Implosion (17 page)

There are thousands of stories of children of poor parents who have suddenly done well in ways that would not have been possible earlier. Ram Lal, the son of a gardener who worked for my family and the
FT
office in the 1980s, is now a well-paid driver and his daughter is a qualified pharmacist in a government hospital. Dinesh Kumar, the 22-year-old son of a poor farmer on India’s border with Nepal, earns Rs 12,000 a month as a trainee with Tarun Tahiliani, one of India’s top fashion designers. He was a porter on Rs 2,500 a month in the INA market, one of Delhi’s main retail food markets, when he began to go to a nearby night school run by Ritinjali, a voluntary organization. There he did a cutting and tailoring course that led him to study graphic design at Delhi University with funds provided by Ritinjali, and he graduated in 2010.

Slim, smart and smiling, with great yet modest self-confidence, Kumar told me that the best he could have expected at the market was maybe to become a shop assistant.
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‘Now I’m designing Western clothes and I want to go abroad and become a big designer,’ he said. He might move somewhere else in Delhi first, hoping to double his salary, but his target is Australia because that is where Amar Nath, another Ritanjili student from the same bazaar, is working as a management assistant for an electrical power company. I had interviewed Nath in July 2005, when he was 17, for
Fortune
magazine.
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He had never been to a conventional school and had just begun to learn to read and write. He told me he had been inspired by ‘meeting high-class people’ in the bazaar and realized that ‘speaking their English was a basic driving force’. He said he wanted to start his own hotel or restaurant and benefit from India’s growing consumerism. His horizons changed to Australia and he is regarded as a role model by those now at Ritinjali.

Life Improves Near Panipat

I went back in October 2012 to Beejna, a village near the industrial city of Panipat, two hours north of Delhi in Haryana on a new highway to see what had changed since I first went there for an
FT
article in 1987. That visit was to see young women weaving cotton durries for their marriage dowries, and I wrote about Darshan, a slim 18-year-old bride-to-be who was working on a horizontal wooden loom in her family’s small thatched mud-and-brick house.
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She was weaving a light brown and green 3ft by 6ft durrie that was destined for a Habitat home-furnishing store in London, where it would sell for £25–30.

The
FT
business peg for this rural story was Britain’s fashionable Habitat stores that were run by Terence Conran, a top furniture designer and retail entrepreneur. Conran had spotted the traditional brightly coloured dowry durries when he was taken to Panipat in 1969 by John and Bim Bissell, who ran Fabindia, a crafts-oriented shop (now a successful chain of stores) in Delhi. He thought it might become a trendy item in the UK and shipped over a container load, but in 1987 Habitat was facing a takeover bid that could end the trade and hit the Rs 45 (then £2) that Darshan and others received for three or four days’ part-time weaving.

These young women had virtually no prospects apart from marriage. ‘Between leaving school and getting married, they made the carpets because the Rajputs didn’t like unmarried girls going out into the fields,’ explained Satya Sharma, a local contractor. ‘When they became married women, they had to stay fully indoors, so often they couldn’t even do the carpets.’ Taking durries as part of the dowry was an old tradition and it still continues, though it is now more symbolic because bridegrooms and their families prefer money, motorbikes and electrical goods like refrigerators and televisions.

It was clear when I returned that life had changed dramatically since the 1980s. A seven-kilometre flyover carried a highway through the centre of Panipat that had been clogged with traffic before. In Beejna, there were paved roads, though some were flooded because of a mishandled government project. There were many motorbikes, as well as several tractors that had just begun to appear when I first visited. In the fields, there were some combine harvesters that were unheard of in the 1980s. Cylinders of natural gas had replaced cow-dung patties as fuel in homes, which were now built of concrete and normal-sized bricks instead of more traditional stones, small bricks and mud. Several large ostentatious houses had been erected by the most successful families. Large controlled-humidity tents were beginning to appear on some farms for growing vegetables such as cucumber, brinjal and red pepper. Health care had also been transformed, though, as everywhere else in India, it did not always operate efficiently. Amateur midwives had been replaced by a local clinic that had opened ten years ago, and there was now a gynaecology section with ultrasound and other facilities that had been added recently.

Young women had opportunities to study and work outside the village, while their brothers and husbands could chase jobs and careers in the cities, many created as a result of the 1991 reforms. I met Krishna, a woman in her fifties, whose two sons had successful careers. One was a manager in a cardboard-box factory in the nearby town of Karnal, while the younger one, aged 32, was a manager in Delhi at an outlet of the Café Coffee Day chain, having earlier worked with KFC. His wife lived at the small Beejna family home and was training to become an air hostess in Karnal, while he earned enough for their five-year-old twin sons to be bussed 12 km daily to a Karnal school. ‘We send the boys there so they can be educated in a more promising environment than the village,’ said Krishna. ‘It’s where Kalpana Chawla went,’ she added proudly, referring to a local hero and illustrating how aspirational Indians proudly latch on to accessible icons. (Chawla moved to America in the 1980s, became an American astronaut, and was killed in a NASA shuttle disaster in 2003.)

In a government-funded crèche attached to the village school, Krishna and two friends proudly produced mobile phones from their blouses and said everyone over the age of 16 had one. One of their husbands had a well-connected job as a court typist in Karnal, where their daughter studied in college and hoped to get a job in a bank. At the school, children were being taught under the shade of trees when we arrived. With 400 children of all ages, it was four times bigger than in the early 1980s. The pupils’ horizons had expanded from the village to Karnal’s call centres and shops, and beyond.

Clearly, prospects for the young had been transformed in these 25 years. Not everyone was successful, of course. I met a durrie weaver in Panipat who had set up his own factory but found it tough going, and both he and his wife wished he had stayed as a well-paid skilled employee. But they had consolations that would not have been possible in the 1980s – one son was running a ‘tent house’ business providing equipment for parties and the other one hoped to expand his father’s factory one day.

Despite the enormous changes, old traditions remained. Krishna’s daughter-in-law touched our feet as we walked into the house and when we left, but the daughter did not do so, showing the different status of the two young women in the husband’s home. The daughter in-law covered her head with her shawl as soon as a youngish man walked in, and removed it when he left.

Durries are now mostly made in factories, not in villages, though an elderly woman was weaving one with torn scraps of old material in Beejna, showing that the lifestyle of the very poor had changed little. Durries are also needed less because the charpoys on which they were used as thin mattresses are being replaced by plastic chairs. Bharat Carpet Manufacturers, the Panipat company that handled Darshan’s durrie, has spun off another company, V-Weave, and has grown into a leading supplier to top American stores such as WestElm and Crate&Barrel. Madhukar Khera, who ran the firm in the 1980s, and his son Nikhil who is in charge now, have expanded traditional weaving skills to produce thick hand-spun wool rugs and other floor coverings. So, although the eventual takeover of Conran’s shops did change the demand, and the brides-to-be no longer needed to weave them, the craft that started with the dowries is still thriving.

I found far less progress when I returned to a desperately poor tribal village adjacent to Kanha national park in the middle of India that I had last seen ten years earlier. Here, in this rural community, with the nearest city two-and-a-half hours away, the story was one of change but little progress. A 19-year-old son in the family I knew best had a modern-looking mobile phone, though he only used it for phone calls, and I was told almost everyone had mobiles in the more prosperous villages nearby. There were telecom towers in every large village (there had been two in Beejna). Many tribal people, particularly in the 1970s, had been crudely and insensitively shunted out of their traditional homes inside national parks. Later, when there was a formal resettlement process, they were cheated and harassed by forestry and banking officials on the preparation of their land and the handling of compensation. Most of the men had become heavy drinkers of the homemade ‘mahua’ liquor.

They and the women relied on casual labour for Rs 100 or so a day, working on repairing roads or in the mushrooming tourist resorts surrounding the national park. But few locals had the entrepreneurial drive, or the funds, to start small businesses such as roadside restaurants and shops. That was being done by people who had moved in from neighbouring towns. Many of the resorts catered to the brash new rich from the cities of Jabalpur and Nagpur, 160 and 260 km away, who had little care for the environment or the tribals. The local village market however had grown enormously in the past ten years, though it was still selling old-fashioned goods like plastic shoes, ancient-looking torches and religious posters. In other better-off farming villages, the young had dreams of venturing out to work in offices and call centres in distant towns, but not here.

The Maruti Revolution

One of the first signs that industry would change came at the beginning of the 1980s, at the same time that Indira Gandhi instigated the cement control reform mentioned in the previous chapter. This was when she initiated Maruti Udyog,
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which became a successful joint venture with Suzuki of Japan. It will never be as famous as the Model ‘T’ Ford, or the Volkswagen Beetle, but the little Maruti Suzuki 800cc car that was first sold in 1983 is the most significant vehicle ever produced in India. The Ambassador car remains India’s most famous saloon, but it is now a symbol of the manufacturing industry’s limitations, whereas the Maruti has been the catalyst for India’s modern and internationally competitive auto industry.

V. Krishnamurthy, a former top bureaucrat who became the founder-chairman, was told by Gandhi to revive the bankrupt Maruti car venture that had been started by her late son Sanjay Gandhi, who had been killed in 1980. She wanted a ‘people’s car’, but instead the 800 became a car for the middle classes and was followed by larger models. I remember people in Delhi wondering how they would fit a driver into such a small car along with their families (they did!), and complaining (before they bought one) about how it nipped in and out of the traffic around larger, stodgier vehicles. Years earlier, there were similar complaints in Britain about the iconic Austin-Morris Mini.

The joint venture with Suzuki began to unlock India’s hidden manufacturing strengths that had been bottled up by post-independence economic policies. I was at the opening of the factory in Gurgaon when Gandhi released the first cars to customers on 14 December 1983. I reported the next day in the
FT
that Osamu Suzuki, chairman of the Japanese company, had said to me that ‘it is difficult to have a good operation in India’.
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Demonstrating the Japanese determination to mark a new start for Indian industry, the imported management style decreed ‘the recruitment of shop floor workers with an average age of 20 who have never worked anywhere before, wear grey overalls, do physical exercises every morning and prompt time-keeping’.

Few components could be made in India because there were virtually no suppliers producing to acceptable standards. Maruti Suzuki changed that with new concepts of quality, tight cost control and process engineering, sparking a revolution that spread across India’s manufacturing industry. Not only were there no adequate component suppliers in 1983, but the idea of partnerships between a manufacturer and its suppliers was not understood. ‘A supplier was treated almost like a servant,’ says R.C. Bhargava, who was Maruti Suzuki’s managing director in the 1980s and 1990s and is now the chairman.
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Maruti changed that approach with a supplier development programme, taking 25 per cent equity stakes in some companies moving into India from Japan and elsewhere.

Now the roads are full of modern cars with Indian and international names, mostly manufactured in India, and Maruti is still the market leader. At the top end of the luxury range are imported names like Rolls Royce, Bentley, Lamborghini, in what has become their biggest market after China with foreign made models at prices up to Rs 4.5 crore, and some double that figure.

Business

The corporate scene has been transformed since 1991 – and it is for the better if one looks behind the crony capitalism that has drawn headlines in recent years and sees how companies of all sizes have grown, adapting to foreign competition and improving products. In the protected economy before 1991, the ambition of many big family business groups was to exploit links with government and prove their success by the size and visibility of their factories. They were less interested in efficiency and in operating profits. That changed when the economy opened up to international competition and foreign financing.

Information technology has played a special role because it brought a much-needed ‘can do’ confidence in the early 2000s to the business sector that had been bedevilled by India’s image of poor-quality production. ‘IT’ has also provided direct employment for over 2.5m people, and maybe another 10m in spin-off work, with annual revenues of around $100 billion, 75 per cent exported. Call centres have become stepping stones to urban success for young people who may otherwise have been stuck in their villages for life.