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.
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.