While the temperature outside is soaring here in Delhi, the economy has definitely cooled -- far more than anyone predicted. Today's headline: India's growth rate has fallen to a disappointing 5.3%. When we moved here 18 months ago, India was still celebrating its global boom, despite the bust just about everywhere else. Our flat in a leafy part of sought-after South Delhi cost us an eye-watering sum each month. (Eye-watering because it looks like a communist dormitory; feels like a brick oven in summer; and lacks even such basics as piped gas, clean drinking water or heating/cooling systems. Never mind decent carpentry, a modern kitchen, safe electrics or likeable decor.
Today, with the Indian rupee at its weakest, the good news is that the rent for our brick oven -- which is at least surrounded by parks and trees -- has dropped by several hundred pounds. But if living in 'modern' India has taught me anything, it's that very little has actually changed.
Sure there are some bright spots: IT for example... and pharmaceuticals (are drug companies anywhere doing badly?) But on the whole, India is nowhere near the business-friendly place it's touted as. And the past decade of growth has failed to produce even the basic infrastructure or innovation necessary to sustain any emerging economy.
Take our expensive brick oven flat. A quick tour and I can point out electrical sockets that keep failing (or literally melting); expensive Indian-made pots and pans whose handles keep falling off because the screws won't hold. Our Usha-Brita water filter has great Brita filtering technology... but is let down by the cheap Usha bit. It leaks, it breaks, it clogs. Today, I tried banging a simple tack into my son's bedroom door to hang up a lovely painted tile. The first nail bent on the first impact. The second nail held longer, but nearly split the cheap plywood door right down the middle. Other screws and nails rust on the way home from the shop. The doors of our expensive custom-made wooden sideboard swell shut in summer and swing open involuntarily in winter.
The Indian-made three-tier steel dish rack in my kitchen is steadily, week-by-week, losing its bolts. They seem to spontaneously undo themselves. Any moment now, I anticipate wet glasses, mugs, plates and spoons going into free-fall and smashing to a million pieces on the marble counters and floors.
If you can't rely on the nails or a screws a country produces, is there really much hope?
A pity. Because around the time of my birth, India's demographic indicators were not far off countries like South Korea. But while South Korea invested heavily in education, India has not kept pace. Hence you'll find plenty of illiterate or semi-literate maids, nannies, drivers, gardeners, guards, and even hungry young graduates desperate for jobs. What you won't easily find are smart self-starters who can manage a profitable business.
And you'll be hard-pressed to find an area of Indian life (except the Delhi metro) that is free of corruption or bribery. The rich use bribery as a tool; the poor are strangled by it and many, many public servants and private individuals in between profit handsomely.
I hate to see the Indian growth rate plunge from the hoped-for 9% to just 5.3%. But at the same time, duh. It doesn't take a genius -- or an economist -- to see that India just isn't producing anything anyone elsewhere in the world wants or needs on a grand scale, unlike China.
Today, the relentless cheerleaders of the Indian economy (the ones who speak impeccable English and are quoted ad-nauseum, often by the western press) could only manage insipid quotes like this one in the New York Times**: “A quiet crisis of confidence is building up,” said Pratap Bhanu Mehta, president of the Center for Policy Research in New Delhi. “There is no certainty over the regulatory regime. There is no certainty over the tax regime.”
The press is guilty of many omissions. But taking as gospel figures on Indian growth is a silly one. India's economic statistics are based on Indian government data. The government surveys only 2% of India's 'official' economy. Add in the everyday stories of corruption, inefficiency and the near-complete lack of a working legal system... and you get a far more accurate picture of India's economic 'growth'... or in this case, the sad lack of it.
**As I've said before on this blog, the NYT remains one of the best outlets for covering the big picture in India. The quote in their piece only serves to illustrate that India's economic cheerleaders are finding today's growth figures rather hard to swallow.