I’ve returned to India exactly ten years since coming here the first time and the changes are striking. From a western perspective, India has become much more liveable, with consumer options multiplying like rabbits.
The day I arrived, one of the girls I was staying with needed to go shopping in anticipation of a move back to the US. We went to three malls over the course of the day and each time, I was shocked with the new options. Instead of gaudy and often laughable takes on western fashion (garish appliques, ruffles, and bows in all the wrong places), I found a variety of European and American stores in enormous, clean, bright shopping centres.
Then and Now: How India Has Changed
In 2003, Mango was the only store where you could get current fashion at western middle class(ish) prices. There wasn’t much between the bazaar and the high-end. Now you can find stores like Marks and Spencer, Sunglass Hut, Bath and Body Works, Levis, Wrangler, Puma and Reebok. There are even real supermarkets. I used to have to tip a Dubai importer to get cheddar cheese and tortillas, go to the street market for fruits and veggies, and settle on the limited choices at one small import grocer. Now everything can be found in one store. As far as restaurants go, the choices are endless, and the quality is high. Today we had an Italian lunch and dinner at Chili’s. It used to just be McDonald’s and Pizza Hut. Though various state governments make it pretty difficult to run a bar or lounge, the few that I’ve seen had a decent gender balance and look like places I would want to hang out.
Retail Options ≠ Development, but consider this…
Before you take a critical eye to my superficial observations about retail options, know that I understand that the existence of a few nice shops is a short-sighted way to judge India’s progress. However, it does make a difference for many of the educated people that typically innovate and drive growth. Although India’s huge economy makes it an attractive emerging market, the business climate in here is pretty difficult. If it’s hard to do business and it’s hard to live, there isn’t a lot of incentive to be in India if you have more comfortable options elsewhere.
More simply, these difficult conditions lead to brain drain. I’ve just come from Silicon Valley and Seattle and the huge numbers of Indians in both places lead me to believe that the trend is a definite outflow of educated people from India. A study published by the National Center for Science and Engineering Statistics found that only 5 percent of Indians who got a Doctorate in the US actually returned to India. I bet more people will take their human capital back to India after graduating if this progress in “liveability” continues.
India and Development
While I’m impressed and excited about all the positive changes here, it’s important to remember that there is still a very long way to go, especially for people trapped at the bottom of the pyramid. According to the World Bank, in 2005, 76 percent of the Indian population lived on less than $2 a day, and in 2010, that number was still high, at 69 percent. I’m aware of the controversy surrounding the “under $2 a day” measure: many point out that in India, $2 is more than sufficient to fulfill basic needs in rural areas, and sufficient in urban areas. In fact, the Indian Government Planning Commission’s report on poverty uses a significantly lower poverty line (about 37 cents a day for rural people, 48 cents a day for urban dwellers) and estimates that in 2010, the poverty rate was 30 percent, declining at the same rate as World Bank estimates. Regardless of which measure you use, that’s a lot of poor people.
Using the more conservative estimates, it’s still 360 million people living under the poverty line. To put that number in perspective, it’s equivalent to the entire population of the United States living destitute poor. Using the US as an example of the best-case scenario of economic productivity, that’s $14 trillion a year of untapped economic potential. Whoa.
Okay, but what are you actually doing in India?
One of the keys to poverty alleviation is education- investing in human capital, that’s why I’ve come to India. For the next six months, I’ll be working as an investment scout for the Pearson Affordable Learning Fund (PALF) and Village Capital sourcing companies for a business incubator and developing pipeline for the fund’s ongoing activities. PALF was started a year ago as the impact investing arm of Pearson Learning. They make minority equity investments in startup companies that create affordable learning solutions. Village Capital runs a unique peer-evaluation business incubator where fifteen companies go through training and mentorship, then vote on each other’s business models, with the two highest ranked receiving $50-$75K pre-committed seed capital.