Observations From India

India is booming.

The evidence is hard to ignore, especially for someone who grew up in the country and now returns periodically. There is a palpable excitement in the air that is borne out of a newfound confidence. Today’s Indians are more driven, more ambitious and more optimistic about their prospects than ever before.

Take for instance, Venkatesh, our maid’s oldest son, whom I’d last seen as a thin, shy boy of 12. 20 years ago, he would have most certainly followed his mother into menial labor. Today, despite being a high-school dropout, he makes a comfortable living working for a sticker company. Now 21, he told me he plans to start his own sticker-making business in two years. His younger brother, thought to be the more enterprising of the two, is completing high school and plans to pursue engineering.

It’s a narrative you encounter everywhere, from the busy executive tap-tapping on his Blackberry to the taxi driver negotiating side deals on his cell phone as he navigates through the traffic. Seemingly, a 9% economic growth rate has transformed the characteristics of an entire nation. It’s not just the people who’ve undergone a metamorphosis; entire cities are gearing up for a makeover. It’s hard to drive through an Indian city without marveling at all the new construction. In Tamil Nadu’s capital city, Chennai, gleaming new buildings, from malls to IT parks, have risen from once-dilapidated government structures. The city is now home to a magnificent eight-story, state-of-the art library that looks more like a five-star hotel.

The growth isn’t restricted to the urban metros. Once-sleepy, second-tier cities like Madurai and Coimbatore are modernizing their cities and airports to meet international standards. In Coimbatore, situated to the southwest of Chennai, construction cranes are busy at work everywhere and brand new four- and five-star hotels now dot the city’s landscape. Not five years ago, making an annual trek to Chennai just for “shopping” was a well-established tradition for Coimbatorians. That’s no longer the case as the biggest brands, both local and international, have set up shop in town. A humungous mall has made its way to the city center and plans are underway to bring in a new Apple store to the city’s main shopping district. (Times of India’s new weekend edition had a great article on similar trends in smaller cities around the country.)

India’s soaring inflation seems to have had little effect on people’s spending patterns, which has dramatically transformed during this decade. For years, Indians valued savings and austerity. A booming middle class now has the money to spend and isn’t shy about spending it. Restaurants, theaters, and shopping malls are packed, even on Sunday nights. Audis and Hondas are commonplace on the Indian road. Six day wedding celebrations, even among the generally more conservative and sober South Indian communities, are now de rigueur. An American-style culture of consumption pervades the middle class, pushed along by a dazzling array of choices and by aggressive marketing campaigns using Bollywood stars. It’s little wonder then that American and European brands are falling over themselves to set up shop in India. According to the Wall Street Journal:

“Luxury brands in India by all accounts are set to grow in coming years. Current estimates show an increase in the size of the Indian industry from $3.5 billion in 2008 to $30 billion in 2015. Make a conservative estimate and suppose that people who can afford such products are only the top 1% of income distribution: that would be a little over 10 million customers.”

Of course, in India, the consumption and progress go hand-in-hand with wrenching images of deprivation. The government believes that a 9% growth rate is necessary to alleviate poverty, but time and again, I could not help wondering – how are they planning on sustaining this growth –both economically and environmentally – with a population of 1.3 billion and growing?

For instance, every city we visited (four in all) suffered from massive power shortages. Systematized daily blackouts have become a way of life. In Coimbatore, the electricity board has a somewhat disciplined system of cutting off  power for different neighborhoods at different times. Such shortages are having a deeply negative impact on industries and businesses in the area – one shopkeeper told us that in addition to the added cost of running his own generator for five hours a day, he also had to contend with lost sales as customers fled his stiflingly hot, non-air-conditioned store.

Additionally,  the concept of “recycle and reuse” – once an inherent part of the Indian household – has all but disappeared. Unlike Western societies, there seems to be little awareness on an individual level of how unbridled consumption impacts the environment. We saw few programs – government or otherwise – promoting a more sustainable way of life and the “green” word, so ubiquitous in America, seems missing from the Indian lexicon. Furthermore, among the rich and the upper middle class Indians, multiple cars – one for each family member- are now quite common. These are not the the eco-friendly small cars (think Tata Nano) that had the world abuzz, but gas-guzzling SUVs and luxury cars. Last year, India’s environment minister, who called the use of SUVs “criminal” said that the transport sector is expected to contribute 15 per cent of the greenhouse gas emissions in the country in the next 15 to 20 years.

Rising fuel costs and greater demand have also led to a surge in inflation – currently at nearly nine percent. Food prices have shot up tremendously, a heartbreaking occurrence for a country with abject poverty. Not surprisingly, the hottest topic of conversation in India when we visited was the price of onions, a staple of Indian cooking. People were in disbelief that they had to ration this common vegetable. A share trader we met quipped that if she had invested in onion futures, she might have become a rich woman by now.

Overall, observing today’s India evokes an alternating mixture of despair and heady optimism. At the face of it, her problems seem insurmountable and yet, incredibly, her citizens are rushing forward with a glint in their eye that suggests that they know where they want to be – and they’ll figure out a way to get there.