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Mises Economics Blog

A glimpse of today's India

February 1, 2007 5:59 AM by Jayant Bhandari | Other posts by Jayant Bhandari | Comments (16)

I am in Bhopal, visiting India after almost three years.

I arrived very early in the morning of 27 January 2007. I took the train from Delhi to Bhopal. At Delhi train station, I stood at the front of the counter in the middle of the cold night for 1.5 hours to buy my ticket; the seller was there all this time, chatting away and drinking tea with others, without recognizing the presence of those lining up. When he got around to selling the ticket, he found several mistakes in my (train-ticket) application form. I faked as much courtesy as I could and did what he wanted.

(I will no longer be traveling by train and for sure, I will be using "servants" at my parents' for all outside work that I can avoid doing myself. Indeed, food, tea and water is automatically coming to my desk as I write this.)

At Delhi train station, heavily armed, uncivil paramilitary personnel with their dirty hands were checking everyone's bags at the entrance. I went in unhindered through the "exit" gate. Really, I think terrorists don't achieve much because they are even more stupid than those in the state.

Through my train window, the countryside looked as wretched as ever, if not worse. Absolutely nothing positive seems to have happened since I last took the train on this route more than a decade back. I saw garbage and rotting water-puddles everywhere. Plastic is more a part of the landscape than greenery is. The air is much worse, mostly I guess because vehicles on the roads have multiplied. I did not see any sign of increased manufacturing activity.

What was once the nicest city in India, Bhopal is a complete madhouse.

Its train-station, which once got a prize for the best in India, smelled of a sewer - everything from trains' lavatories drop straight onto the tracks. So this is what you expect when the army of men that clean the tracks slack. The station was ridden with literally millions and millions of flies. Many people grumble about the loss of Bhopal's eminence and beauty, but as usual, fortunes made based on vagaries of bureaucrats/politicians in power, are unsustainable. Bhopal was the favorite city of Indira Gandhi. When she died, Bhopal started to die.

For a research work for an article, I went to the Union Carbide factory site from Bhopal train station, as I did not want to return to that area again. The factory is badly rusted. The site was never cleaned up properly. I don't think there is any way to stop people from trespassing into that plant, as I partly did. The walls have crumbled. There are squatters everywhere. This area had to be out of bounds for people for a few centuries, because of toxicity in the earth. New cases of victims keep coming up, because the state has failed to secure this site. There are tens of massive petrol storage tanks nearby, owned by state-owned companies, with residential buildings all around them, starting barely a few meters away. The state should have moved these tanks. It never did, even after such a big disaster. India is always a micro-millimeter away from another catastrophe.

The state owes me compensation money from the 1984 gas tragedy. As I refused to grovel, I never got my money. To help me understand what the situation with bureaucracy and corruption is like today, for the article I am writing, I am trying to get my money.

Moving on...

There is certainly more money in India - a result of development taking place in certain pockets in Bangalore, Gurgaon, and Hyderabad. And also as a result of bubble created by irrational speculative activities of people.

Prices of properties in Bhopal and stocks have gone to the moon, without much fundamental support. Stocks have gone up partially because there is no longer any long-term capital gains tax on it, but mostly because some people think that India has become invincible and that stocks will now always go up. Property prices in an area near Bhopal has gone up six times within the last month for the simple reason that the state declared that it was going to "encourage" IT investment there. People never lose trust in the state! A property my dad bought in an obscure location 10 years back has gone up 15 times (dollar to Indian rupee ratio has stayed comparable). And its appreciation is showing no signs of slowing down. The same is happening with property all over in this area. I think (economic) structural defects in India are increasing horrendously. I wonder what will happen, if and when this bubble bursts.

People in Bhopal, mostly a city of bureaucrats and politicians, show off their power and money by creating tremendous noise and pollution, and by being rude. Girls, it seems, have started to think that this is the way to behave to express that they are free. A house five houses away from my parents' place has been converted into a wedding reception house. I have closed all the doors of our house, but the music is so loud that I would prefer it to be lower even if I wanted to hear it. Fireworks is falling on our roof. Perhaps, a thousand people will attend the reception tonight. There is a huge parking chaos outside. Tomorrow morning all the leftovers will be unceremoniously dumped on the side of the road.

Most of the people around here are very "powerful" people. They have complained, but nothing happens. Not necessarily because the owner of the wedding house is even more powerful. It is the way the system works - it pretty much always pays to be a crook. Despite all this, if I were the owner or the host, I would worry about the bad impression such a conduct would leave on my guests. For sure such a thought does not cross anyone's mind. I have always found most Indians lacking a very basic sense of fairness, and respect for other people's space and property. This is the primary reason why I emigrated and what I think is the fundamental reason why India is so wretched. I was, of course, sick and tired of fighting all the time. And, I always ended up looking like a fool.

Funnily, one of the persons now in pain from the existence of the wedding house is the person who was getting his house constructed when I was in Bhopal three years back. The construction work was going on 24 hours, giving us a reason for those days not to sleep peacefully.

Educated Indians (who in general are pro-western) are getting arrogant. They have a habit of comparing how much better India is in relation to America. In yesterday's Hindustan Times, a top Indian newspaper, there was a poem which said something to the effect: you are white, when sun shines on you, you go pink, we are black, when sun shines on us, our skin sparkles, and blah-blah-blah. A top headline said that Goldman Sachs believes that India will be ahead of America by 2050. They don't realize that all drivers of India's present growth are in America. And GDP is a useless figure; they should compare GDP per capita. The landing, when it takes place will probably be hard financially; and I really hope psychologically.

Lives of the very poor - perhaps 75% of India - seems to have taken a turn for the worse. The poor people have perhaps mostly found no avenue to increase their earning power, at the same time the small minority that has started making more money (in some cases, as much as a good Western salary plus hardship allowance and a possibility of not paying taxes) has created inflation in what are basic needs. A daily wage female worker in Bhopal still gets about $1 per day - nominally not very different from what it was 5 years back. A male get about 20 cents extra.

Piggybacking on the IT revolution, a minority has made fortunes. The poorest 75% are eagerly waiting for a sweat-shop revolution, the only way their lot has a chance of improving.

What is ironically contributing substantially to controlling inflation and improving the quality of lives is imports from the much-maligned China. Yes, even India is importing big volumes of Chinese goods.

At the margin, India is creating ripples in the world market, and creating opportunities to make money, but I don't think, looking holistically, India is booming, as the media says.

There is tremendous police and military presence everywhere, mostly because 26 January was a national day. When I look at what these guys do and get away with, those in the state in Canada look like gods to me. A few days back, I wrote to my Indian university yahoo-group that among the worst terrorist organizations in the world is the Indian army. Even from me they did not expect this. I don't think there are too many people eager to meet me in Bhopal.

Now something positive...

There is a hugely positive undercurrent in India, in the long-term the most important one in my opinion. A section of the society is becoming aware of its rights and is aggressively fighting for it. There is a growing number of business people who are extremely clever, doing an absolutely marvelous job and are very conscientious; despite all the odds. Earlier, you had to be a complete crook to be a businessman. It is clear that India is out of a vicious cycle.

Comments (16)

  • optimist
  • lets consider a scenario:

    there is a crisis in a small family, which is showing no signs of improvement. a youngster decides to abandon the crisis to pursue his interests and moves on to a different place. he acquires some sort of "high value education" which makes him think that he has the so called right to comment on all issues. for some personal interest of his, he comes back and is shocked to see that his family has worsened badly, still he is not bothered. he pauses to appreciate the minor improvements which have happened in the city, which he thinks is a magic occuring in the city.

    now what is one of the cause for his family's increased woes?? (isn't the person invariably responsible??)

    ppl expect societies and countries to change by itself, they fail to recognize that they are an integral part of "itself". with higher ego, they feel they have right to criticize anything and everything, though they have any idea what is the problem. they are not concerned about the causes leave alone, even thinking about possible solutions!!

    every country is plagued with its own problem which are extremely difficult to solve at times. what makes that country great, is the way ppl come out of that situation, and that needs ppl who have faith and confidence to think the unthinkable and find a solution out of the impossible conundrum. if it were only for the ppl who only know how to criticize, no wonder the country degrades.

    if you really want to give a glimpse of india to the world,

    tell them something which is innovative which is happening so that others can replicate the same

    tell them its problems, but also tell them why the problem still remains that way. if you dont have any idea, atleast find out how ppl r trying to solve it

    in case you donot have anything to tell about the first two points, then its not "a glimpse of india" but "a glimpse of how much you can comprehend india".

    thankfully you are not in india and trying to add value to the nation. india will stand on its own, with the help of ppl who see the "possible" in "impossible".

    pls share with us, in case u add some significant value to the nation in which you are residing.

  • Published: February 1, 2007 8:13 AM

  • Jasmeet
  • The article seems to be written to pander to stereotypes, to make it easy to publish -- which seems to be the main goal. It only talks about superficial experiences without giving any insights. I believe that if you did some real research, you could have easily discussed balanced and in depth, from a libertarian perspective things like following --


    Things that improved in last 10-15 years


    a) Phones/cell phones once the services were freed from the state control. IMHO they are better and cost less than 1/10th of US phone services.


    b) Roads -- once state allowed private parties to build them and pay for them using tolls


    c) Media/ Bollywood -- once state allowed them to be get loans and investments from banks and institutions. In all parameters (tickets sold, # movies made etc. ) except amount of money made, it has become much larger than hollywood


    d) Software industry which by the time the state understood enough to start regulating had already grown beyond their control.
    and many more...


    Things that have not yet improved as much due to state control--


    a) Agriculture sector: Too many restrictions by the state on how to sell, where to sell and land size etc.


    b) Water/Sewage infrastructure -- again under state control so much slower improvement


    c) Power infrastructure -- same as above -- though some cities have privatized and shown improvement.


    d) Railways -- slow improvement as they are under state monopoly

  • Published: February 1, 2007 9:53 AM

  • David C
  • I noticed on the economic freedom rankings, India has been improving every year, while China, after an initial growth spurt, has pretty much stagnated for the last 10 years.

  • Published: February 1, 2007 10:21 AM

  • Gaurav Ahuja
  • Jayant Bhandari is absolutely right on the money. The case with Bhopal's rather unexpected rise in property has also happened in Delhi N.O.I.D.A. and Bombay. Rail stations have not improved in many years and probably have got worse since the British raj/rule ended. GDP and GDP per capita is a relatively useless number. GDP per capita in India is now supposedly 3,700 dollars. I was told even 1,500 dollas is a lot of money for a year in India by multiple people who have lived in India and are living there. Let me also that even the rich do not have central heating all the time. Central air conditioning is usually confined to businesses. India is a miserable and awful place even if you are rich. That is why even upper class people emigrate to places even in Africa! And for Jasmeet here are some stats for you
    Unemployment rate:
    7.8% (2006 est.)
    Population below poverty line:
    25% (2002 est.

  • Published: February 1, 2007 10:29 AM

  • Black Bloke
  • Shouldn't this have been a post that said "Click here for more" or "Full Article", instead of taking up so much space on the blog page?

  • Published: February 1, 2007 10:48 AM

  • MCLA
  • "there is a crisis in a small family"

    A nation is not a family. A citizen is not a member of a family with obligations to "give back" to the family. Optimist, your idea of a nation is basically collectivist. Rest of your comments just follow from there.

    PS: I live in India. I hope I have earned the right to comment on India.

    Cheers!
    MCLA

  • Published: February 1, 2007 11:30 AM

  • L
  • I can attest to Jayant's observations of India after traveling there for 3 1/2 months. I could handle the trash, open sewage, constant harassment by panhandlers and rickshaw drivers. I also saw much beauty and kindness, but I will never, never forgive India for how the men treated my wife. I began to think India was a nation of sexual predators, incapable of civilized behavior. Until they recognize the rights and dignity of 50% of their population, the curse of poverty be upon them. Of course, any criticism of India will be met by rabid nationalists with a chip on their shoulders, but we all need to look honestly at our respective cultures.

  • Published: February 1, 2007 1:05 PM

  • acudoc
  • Please don't show this article to Dubya, our fearless leader. The Decider may decide that it is in our national interest to invade India in order to clean up the bureaucracy and dispense, via legislative decree, the benefits of the American way of life on the Indian people.

  • Published: February 2, 2007 2:10 AM

  • Philip Lehar
  • The crowds at the railroad station! The property boom! The market surge! The boondoggles! The money on the street! The thousands at the wedding reception parking their shiny new cars all over the street! The noise! The music! The fireworks!

    You have a lot more fun than people here in Boston. Canada was OK when I lived there, but isn't it boring?

  • Published: February 2, 2007 5:20 AM

  • jav
  • Why is Union Carbide not responsible for cleaning up the huge mess it created due to its negligence. Do you want your government to be responsible for cleaning up a mess, that say Exxon created?

  • Published: February 2, 2007 11:37 AM

  • Sione Vatu
  • What a mess!

    Interesting that India is recognised for poverty, filth, bureaucracy gone mad and corruption even by people who have never been there. One thing I've noticed in my dealings with many Indian nationals is their complete and utter self-absorbtion to the exclusion of all else. It has been even been said that it pays to count one's fingers after shaking hands on a deal with such people! Luckily not all are like this but stereotypes tend to have an obervation around which they nucleate...

    In the end India is a tragedy of poor ideas put into practice. Until the ideas are revised the outcomes will not alter much. So the best and brightest will simply have to up and leave. Life is too short to be fighting against uncivilised crooks the whole time.

    This was a courageous essay contribution by the author. I wish him well in his work and life.

    Sione

  • Published: February 2, 2007 5:50 PM

  • Peter
  • jav: I wondered about that, too!

  • Published: February 2, 2007 6:11 PM

  • Jayant Bhandari
  • Jav/Peter:

    The state confiscated the plant in 1998 and banished Union Carbide from entering it. So the responsibility of cleaning up the plant is now that of the state.

    There is a lot more to be said about the utter apathy and corruption of the state regarding compensating gas victims. The office - in fact, there is a Minister for gas tragedy affairs - is a swamp of fraud and corruption, as I am witnessing these days.

    When I went to the office two days back, I waited about an hour before being allowed to talk to a junior officer for half a minute. An old woman of perhaps 80 years who was there before I arrived was made to wait. Why? This is socialism in practice. The old woman was too weak to be any threat. Even I was not much of a threat as I did not go there with any contacts - you are asked a question to this effect every time.

    Here are a few more snippets:

    According to the laws that existed in 1984, companies could get away with murder. The reason is simple Union Carbide was an anomaly - most Indian companies were in the hands of the state.

    After the gas disaster, the state made an utter mockery of India’s sovereignty and took the case to the USA. The US court quite rightly refused to accept the case.

    It was social pressure in the US that made Union Carbide pay $470 million. Can you guess what the state did next? The state created a law, Bhopal Disaster Gas Act 1984, to usurp the money.

    Most of the people who died in the accident were those living in the buffer zone (green zone) around the Union Carbide plant. Indeed, merely a few months earlier, the state had passed a law to make these people legal owners of where they lived. Union Carbide’s requests to preserve the sanctity of the buffer zone were ignored - the squatters were a vote bank. The then Chief Minister of the province, Arjun Singh, is now a senior minister in the federal government.

    I often think why Indians do not take their politicians and bureaucrats to the public square and lynch them. The reason is simple: the general Indian is as bad in his behavior and conduct as the Indian politician/bureaucrat is.

  • Published: February 2, 2007 8:51 PM

  • Bhopale
  • Hi Jayant,

    Writing to you from Bhopal - yes the madhouse. Yesterday they found numerous eggs of dinosours near a place called Indore, not very far off from Bhopal. I think with your fossilised ideas, hatered and "everything from India sucks" line of thinking, you are an eligible candidate to claim those eggs as your own. I encourage you to do so at your earliest.

    Hope you will never come back to India, otherwise their might be people here who could implement your ideas of public lynching. You are a fine ambassador of India, keep up the good work

  • Published: February 5, 2007 10:36 PM

  • Jayant Bhandari
  • Bhopale:

    I can understand that you do not accept my conclusions, but I would have expected you to refute some of the facts I (and others) have written.

    Here is more…

    I was in the TT Nagar Market in Bhopal yesterday (5 February 2007, around 6 pm). Bhopal Mayor with his entourage was on one side of the road, while on the other side, inside the glassed police booth, police was badly beating a child, who was perhaps 6 years old. They were slapping other children as well.

    What opinion do you want me to have for a state that perpetrate such ugly violence? And what respect do you want me to have a society that ignores/condones it?

    Of course, you go a step further and justify such acts!

    There is absolutely nothing fossilized about whatever I have written.

  • Published: February 6, 2007 6:27 AM

  • bhopale
  • Your article is full of claims based on your flights of imagination, as you do not give any data to support your statements like 75% Indians are poor, or Indian Army is the worst terrorist outfit in world. I do not think there is any use in pointing you towards Indian Census data, given your inclination to lynch the bureaucrats at the public square.

    You said - There is certainly more money in India - a result of development taking place in certain pockets in Bangalore, Gurgaon, and Hyderabad. And also as a result of bubble created by irrational speculative activities of people. Well, you could have added Chennai, Coimbatore, Mysore, Pune, Mumbai, Indore, Bhubaneshwar, Kolkata to it. The bubble of property prices has not been created by "irrational speculation", but a very down-to-earth mundane lack of space. You might be aware that although India occupies only 2.4% of the world's land area, it supports over 16% of the world's population. For your information - Bhopal plans to have an International Airport, developed by a private company/ies selected by Government Of India (Sigh! again) by private bidding (http://economictimes.indiatimes.com/News/News_By_Industry/Transportation/Government_to_invite_bids_from_pvt_cos_for_non-metro_airports/articleshow/1439141.cms). Adjacent to this there would be an IT Park, for which at least two companies, Genpact (http://infotech.indiatimes.com/Tech_News/News/ITeS/MP_gives_go_ahead_to_Genpact_delivery_centre/articleshow/401985.cms) and Netlink (http://www.bpowatchindia.com/news/news1204.asp) have already been confirmed. Given your apathy to anything government (Indian, that is), could I suggest that you please reconsider using at least the word "irrational" if you insist on continuing with the word - speculation.

    About the stock exchange, you start your article saying that you returned to India after three years. At that time the Sensex (Index of Indian stock market) was at the levels of 3000 (check here http://www.valuenotes.com/krc/krc_ecoreview_20jan07.asp?ArtCd=103896&Cat=&Id=), which is crossing the levels of 14000 now. As they say "the proof of the pudding is in the eating."

    Let me finally talk about Union Carbide, Bhopal and the Indian Government. I would like to quote here Mr Satinath Sarangi. He was a engineer who turned to an activist, and take heart, does not have anything to do with the government or the bureaucrats. He says, "Right after the disaster, on the morning of December 3, a first information report, was lodged in the local police station. Warren Andersen (Google him if don’t know him) came here on December 7, 1984. He was arrested the same day by the state authorities. Soon, he was released, but he signed a bail bond, which was for 25,000 rupees, which is about $500. He was released on bail...he promised to be present wherever and whenever he was directed to be by the court. He was charged with manslaughter, grievous assault, assault, killing and poisoning of animals. Anywhere between ten years to life imprisonment. Since then, he has never come back. (The company was also charged with crimes) along with eight individual Indian officials....The court sent a summons to Union Carbide and to Warren Andersen. Proclamations were published in the Washington Post in 1992. Andersen refused to go to India. And Union Carbide refused to appear.” This is from an interview, which can be found here (http://www.corporatecrimereporter.com/sarangiinterview.html).

    Dear Jayant, Satinath Sarangi could have very well complained, “inside the glassed police booth, police was badly beating a child, who was perhaps 6 years old. They were slapping other children as well.”, and could have asked “What opinion do you want me to have for a state that perpetrate such ugly violence? And what respect do you want me to have a society that ignores/condones it?”. He chose not to, he chose to stay where he was needed, where he could make a difference. He could have come back after three years and ask for his money from Indian government, money as low as $300/$500 for a life spoilt by sheer negligence. They make today’s India. Or people like Ramesh Ramanathan, a young man sets off to America with a Masters degree from a prestigious Indian institution (the BITS, Pilani, in this case) and enters Yale for an MBA degree. Successfully lands a job with a global finance giant, Citibank. Seriously studies the institution’s banking methods, and suggests changes that make the bank richer by millions of dollars. Steadily climbs up the corporate ladder, and lands an assignment in London with the same employers, only, he has now become managing director, and is within sniffing distance of becoming CEO. He gives it all up, returns to India and to his hometown, Bangalore. Lays low for about six months, studying the system, trying to see where he could use his expertise and comes up with a people’s movement called ‘Janaagraha.’. Check it out at http://www.deccanherald.com/deccanherald/feb012004/sh1.asp.

    What can one expect from people like MCLA who “live in India” and believe, “A citizen is not a member of a family with obligations to "give back" to the family.” No obligations my friend, we have always said “Nindak niere rakhiye …”. India will grow inspite of you people

  • Published: February 7, 2007 4:55 AM

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