A Billion On The Move

India story far more complex than China

Arun Maira


India is on the radar screens of international corporations: The economy is now growing at over 8 per cent; Indian stock markets are outperforming markets elsewhere; and Indian companies are buying companies abroad. Earlier this month, 450 strategy advisors to boards of companies in 50 countries arrived in Delhi to check out the India story for their clients. Last year they had visited China.

China makes a much better first impression. Indian airports and roads are chaotic in comparison to the marvels of Chinese infrastructure. The next impression of India for the consultants was further chaos. The morning papers were filled with stories of demolitions in Delhi, traders' protests and the ongoing tussle between the courts and government. Nevertheless, further encounters during the week, beginning with a candid meeting with the finance minister, changed their minds. By the end of the week, they said they were truly impressed, and would recommend to their clients that India may be emerging as a better long-term bet than China.

The FM admitted that the infrastructure was falling short of the booming economy's requirements, and that democratic political processes made progress less orderly than in China. However, he pointed out that India, with its enormous diversity, could not work without democracy. A delegate pointed out the loss in economic efficiency by the clumsy diversion he saw of an Indian highway to avoid a small Muslim tomb that came in its path — something not seen on China's super highways. The minister replied that if the tomb was sacred to some people, then it had to be respected, regardless of the inconvenience to others. That, he said, was the Indian way — the international audience applauded.

During the week, the consultants broke up into smaller groups and visited manufacturing companies and numerous service companies around Delhi. They returned from these visits convinced that Indian manufacturing companies are equal to the best in the world, and that Indian service companies are ahead of the best, creating new business models and setting new standards. Several speakers from the corporate world and government, candidly answered questions regarding regulations of foreign companies, the tangled judicial system, and corruption, and also explained the country's agenda to make development more inclusive. They confirmed that India had miles to go but also painted a vivid picture of a nation on the move
— not merely an economy but also a society. Thus, in the minds of the delegates, the picture of the nation went beyond physical impressions; it went beneath the numbers of economic growth; and looked behind international rankings of competitiveness in which India does not do well. By going deeper, India's real strengths could be touched.

A nation is not merely an economy, and the well-being of its citizens cannot be improved only with better infrastructure. This was revealed in a recent survey by Gallup of citizens' perceptions of well-being across countries. Surprisingly, the survey reveals that Singapore, which is the richest country in Asia after Japan and one of the most efficient and least corrupt societies in the world, scores the lowest in the well-being index. People in Singapore are less satisfied with their lives than people in much poorer and less efficient countries. Evidently, according to the survey, to be respected as a capable and free human being and to have the freedom to make personal choices, parameters on which Singaporeans give their society a low score, contribute much more to people's feelings of well-being than economists seem to realise.

At the same conference in Cleveland, in which Gallup presented their survey, another speaker described a story of Indian women changing the world around them. In Andhra Pradesh, 8 million women are members of self-help groups at the grass-roots level. The groups function autonomously. They determine what help they need from a level of organisation above them. In turn that level, in the village or mandal, determines what it needs from a level above it to fulfil its own role. Thus, from the bottom-up, empowered women are scaling up an organisation that presently engages 8 million women, which is many times larger than Singapore's total population.

India is a story of a billion people on the move, from which some insights may be emerging for economists and business managers.

First, large and complex systems can be, and perhaps must be, moved bottom-up rather than top-down for the movement to be sustainable. Second, if components of the system are human beings who seek dignity and freedom, then they must be agents of change and not merely beneficiaries of change produced by people above. Third, the question to ask is not merely what people want as consumers, but what they want as citizens. Finally, the foundations of a democracy must not be built only upon people spiritedly defending their own rights — which in individualistic societies is often the case — but as the FM eloquently explained in his answer to the query about the highway, it lies in respect for the rights of others.

The writer is with Boston Consulting Group