The Trouble With Businessweek

68 Comments

Businessweek, in its cover issue, “The Trouble with India” (cover picture of the stereotypical Indian elephant to the left ) paints, in my opinion, a predominantly bleak picture of the country’s infrastructure and dabs it up with terror tales of companies knee-deep in the Indian quagmire.

Infrastructure is one of India’s biggest problems and in that respect the cover piece is “on the ball”. No problems there. However in its haste to spell out all that is wrong with India as an investment center, the author resorts to what should now be known as Western “Sominism” (after New York Times’ Somini Sengupta).

At one place, the article says:

In December, a bridge in eastern India collapsed, killing 34 passengers in a train rumbling underneath.

Right. However this omits a very important fact, a fact present in the BBC report of the same accident.

The bridge, built 150 years ago, was being dismantled when it crashed onto a carriage at Bhagalpur station in the eastern state of Bihar.

In other words, the accident was caused by criminal negligence of the demolishing crew and not because of poor infrastructure (the fact that an old bridge was being demolished shows that there is at least someone doing something about the problem).

At another place, the article says:

In the late 1990s, Enron, GE, and Bechtel spent a total of $2.8 billion building a huge complex near Mumbai capable of producing more than 2,000 megawatts of electricity. But a government power authority set prices so low that it was uneconomical for Dabhol to operate, and the whole deal fell apart.

Which would have been fine had it not be for the fact that it is strictly not correct. The truth is that the government of Maharashtra, no doubt influenced by the $20 million that it got as “educational gifts” from Dabhol, entered into a contract in which it promised to buy the high-priced power produced by Enron, irrespective of whether there was any demand for it and even if cheaper power was available from its own power stations, thus guaranteeing DPC (by contract) an estimated 32% after-tax return. [For a more detailed deconstruction of the deal, please read this]. So tipped were the scales in favour of Enron were things that the deal was determined to be “one sided” in favour of DPC by that doyen of capitalism, the World Bank.

So it was not really the government power authority ripping off Dabhol but the other way round.

But Businessweek couldn’t be bothered by that evidently.

There are tales of businesses whose shipments were held up for 5 days due to an “epic storm” —things that we presume would not happen in more advanced parts of the world like say New Orleans —but let’s not harp on these.

At least, there was no tone poetry in this piece of this form: (original article here by Somini Sengupta) [an excellent analysis of her word-smithing here]

In the belly of this island city, the textile mills are overrun by weeds and their chimneys point at the sky like so many sooty elephant snouts.

And thank the serpent God and the elephant King for that.

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68 thoughts on “The Trouble With Businessweek

  1. As you pointed out, the article is right about pointing out India’s infrastructural weakness.
    I would go ahead and add three more looming black clouds that hover over “shining India”.

    1. Population explosion
    2. Environmental meltdown
    3. Energy insecurity

    Somini Sengupta, btw, is heavily lobbied by the likes of Angana Chaterjee of California).
    But, this Soministic article, I think is motivated more by lobbying by competing economies like China, than by actual concerns.
    China, it seems has been rudely shocked at India becoming the Asian billionaire club leader and a PR retaliation was expected.

  2. Arnab:

    Agree with you on most of the points except the one about the train mishap. I would count the demolition crew as part of the infrastructure. You cannot have roads, bridges, network communications, etc. without people manning them and if they goof up the infrastructure collapses.

  3. @Prasanth: Thank you

    @Rishi: Hmm.

    @Soumya: No cannot agree with you. Firstly the fact that BW skipping that detail is important in itself. And a bridge collapsing on its own is one thing and people already demolishing a bridge not taking proper precautions is very very different. The process in place to ensure the integrity of the infrastructure *was* working (the bridge was being demolished)—-that the crew did not do their job properly is a totally orthogonal issue.

  4. The BW article gets it right. In these matters, dense prose is better than the lilting lullabies of Somini.

    The word ‘infrastructure’ is a wonderfully elastic term. We need not equate offering better infrastructure with making Walmart or Hilton’s lives easier, or offering parking spaces for the urban upstart to go for a family outing to India’s Disneyland (yes, they are here in India. Soon nonte phonte, bantool, thakumar jhuli, khirer putul, amar chitra katha, chandmama will make way for the barbie, and donald duck. cho chweet). Infrastructure is also not synonymous with ‘speed’.

    In sum, the last two lines in the BW article has said it all: “Unless the nation shakes off its legacy of bureaucracy, politics, and corruption, its ability to build adequate infrastructure will remain in doubt.”

    We need many schools, hospitals, universities, rural welfare and politicians with a great deal of enterprise, and expertise. A system that appoints Shatrughan Sinha as Union Minister for Shipping is plain stupid. Politicians need to be paid highly. An US senator gets $ 1,65,000 salary and perks.

    GB, I see your insistence to remain positive. That’s crucial. At the same time, we need to be grounded, be aware of any signs of irrational exuberance (mostly driven by the stock market, and finance people who see the world through spreadsheets), and stick to the knitting.

    In all these matters, whenever in doubt, turn to India’s darling son – Narendranath Dutta, better known as Swami Vivekananda – and follow his path. Action, not argumentation. The latter works for people whose career depends on text weaving.

    If you want to know India, study Vivekananda. In him everything is positive and nothing negative. – Robi Thakur

    Behold, Vivekananda still lives in the soul of his Mother and in the souls of her children. – Sri Aurobindo

  5. BusinessWeek and NewsWeek have given kindest coverage of the India Shining story in the last 3-4 years – almost always constructive and upbeat. Let us be thankful for their constructive attitude and objectivity (thanks in part to some capable NRI editors) – when other papers were still skeptical; the editors (Zakaria was complimented for his contribution in NRI divas) and most reporters have never patronized their coverage that would have compromised credibility. (I have religiously followed the coverage owing to mu subscription.)

    Somini Sengupta (and her S.Asia colleagues in NYT) has done a phenomenal job – compared to her NYT predecessor (another NRB, but blinkered) – in bringing to light issues of great depth and variety. @2 major India stories per week (!!), the NYT team (just like MSNBC) have done better than most others in Western media (less said about CNN, Wash. Poast, et al. the better) to bolster India’s image considerably (a survey supported the improvement last week). For the first time, there were reports on, say. the cell phone boom in India without reference to its malnourished children or burnt brides.

    Utmost germane stories ranging from Ganga pollution to Golden Quadrialateral to skewed sex ratio to rise in diabetes to air hostess training institutes, Somini et al. have produced a series of beautiful instances of non-overboard yet kind and timely journalism clearly unmatched by anything of the kind that appeared alongside in the Indian English newspapers (who generally do not have a tradition of covering a ‘story’ although they ought to own up more responsibility in my view).

    Occasional non-flattery and errors from the above 2 publications notwithstanding, Indians must acknowledge their friends who stood by them at a time in history when change in global as well as domestic perception of Indian people’s accurate status was critical.

  6. Addendum to above:
    By the way, I am quite proud as an Indian that my country’s bad infrastructure, while hardly untrue, is a cause of concern to reporters and reviewers of international business and economy, serious enough to merit cover treatment. This is not a silly spin, but an obvious corollary about a very important upcoming star whose every inadequacy is magnified and researched upon in global media.

  7. @Naiverealist: As I said I have no problem with the message. But I, in my opinion, sensed a tone of negativity in the entire article (the negation of that tone is not irrational exuberance) and I saw what I felt were not entire truths. My point was to point those two out.

    @S.Pyne:

    Kindly do read http://acorn.nationalinterest.in/?p=1550 for a very insightful analysis of Ms. Sengupta’s “neutral” reporting. [I updated my original post with this link too]

    And incidentally, in her review of Parzania she says:

    This film, “Parzania,” is based on the true story of Azhar Mody, or Parzan, as he is called in the film, a 13-year-old boy who disappeared during the riots, which began after 59 Hindus died in a train fire for which a Muslim mob was initially blamed. The cause of the train fire is still unknown, though a number of politically competing investigations are looking into it

    Yes the dark supposition as to Hindus having caused Godhra is there, as per NYT policy.

    The point of my post was to point out some places where I felt the writer was not being forthright …whether News/Businessweek has an agenda against India or is worse than Washington Post was not what it was about. The title “Trouble with Businessweek” was just a play on the title of their piece …if that was what caused the confusion.

    Finally, if you think that changing the truth about Dabhol is “non-flattery” or at best an innocent”error” I will not argue with you over this as it would be at best futile, since we already have our opinions firmly made.

  8. But I, in my opinion, sensed a tone of negativity in the entire article (the negation of that tone is not irrational exuberance) and I saw what I felt were not entire truths.

    Well, I do not want to get into an elaborate defense of my use of a loosely defined term. Read this piece in ET:

    http://economictimes.indiatimes.com/articleshow/1485278.cms

    The fisking of Sengupta’s neutral reporting was interesting. Sen’s Identity and Violence, and Argumentative Indian (AI) has a similar stance. AI was informative, but when it comes to the opinions, the book is irritating to say the least. Sen will have a very tough time defending his word jugglery in a public debate with an informed audience.

    I guess that is what happens when people walk the tightrope, and maintain multiple loyalties. Isn’t it tempting to be remembered by posterity for ‘statesmanship’, and ‘love for humanity’ across national boundaries.

    Location matters. Career too.

  9. I do think it is futile for me to comment on a 2nd person’s independent view about a 3rd person’s independent reporting, so I’ll restrict to a brief reply. Besides the one dissected here, I have also read numerous other stories by MSNBC and NYT teams on India, and given my own personal study in contrast with other publications (incl. pre-Somini NYT), both of Indian and US UK origin, I would surely recommend the former two over others.

    Well, Somini or any other PIO reporter, despite her Indian origin is clearly non-Indian and professional and has no obvious reason, certainly none emotional, to be more pro-Indian in her S.Asia perception than the rest of her ilk, the general Western media, Yet she has proven to be much better than her own predecessor as well as most others (besides, India’s real progress and real problems have helped her reporting cause).

  10. BW surely doesn’t digest the fact that India is slowly but surely on it’s way UP!
    & That too Inspite of its Politicians..
    Enron didnt need Dabhol to Sink,That it was intrinsically sick was borne by the fact that it went Bust soon after.

  11. @S.Pyne: The supposition Somini has to be unbiased about India/pro-Indian because of her Indian roots is not something I have made. If at all, my experience is that people with Indian sounding names have to bend doubly backwards (or flagellate twice as hard) to convince their Western bosses that they are “of sound mind”. But that is not germane to the topic at hand. In conclusion, whether it is Somini or Simon is moot….for me it’s one more biased NYT reporter.

    @Kailas: Enron’s bust revealed to the world the unethical business practices they were following everywhere…however in India they were the angels…according to BW.

  12. S.Pyne, i am really surprised by your argument. Ur mind is clearly closed. I don’t know why u defend the article and that reporter’s career. Yes, careers are important, but they should not be made out of reporting false info and defaming a country. Yes, she has no pressure emotionally to support India, but also no need to report false things. All these things are part of PR games and it is a clear fact that these people are working under some influence (offered money by competitors, gifts, promotions, or at least publicity). But for real businessmen who think only about business, these cheap tricks do not matter. They invest in places which promise profit.

  13. @Arnab: Either the media goes overboard and screams “India Shining”, or goes overboard and screams “India Sinking”. It makes for a bold headline on the cover and panders to the viewpoint of people who have made up their mind either way.

    A balanced view, with a good look at either side of the story makes for good reading in academia, or in a corporate report. Apart from a few people like you, who analyse and write about news articles, who really cares about objectivity and fairness? Who really has the time and energy to read anything other than soundbytes?

    And after a few weeks, who would remember the report anyway?

  14. People make a general statement about infrastructure of the country.
    One should consider each sector specifically and make then make judgements. If you consider Telecom, India probably has one of the best infrastructures.
    But then , roads and tansportation needs improvement. Though some initiatives are being taken, there has to be significant emphasis on it.

  15. My last bit is a disclaimer: I do not claim or care that Somini, Simon et al. are unbiased (who is?), but post-Somini/Gentleman NYT S.Asia desk has clearly produced some fabulous India stories, with possible bias, such as the one on child laborers (March 4/07 by Gentleman), and I thank these guys for their unmatched (albeit imperfect) quality of output.

  16. “…in short, the period was so far like the present period, that some of
    its noisiest authorities insisted on its being received, for good or for
    evil, in the superlative degree of comparison only.”
    –Charles Dickens, The Tale of
    Two cities

    Infrastructure is surely one vital aspect of India’s many problems. Business
    Week is merely echoing the impatience of the Global Business with India,
    which it continues to hype as the coming super power. Despite there being
    many more reasons besides his neo-liberal reforms for his being shunted out,
    The West and people in other Indian states continue to see Chandra Babu
    Naidu as some sort of progressive reformer (an image he cultivated
    carefully) little realizing that his programs were structured to help his
    own party cadre before development trickled down. Given that Indian Economy
    is doing well, ensuring the inclusiveness of the growth is as necessary as
    growth itself. Western Media places emphasis on problems in delivering
    growth like poor Governance and Corruption at the expense of equally
    important issues like whether we are “growing” in the right way for our
    collective good. But many seem to be happy that Western media is talking
    about India in some manner. Well, they are talking about it because busy
    roads and erratic power affects them more immediately than the absence of a
    school or a hospital which are more important in the hinterland, where most
    of India lives.

    Good to see you writing on such issues once in while, Arnab! It was balanced
    and informative, in a way only good blogs can be.

  17. Yes, a lot is being done on the infrastructure front… but it’s the pace that is worrying. We can’t be so slow… Just look at the roads…

    No point in blaming anyone… just that we all got to do our 100… many of us aren’t… that’s where it all starts… Even the supervisor has to be supervised… by whom?

    There is now a superb highway between Bangalore and Mysore on which it’s a sheer pleasure to ride on… Fine. Just look at the pains the builder had to undergo to get this stretch done… So, many peple to oppose that, one court case after another… and finally… we have the road….

    It’s not that things aren’t happening… sure we have come a long way… things are much faster than what it used to be…. but I feel very bad, when people oppose investment and progress in infrastructure. I just wonder, where we all would have been, had there weren’t so many spoilsports in politics…

  18. “…in short, the period was so far like the present period, that some of its noisiest authorities insisted on its being received, for good or for evil, in the superlative degree of comparison only.”
    –Charles Dickens, The Tale of Two cities

    Infrastructure is surely one vital aspect of India’s many problems. Business Week is merely echoing the impatience of the Global Business with India, which it continues to hype as the coming super power. Despite there being many more reasons besides his neo-liberal reforms for his being shunted out, The West and people in other Indian states continue to see Chandra Babu Naidu as some sort of progressive reformer (an image he cultivated carefully) little realizing that his programs were structured to help his own party cadre before development trickled down. Given that Indian Economy is doing well, ensuring the inclusiveness of the growth is as necessary as growth itself. Western Media places emphasis on problems in delivering growth like poor Governance and Corruption at the expense of equally important issues like whether we are “growing” in the right way for our collective good. But many seem to be happy that Western media is talking about India in some manner. Well, they are talking about it because busy roads and erratic power affects them more immediately than the absence of a school or a hospital which are more important in the hinterland, where most of India lives.

    Good to see you writing on such issues once in while Arnab! It was balanced and informative, in a way only good blogs can be.

  19. I didn’t realise I was posting the same comment again. But why start moderating them?

    [GB adds: Comments go into WP moderation queue when it for some reason suspects spam activity. There is little I can do about it except to approve it once I wake up.Which I have done]

  20. The bridge “collapse” and the Enron story – both nice catches GB. But apart from those blemishes, I thought the article was pretty good and as you said, it presented a realistic picture of the infrastructure story in India. If I had read the article without reading your blog, I am not sure if I would have found anything to disagree with.

    Also, while I agree that the BW article definitely misrepresented the Bhagalpur accident (perhaps deliberately), I agree with Soumya above that the accident still counts as an infrastructure issue. A different kind of infrastructure issue than what BW intended, but still we can’t say that it was human error and hence not an infrastructure issue. Training the people not to make such errors, having adequate security mechanisms so that you don’t accidentally let a passenger train run under a bridge being demolished are all part of building good infrastructure.

  21. @Mohan: Agree with you on the need to include human training and safety as an integral part of infrastructure. Unfortunately, the need to have strict safety norms needs to have a significant increase in the cost of operations. Many manufacturing companies who look at India as a great opportunity for good work at a cheap price,with the full awareness that the cheap price is, to an extent, because of lower standards of Good Manufacturing Practices (GMP) or Environment Health and Safety (EHS). When you try to apply the same western standards of GMP and EHS, the cost rises to almost European/US standards, which is not really desirable to these organisations.

    What these companies (most of whom are realists, rather than the idealism their coporate communications project) really want is the best possible quality at the low price. So I guess that they wouldn’t mind better training and infrastructure, but not at the cost it would take to train people and ensure their protection. If I sound cynical, think about the two French ships that were to be broken up at Alang.

    So even though that railway story is sensational, it hardly will effect FDI into India, unless people conclude that manufacturing will be affected.

  22. I think you’ve hit on a new and important tone that the western media has struck on India. Broadly speaking, in the post-liberalisation era, the western media’s attitude towards India can be divided into three phases. Allow me to dwell on them.

    To begin with — and I’m talking about the Enron era — the tone was ‘these buggers don’t know what’s good for them. Or else they wouldn’t have been quibbling about a gift horse like the Dabhol-Enron project?’. The fact of the matter is that the government and the Indian media, the business media especially, also took the same line — that the unwashed Indian masses don’t know what’s good for them. It took all the robustness of the Indian democracy to swim against this tide to get the govt — already softened by Enron’s ‘education funds’ and Rebecca Mark’s short skirts — to have a relook at the project. And it turned out to be a sweetheart deal. As GB pointed out, the grid had to buy power whether it needed it or not and buy it at a rate much higher than what plants set up at that time (like an NTPC plant) were selling. It was a scam, and given Enron’s track record, that was not solely of GOI’s making; Enron was, to put it mildly, an active abettor.

    After the Enron era, as India bumbled its way ahead, there was this ‘irrational exuberance’ about the Indian genius. The IT boom, obvious BPO strengths, etc., plus a very lucrative stock market, fueled it. The western media was full of it. It was difficult to tell the fortune hunters in India that their optimism was perhaps misplaced. They would accuse such ‘skeptics’ of allowing the past to blur the big picture of growth and miss the great Indian story.

    And now comes the third phase. Mind you, the Indian economy has only done better in the meantime, riding as it is now on a manufacturing virtuous cycle. But the western media has suddenly adopted a school-ma’amish attitude of rapping India for getting ‘too big for its boots’. For instance, when a paper like TOI launched its ‘India Poised’ campaign earlier this year, there were articles in NYT, Guardian, and The Economist, pooh-poohing the campaign. ‘Just step outside the cities of Mumbai and Delhi and see the squalor and poverty for yourself,’ they said. Which was, of course, true. It was no one’s case — I don’t think it was TOI’s either — to deny the poverty or squalor. Every Indian knows about that gaping holes in physical and social infrastructure. But they also feel that with the economy doing well, and with the prognoisis being positive, it was time to roll up their sleeves and get down to fixing these problems. And a positive outlook, like say the ‘India Poised’ campaign, possibly helps in not getting daunted by the enormity of the work on hand. But the western media has read India Poised as India bragging. And going about with a certain viciousness to demolish the new Indian self esteem.

    Why? It might be too much to say that they’re suddenly feeling insecure. But may be they are. After Indian companies start buying up iconic western companies like Corus, which was British Steel, it can trigger fears of the wheel coming full circle. Reliance has set aside Rs 1 lakh crore to buy out Dow Chemicals, the papers say today. And, US think tanks are saying that China and India will be the world’s top economies by 2050. Wonder if this is the larger reason why BW too has joined the counter-campaign to put India in its place?

  23. Exactly the reason why I stopped reading American magazines a long time back. Once upon a time I used to be a regular reader of Time, Newsweek, Businessweek et al But after some time I realized that most of their articles on stuff outside the US were quite biased and many weren’t credible at all

    Though these magazines claim to be ‘global’ they cater to a predominantly American audience. And I think more often than not they write what the American audience wants to hear. The result: a lot of under researched, pro American, anti Rest of the World kind of articles. For example when TIME makes a list of the 100 most influential people in the world, 70-80% of them are American!! While no one denies that America has a huge influence on the rest of the world, this figure is still more than slightly ridiculous

    So why this article? With fears of a forthcoming American recession, the average American would not be too receptive to an article hailing India and China as the new economic superpowers. I guess this is their way of assuaging their readers that their country is going to be the sole economic superpower for a long time to come

  24. @Sayon: Well the problem is that it may act as a source of information/reference for position papers and advisories for investment in India.

    @Aby: Hm.

    @Srinivas:

    The West and people in other Indian states continue to see Chandra Babu
    Naidu as some sort of progressive reformer (an image he cultivated
    carefully) little realizing that his programs were structured to help his
    own party cadre before development trickled down.

    A vital point. Everyone including the Western media tries to analyze election results in a grossly over-simplistic fashion…which is why we have cliches like “vote against reforms”.

    @Nitin: :-).

    @Pradeep: Opposing investment in infrastructure? Which parties are these?

    @Mohan: In software terms, I would think we should distinguish between a company that has no test plan for their software vs one who has an incomplete test plan for their software.

    @Rani: Excellent comment.

    @Guhan: Totally agree with the “world is America” bias of these magazines…understandable because of their customer demographics.

  25. Sominism – worse than Ganashakti’s distortions 😉

    Also, the article mentions the Intel project that was shifted to Vietnam – I know a bit about it and it had more to do with stifling bureaucracy in India and the willingness of Vietnam govt to go the extra yard than power/water issues. Still its hardly flattering for India and getting rid of red-tapism is probably the best we can do improve infrastructure.

  26. BW could have done better than citing these incidents as a case for India’s Infrastructure woes. If you travel by the Tube in London, you will admire the pecision of Mumbai locals.

    My belief is that, if the western world is as populated as say India, then it will do no better in terms of infrastructure, crime, lifestyle, etc.

    If this (Dubai airport shut after accident – http://news.bbc.co.uk/1/hi/world/middle_east/6440747.stm) would have happened in India, people would have started screaming about how the Airports are not upto International standards.

  27. @Arnab: I fear that you overestimate the power of a few reporters to influence the decision making ability of MNCs. I doubt that a few negative reports will prevent these companies from making/ saving money.

    If these reporters were so influential, then the US would have dumped Pakistan long ago and invaded them instead of Iraq.

  28. @ Sayon
    These reporters may or may not be effective in their endevor depending on what they are talking about. They are less effective on issues concerning commerce, because most MNCs have their own risk/benefit assessments that they rely upon.

    However, in issues concerning socio-economics, they are very effective and sometimes damaging.

    Arnab is especially right when he points out that Soministic opinions become part of the reference material for future strategists and policymakers. That also seeps into the higher educational system in the US and irreparably biases intellectual opinion vis-a-vis India.

    A whole generation of socio-politicians and future State Department doyens have been fed with the Angana Chatterjee and Somini Sengupta points of views.

    It takes a lot of hard work, re-education and resources to undo such damages.

  29. @Rishi: Agreed. It takes a lot of time and resources to undo the damage of an article by Angana Chatterjee and Somini Sengupta. But it takes even more time and resources to undo the damage of a project which went wrong because of floods or riots in Ahmedabad or a huge delay in a medicine shipment reaching an analysis lab due to a stupid offical at Mumbai customs. I know, because it’s part of my job to try and prevent that from happening.

    You and Arnab may be right, but in my experience, a year of good results from Indian companies delivering good cost benefit will outweigh a dozen negative reports from AC & SS. And a single drug recall in the US due to fake data generated by a CRO in India will wipe out the goodwill from a hundred rave reviews about the Indian off-shoring experience in any US/European journal.

    None of that condones biased and incorrect reporting though. Nothing does.

  30. According to me three stages are

    1) India could do it – Underdogs !

    2) Hey look new kid on the block !

    3) Kid gloves removed, compare India with any other world class economy.

    When India is competing with US, Europe, China, Japan etc. in manufactring servicves, FII, FDI etc. how you expect Businessweek or Economist or FT to be “softer” on India.

    Now don’t expect “preferential treatment” just because we are new !

    When Businessweek compared India’s infrastructure( or bureaucracy), they did it w.r.t to G8 ( or in same league)

    Now its up to us, with whom do we want to be compared.

    There is saying” Chose the competition before competition chooses you”, I guess Businessweek is helping us out 🙂

  31. Interesting observation, however, let me remind you of something which nobody bothers to check up.

    Enron project was conceived by a vision that with rapid industrialization, power shortage in the most industrialized state would be a problem by around this time i.e 2007. The only problem was the project was mired with controversies but the vision was correct. As this project got entangled more and more with no light at the end of the tunnel. Some smaller initiatives were taken. 2 new smaller power plants were built around Bombay which resulted in Bombay remaining unscathed by the current power crisis currently in other parts of the state. Enron project has been revived as it was just a bad contract the government had signed and so there is a vision in place.

    No one talks about the Golden Quadrilateral initiative taken by the government or the Highway modernization.

    Textile mills in bombay moved out almost a decade ago, right about the time when Manmohan Singh presented his first budget. This was outsourcing principle to its core, cheap and near the source of raw material. Although there were political reasons as well. But Bombay was being transformed into a financial center and reinventing itself from the older textile mill glory days. What do you do with those lands, you redevelop them. The slum demolition project has been converted into slum rehabilitation project. So if a residential high rise is built the original slum dwellers are given flats to stay there. (Wasnt the same thing done in the west and sometimes at worse ways!) So most of the existing slums are being converted into high rises for residential and office purposes.

    But I still believe India is like an elephant. It is smart, it knows what it wants and it has vision. The only problem is it needs huge quantity of food to start working. 🙂 and all the authors as mentioned in the blog and comment are like the proverbial blind men who are touching at different parts of India. Some are ecstatic and others are depressed.

  32. “But I still believe India is like an elephant. It is smart, it knows what it wants and it has vision. The only problem is it needs huge quantity of food to start working. and all the authors as mentioned in the blog and comment are like the proverbial blind men who are touching at different parts of India. Some are ecstatic and others are depressed. ”
    Great Words….Pilgrim.
    GB-U have competition here…….

  33. @GB “If at all, my experience is that people with Indian sounding names have to bend doubly backwards (or flagellate twice as hard) to convince their Western bosses that they are “of sound mind”.

    This is spot on. Exactly what I wanted to say. I have seen so many instances of this happening in my short professional life. Sorry for going a bit off topic but
    –> The same Indian who never follows any rule in India becomes so kind and disciplined abroad
    –> Comes back and talks about “My US, and your India”
    –> As soon as he goes onsite, starts cursing the offshore team and tells the client how unprofessional they are (and how good he is)

    There are exceptions but I have experienced it first hand. I believe in the India story but we have a long long way to go. We as Indians do not believe in our ability.
    For example we have a foreign coach who is implementing ‘process’.

  34. I have read the Business Week article. It is true that all the facts about the bridge collapse in Bihar are not there. Further, the “facts” about Enron (as mentioned in the article), as you rightly pointed out, are totally wrong. But that does not take away the fact that the basic point of the article is valid. In fact, all economists, business people and policy makers in India consider infrastructure to be the number one constraint on India achieving a high growth rate on a sustained basis. Without burdening your blog with more words outlining my thoughts on the problems and prospects of India moving to a higher sustainable growth path, I would rather give here a link to one of my articles:

    http://www.thehindubusinessline.com/2006/11/24/stories/2006112400650800.htm

    In that case only the interested reader may bother to read, others won’t be forced to go through my thoughts.

    Baba

  35. Yeah, Greatbong,

    Such third rate reporting.
    Typical “India is filled with snakes and elephants” reporting. (Damn, I have never ever seen a snake in my entire 20-odd years, living in India.. except in a zoo.. Such stupid assholes.. As if rural parts of Western countries do not have snakes!! Eg. Rattlesnakes in colorado)

    Though on the topic of infrastructure, they might be correct. I believe we seriously lack in infrastructure. Our airports stink, bridges and roads are pathetic, power distribution sucks….
    Overall, the story is true. How long can this growth be sustained without infrastructure. Man, even Malaysia and philippines have a microprocessor fab plant, but not India.

    The inefficiency and negligence of it all. I have seen lot of water and electricity being wasted in this country of ours.. I have seen people keep buses and trucks engine running idle for hours… Fans kept on when nobody is around…

    Dont we even see that even the equipment we use is *inefficient* … Our Heavy vehicles are diesel guzzlers… our electrical equipment consumes more power than is necessary due to lack of maintenance and care… computer monitors on even when not in use for hours…

    We criminally waste electricity and water… and then invest in invertors..

    Around a year ago, I replaced all lamps and tubelights at my rented flat to CFLs, for power saving. No, maybe it wont make much of a difference, but I am contributing my bit. And yeah, California recently made them mandatory over filament lamps for environmental reasons..

    Only if power is costly, people will conserve it. Like with petrol.

  36. At the same time, we need to be grounded, be aware of any signs of irrational exuberance (mostly driven by the stock market, and finance people who see the world through spreadsheets), and stick to the knitting.
    =============

    @NaiveRealist,

    Yep true. A cousin of mine works in an international investment bank. He tells me that as a fund manager, his job tells him to invest in India, because the trend is bullish. If he doesnt, he might lose his job. But as an individual, he might not invest… we still have a long long way to go.

  37. In that Business Week article you will find it is the Government guys like “Gajendra Haldea, an adviser to the federal Planning Commission” stating the problems while it is the Infosys guys (who cornered large tracts of prime real estate at cheap prices from Government) who spell out the vision of New India and are actively striving along with the odd “enlightened officials” to make things better. This is part of the present trend where the Captains of the Industry get proclaimed as the new visionaries, for the precious little they do to the society. This kind of State minimalism suits the MNC’s very well. BW is instrumental in crystallizing such opinion in favor of Business classes not just in the West but among today’s educated youth and expatriate Indians, already disillusioned with the quality of governance in their homeland.

    For people who have given up on rural India, development can only come through sops to Industry, whose technology intensive factories will then hire a few rural people and hype that through BW as employment generation. The real problem is with a Government not doing much beyond inviting Corporates to spur growth and employment outside the cities. Any Government attempt at higher corporate taxes in such climate will lead to a stock market crash, instantly causing a flight of capital. In such a scenario, the only guys not happy are the millions living in the villages waiting for wealth to trickle down the taps of corporate business.

  38. @Shadows – Interesting. You see, economics tells us money is fungible. You cannot tell a dollar from another. True. But dollars do not fly and exchange people’s pockets on their own. People exchange monies. Even if rising India genuflects to shareholder maximization, one needs to map the location of those shareholders. After getting fat with the stock returns (mostly on paper, talk of perception being stronger than reality) where does that particular shareholder spend that money? Pay heed to who owns the shares of foreign subsidiaries in India. Location reigns supreme. And that is not fungible.

    Coming back to the topic at hand, it is important for abstract reason to manifest itself into some concrete things we can touch and feel.

    The problem is basic, you see. Intellectuals, or antels, do not exercise. Go to any US university, you will see hordes of students religiously exercising. Probably they are innocent about world affiars, probably very naive. But there’s much to learn from the positive attitude. There is a reason why in the US they always try to maintain a buoyant atmosphere. The economy needs that. We should simply ignore Somini-s and Angana-s, and remain positive.

    Now shift the gaze to, say, Jadavpur University. No amenities for exercising. The all-knowing, amateur cigarette-puffers, indisciplined, and highly-imaginative students (you can hear their brain working) arguing their way to glory. And the romanticization of arguing has been complete with Amartya Sen preaching us about the virtues of blabbering. What else does the CPI(M) government want? Make another Academy and Nandan, organize film-festivals, and let these antels get into orbit. Meanwhile, the education infrastructure is in shambles. I do not want to sound self-righteous, but that’s the truth.

    Architecture, buildings, roads, hospitals, schools, cleanliness, lane marks on roads, private property rights, entrepreneurship development centers, private/public partnership in universities, energy security, bridges, airports, patent literacy, intellectual property rights for sukto, garbage disposal, law and order. The last one is a crucial category. Instead of labeling the fundamentalist drunkards in terms of majority/ minority, they need to be labeled as law and order nuisances. And the security infrastructure should be able to handle that efficiently and effectively.

  39. @GB: Read your Dad’s article. He is, of course, right — poor infrastructure is not only one of the biggest problems in India, if not the biggest one, it can also threaten future growth unless it’s built/mended soonest. I don’t think the problem lies in BW’s larger point; it lies with the tone of underlying condescension in the way the argument is presented, not to mention the writer’s economy with facts. But I agree that in our irritation with gora superciliousness, we shouldn’t lose sight of the huge problem.

  40. @shadows:

    Typical “India is filled with snakes and elephants” reporting. (Damn, I have never ever seen a snake in my entire 20-odd years, living in India.. except in a zoo..

    Sorry to go a wee bit off topic, but I have seen wild snakes (including Cobras, no less), in Mumbai. Yes, they are rare, but they are there, with the panthers and crocodiles, as are the wild monkeys and peacocks in Delhi. Not that it changes anything, rather, it would be something to be proud of, but just wanted to point that out.

  41. I agree that infrastructure is the greatest & biggest challange that India faces now. This redtape has to go and Indians have to make politicians accountable for their tasks & moneylaundering policies. But another problem that I think needs thought it the attitude of the Indian Public – by that I mena the common man on the road. You see the streets littered with garbage, people spitting everywhere, loud mobile phones & ringtones & wonder how on earth is India going to change to become ‘developed’

    A massive education campaign might be needed to educate and make Indians take pride in their being ‘Indian’.

  42. Captains of the Industry get proclaimed as the new visionaries, for the precious little they do to the society.

    ============

    Srinivas,

    It is NOT the responsibility (legally, but some good industrialists (not from our traditional business families) still do it) of the captains of the Industry to provide water and electricity. Yeah, the very same captains of industry have reached villages with their telephone services, which the govt hasnt been able to do for 50 years !! And Chiddu chides industry for tax breaks and not doing anything for society !

    Just that they employ thousands isnt good enough ??

  43. Sorry to go a wee bit off topic, but I have seen wild snakes (including Cobras, no less), in Mumbai. Yes, they are rare, but they are there, with the panthers and crocodiles, as are the wild monkeys and peacocks in Delhi.
    ================

    anonyMouse,

    Well, yeah, but then there is a forest (borivli national park) bang in the middle of Mumbai, literally.

    Nothing bad about that actually, but that is all the Indian born foreign journalists, see. In fact, some foreign born journos are more balanced and factual about India than such Sominis and Anganas (whoever the hell she is)..

  44. GB & (some) others, I think you are being too hasty in condemning BW. (Apologies for this long reply, btw)

    – BW, like any American media, focuses on international trends which are likely to affect, if not already affecting, US economy, politics & society. Last fall they did a cover story on China’s unethical business practices (http://www.businessweek.com/magazine/toc/06_48/B4011magazine.htm). These are topics that American readers are getting interested in, & I am glad for them. On the whole, while the reporting is for an American readership, there is a genuine concern & a sense of partnership for India. Steve Hamm, who wrote this piece, is not a fly-by-night hack. Last year he wrote a well-received book on Wipro (http://www.amazon.com/Bangalore-Tiger-Steve-Hamm/dp/0071474781). Maybe the omission of the state of the bridge was unnecessary, but it doesn’t disprove the fact that the infrastructure is crumbling, & hence the general absence of safety in Indian railways. As for Dabhol, there are many shades of truth in there. After all, a democratically elected government approved the project. I was watching the documentary on Enron (The Smartest Guys In The Room), which mentioned Dabhol in passing. It will require a separate post from GB to unravell that mess.
    – There have been a few recent stories & postings on India’s weak social & physical infrastructure. Economist had a cover story (India Overheats) in its Feb 3, 2007 issue. It had a tiger instead of an elephant on the cover – http://economist.com/opinion/displaystory.cfm?story_id=E1_RGNJVPD. A friend forwarded me a blog posting from the Daily Telegraph’s (of UK) Delhi correspondent Peter Foster – http://blogs.telegraph.co.uk/foreign/peterfoster/feb07/wealthyindia.htm. There seems to be a cause for concern, which perhaps our Indian media in its advertorial & P3P obsession are either missing or being so close & familiar to the action, don’t notice anything unusual. I reside in the US & can pretend that these ‘gora’ or ABCD journos (though Somini-di was born in Calcutta) don’t know jack. I decide not to, & despite GB’s righteous indignation, I think perhaps it is something to think about. After all, these same papers have given us a good run on its pages which we lapped up & forwarded to everyone. Let’s give them a chance & try to understand their concerns.

  45. I know that Enron is just one issue that you have referred to and I should let it pass. I don’t hold any brief for Enron, nor do I want to shed a silent tear, but as one involved in the power sector must correct the impression that Enron was trying to sell power at high cost. If Enron had been allowed to produce power at 90% plant load factor as contracted for, instead of the 40% PLF, the cost/kWh would have been far less. Stands to reason that if you have bought a season ticket in the metro train for Rs 100/- believing that you will make 25 trips a month, but instead make only 10 trips,the cost/trip will be Rs 10/- instead of Rs 4 that you had calculated it would be.

    Also, Enron had tied up gas supplies from Ras Gas for 25 years for Dabhol, at a price of 2.5$/mmbtu – a price that would make ONGC/GAIL salivate copiously today. At this price, Enron would have supplied power at

  46. @Shadows- Not many informed persons accuse the IT, Telecom sectors of surplus job creation vis-a-vis the larger economy, IT companies like Infosys get glorified for spending a little money for development in a high profile manner. In reality they do so because spending money makes them look good and importantly fulfils the “corporate social responsibility” criterion to avail tax breaks and less because they suddenly developed social consciousness. Telecom Companies are mandated to provide a certain number of connections in the rural areas as per their license requirements( read about Universal Service Obligation Fund). But only Government owned BSNL fulfills the quota while the rest routinely pay the paltry fine and escape the high cost of extending the infrastructure in remote rural areas. Try asking someone from a remote rural area which mobile service works best there. Companies like Airtel, Idea etc. make their millions on urban ignoramuses like you who seem to take their company ads about reaching rural areas at face value.

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  48. Dr VS Rao Director of (Birla Institute of Technology and Science) “BITS Pilani” Hyderabad campus may think that Chandrababu Naidu was wrong in considering Economics as more important than politics. Who told Economics is urban and politics is for rural? Bihar gave importance to politics instead of economics and see the state of affairs there. Bhagavat Gita says that you cannot do good somewhere without doing bad somewhere else and vice versa. Naidu did not mean to do bad for rural and intended to do good for urban. In West Bengal Left Front used to give importance to Rural and win all votes there but used to loose seats in Kolkata city. Naidu’s Urban development with subsequent rural benefits was indeed wise thinking. Success is not to be measured by CM designations, elections fought and seats won but by the enormous obstacles which were overcome and there is no doubt that with Economic Focus Chandrababu Naidu is indeed a success which PIGEON headed fellows have failed to appreciate.

  49. Post script:

    Tom Friedman has been reminding the Americans thru his popular NYTimes column that the Mid East is not the real story of our times; it is happening in the rise of China and India. Along similar lines (of reasoning), I have generally stopped bothering about the habitual bias in the hackneyed Indo/Pak/Kashmir coverage by the Western media since the real exciting stories, the coverage of which really matters today, are mostly about the profound socio-economic transformations in the Indian subcontinent seen thru the outsider’s view – ranging in quality from gems of wisdom to cow-curry-caricature.

    Here, for instance, is a wonderful story, quite a long one at that, which appeared today (‘Paradise, in Contract,’ March 18) in Sunday NY Times written by Somini Sengupta, the chief of its South Asia bureau –
    http://www.nytimes.com/2007/03/18/realestate/keymagazine/318Boom.t71602..html

    Besides the length and the research (you can hardly expect a comprarable effort to appear in an Indian English daily, although possibly in a magazine), there are serious human and industrial observations, touching on both boon and bane with equal sensibility, along with such issues of core relevance around the economic/real estate boom as the pressures on individuals, environment and administration, as well as people’s direct views. To me this makes it a fabulous (India) story, and worthy of Sunday NY Times…

    And possibly why we might in future be thankful for such journalistic pieces that had appeared “at a time in history when change in global as well as domestic perception of Indian people’s accurate status was critical.”

  50. Try asking someone from a remote rural area which mobile service works best there. Companies like Airtel, Idea etc. make their millions on urban ignoramuses like you who seem to take their company ads about reaching rural areas at face value.
    ===============

    I suppose even rural areas have good mobile connectivity now. Not just BSNL, my connection works in rural areas surrounding the city, on the highway, remote villages where the bus stops for a loo break, etc..

    Guess who is the ignoramus..

  51. @Shadows: My mobile works in the city, on the highway, and in many villages on the bus route. However I’ve visited many places, especially in smaller villages and towns where no network is available. Rural connectivity is not as good as we’d like it to be.

  52. @Shadows: If it is still not obvious, and you actually care to form an informed opinion, please google for the current tele-density statistics segregated for rural and urban India given either by the Government, International Telecommunications Union (I.T.U) or those Companies who you think have changed the villages.

    Next time, without “supposing” anything, visit a village which is located a bit further away from a Highway, or surroundings of a city (which is referred as a suburban area). Stay a little while longer than for answering natures call and ask if any companies have created jobs for the villagers there? Besides, a telephone connection may be the index of development for the urban educated Indian living in the information age, but does mere connectivity mean development for the villagers too?

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