hyderabad. The company is building a huge campus in the city spread over 550 acres of land. Infosys already has a campus over 50 acres in Hyderabad. Early this year, the Andhra Pradesh government sold 550 acres of land to Infosys at Rs 12 lakh (Rs 1.2 million) per acre: a low price in booming Hyderabad.
Infosys officials say the company is acquiring so much land because it is strapped for space. The company these days is building an additional space of 31,76,400 square feet at various development centres across India.

So where, in India, is Infosys building space?

Bangalore: The Electronic City is the company’s global headquarters. It is the world’s single largest software development facility among IT services companies.

Two software development blocks of 426,000 sq ft with 4,130 seats and a Multimedia Centre of 26,000 sq ft with 110 seats have already been completed at the Bangalore centre.
In addition, a software development block of 196,000 sq ft with 2,500 seats, a food court of 61,000 sq ft, an employee care centre of 264,000 sq ft and a multi-level car park of 310,000 sq ft are under construction. The existing capacity at the Infosys Bangalore campus comprises 20,84,836 sq ft with 14,465 seats.

Pune: Last year, two software development blocks of 250,000 sq ft, with 2,400 seats, were completed in Pune. A food court of 50,000 sq ft and two software development blocks of 374,000 sq ft with 3,000 seats, are under construction.
Together, the Infosys campuses in Pune have a built-up area of 848,647 sq ft. with 5,931 seats.

Bhubaneswar: A software development block of 95,000 sq ft, with 800 seats, and an employee care centre of 100,000 sq ft, have already been completed. Currently, a software development block of 139,000 sq ft, with 1,300 seats, is under construction.
The campus has a built-up area of 384,000 sq ft with 2,000 seats.

Chennai: An employee care centre of 75,000 sq ft has been completed. Currently, the campus has a built-up area of 496,317 sq ft with 2,976 seats. For the second campus in Chennai, work is under construction for two software development blocks of 250,000 sq ft, with 2,400 seats and a food court of 50,000 sq ft.

Hyderabad: A software development block of 154,000 sq ft of 1,100 seats has been completed. Civil works are in progress for the Enterprise Solutions University, including employee care facilities, of 300,000 sq ft. Currently, the campus has a built-up area of 616,000 sq ft with 3,965 seats.

Mysore: The 441,000 sq ft Global Education Centre, capable of training 4,500 professionals at a time, an employee care centre of 110,000 sq ft, 2,350 residential rooms of 110,000 sq ft and a food court of 36,000 sq ft, have been completed.

Two software development blocks of 420,000 sq ft, with 4,200 seats, 258 residential rooms of 141,900 sq ft, a food court of 39,000 sq ft and a multiplex building of 56,000 sq ft are under completion. Currently, the campus has a built-up area of 2,206,630 sq ft with 1,734 seats and can train and house 4,500 employees.

Mangalore: Infosys is buying 25 acres of land in Mangalore for expanding. Plans to invest Rs 300 crore (Rs 3 billion) in the Mangalore centre, which has topped in customer satisfaction and employee satisfaction among other Infosys centres.

The Mangalore centre, which celebrated its 10th anniversary, recently has grown from 20 employees in 1995 to more than 1,600 employees currently, servicing over 42 clients across the
United States, Europe and the Asia-Pacific region.

Chandigarh: Work is in progress for a software development block of 330,000 sq ft with 3,100 seats, a food court, a health club and employee care centre of 1,74,500 sq ft.

Thiruvananthapuram: Interiors have been completed in the leased space of 22,000 sq ft, with 220 seats. Infosys has acquired 50 acres of land to build its own facility in Thiruvananthapuram.