The sky’s the limit - in every sense

“India Shining.”

The then-ruling BJP’s slogan at the 2004 election neatly captured what, on the surface at least, is a sparkling shift in the country’s fortunes.

The turn of the century has seen India transformed. Barely a decade ago, it was widely seen as a typical, if huge, third world nation: its government choked in bureaucracy, business smothered by state control, infrastructure an embarrassment – and its economy at the mercy of seasonal rains.

Now the long-rolling economic boom is turning the hearts of Mumbai, Chennai and Bangalore into global megacities more like Shanghai than old India, studded with the reflective glass towers of corporate HQs. Annual GDP growth hovers on the edge of double figures; engineering, energy, transport and, above all, software are booming. And India has expertly welded its mastery of the Internet to its imperial legacy of the English language, in order to seize the lion’s share of the world’s outsourcing.

The boom feeds, and is fed by, a rapidly burgeoning middle class, fast embracing the ‘essentials’ of consumer affluence, from cars and foreign holidays to Western-style apartments bristling with the latest electronics.

Indian universities are turning out growing numbers of graduates tutored for life in the global economy: nearly half a million qualified in computing and engineering last year alone. Leading companies talk of recruiting up to 40,000 people a year – each. Those white bodies by the pool in the business districts aren’t tourists – they’re trainees, or managers, even, lured from Europe or the States by salaries well within the grasp of India’s business giants. These have shape-shifted in remarkably short order from state-cosseted dinosaurs to tigerish corporate raiders, pouncing on prey from Tetley Tea to Corus Steel.

Some of the wealth even manages to trickle down to distant villages: farms where family members work in cities or overseas often boast breeze-block extensions, sometimes even a satellite dish. And thanks to the quickfire spread of internet kiosks and mobile phones – with six million new subscribers every month – the rural poor have a better chance of plugging into the wider economy than ever before.

A recent report from Goldman Sachs predicts India’s economy will overtake Italy, France and the UK within the decade; and then the US, and be second only to China by 2050.

And yet… beneath, and occasionally breaking through, that shining surface is a rash of challenges which could yet derail the Indian express.

Pervasive corruption undermines the efficiency of both business and the public sector. The state struggles to provide decent health and security. The energy infrastructure is underpowered and unreliable. Two-thirds of Indians have no access to sanitation, and over 1,000 a day die of diarrhoea alone, along with other easily preventable diseases.

The much-vaunted rising tide of India’s economic surge may have floated some boats, but it has swamped others – and left many high and dry, cut off from the boomzones by distance, corruption or just lack of skills. For all its economic sheen, India languishes at 126th in the world rankings on human development. No wonder the economy is sometimes summed up as ‘Silicon Valley in sub-Saharan Africa’.

The uneven spread of wealth has opened up a yawning rich-poor divide. Land grabs, legal and otherwise, are fuelling increasingly violent protests. Dispossessed or desperate villagers make ready recruits for the Naxalites – a loose array of leftist guerrillas who, inspired by the success of the Maoists in Nepal, are increasing their influence across a swathe of remote rural areas in central and eastern states.

All these problems are being compounded by increasing environmental stress. According to a study carried out by The Energy Research Institute, environmental degradation is already costing India up to 10% of its annual GDP. The devastation wreaked by the 2004 tsunami highlighted India’s vulnerability to climate shocks. And as climate change kicks in harder, so will its consequences for a country already facing growing problems of soil erosion, water shortages and forest loss.

But as this Special Publication shows, between the threatening clouds there are numerous sparks of promise. Economic growth may have fuelled pollution, but it is also seeing a massive expansion in renewable energies. Per capita, India remains a relatively ‘low carbon’ nation, which holds out the prospect of it earning significant wealth via carbon trading. Studies suggest that the Clean Development Mechanism alone could bring in well over $1 billion annually. The success of the mass switch from diesel to compressed natural gas proves that, where the political will is there, local governments can act decisively to tackle environmental problems. And across the country, grassroots innovations in agriculture, energy and water management continue to confound the sceptics.

And there is real potential, too, in the growing co-operation on these issues between India and the UK. The lingering afterglow of the Raj has long been eclipsed by India’s dynamic economy. India is now one of the largest sources of foreign investment into the UK. Over the past two years, foreign direct investment flows from India to the UK have actually exceeded those from the UK to India.

India’s long traditions of self-reliance and ‘right living’, as expounded by Gandhi, and still embodied in the determination and commitment of community leaders and innovators across the country, could be a powerful source of strength to meet the sustainability challenge. Faced with the immense task of tackling, and adapting to, climate change, those traditions are perhaps needed now more than ever. For India, poised at the dawn of what should be Asia’s century, the sky is the limit – in every sense…

Martin Wright, Editor