WEEKEND READ: Beyond India's dust and noise

At street level in India's overcrowded cities it is hard to believe that the country is making any economic headway at all. But look closer and the thrilling growth story of India cannot be denied.

Writing from the southern Indian city of Chennai last week, Alan Kohler recorded scenes that many visitors would react to with similar shock, confusion and perhaps even a touch of disdain (Visions of India, September 20). You could taste the heat and the dust as the revelation was made: India is a poor country and the infrastructure is decrepit.

"All the buildings in Chennai except the Hindu temple are shockingly rundown," he wrote. "City roads are like country lanes... And there are people out everywhere, all the time, walking about, riding bicycles, driving – but not working. Those who are working seem mostly idle, waiting for customers who never come.”

Yet does this kind of impression really show that India’s economic miracle is a charade? On the contrary, India is a thriving capitalist society of entrepreneurs that, while poor, is set to give the rest of the world a run for its money. While China’s burgeoning economy is built upon a world class infrastructure, India’s growth is in spite of its circumstances.

Anyone who has travelled to India will initially share Kohler’s misgivings. But spend time in a wider variety of settings – from the most modern of India’s corporate parks to the filthiest of slums – and a picture emerges not of contrast and contradiction, but of growth and development in the face of huge obstacles. And this makes India's economic story all the more exciting.

Despite the poverty, and despite the massive challenges in infrastructure, governance, communal relations and security, India has well and truly entered a new chapter in history. The statistics speak for themselves: a 9.4 per cent GDP growth rate between 2006 and 2007, a growth in imports and exports of 21.59 per cent and 20.9 per cent over the same period respectively and a 90 per cent net primary school enrolment are figures not to sniff at.

While there is appalling corruption, shoddy public services and ever-present Marxist agitation, the last two decades have also witnessed dramatic economic development. Compared to China, which began its post-Mao economic reforms in 1978, India is a relatively late-starter – growth, while not exactly sluggish in the 1980s, really took off after the government began wide-scale economic deregulation in 1991.

In its research brief on the country, the World Bank lauds India’s "vastly improved health conditions”, its banishing of the spectre of famine, and notes that it has made these achievements while maintaining a vibrant electoral democracy.

If it were possible to travel in time back to Victorian England, any observer would be sceptical of that society’s ability to not only continue to industrialise, but to maintain any semblance of cohesion. Social unrest, pollution, crime and inequality would leave a greater impression than the relatively primitive advancements in public hygiene, infrastructure, law and education.

Dickens, for instance, wrote of London in Oliver Twist: "There were a good many small shops; but the only stock in trade appeared to be heaps of children, who, even at that time of night, were crawling in and out at the doors, or screaming from the inside.”

Who would know that this was the capital of the British Empire and the greatest economic centre of the world?

The West’s industrial revolution preceded by decades – if not whole centuries – the advancement of the poor and the emancipation of women and minorities. India, in comparison, is managing its industrial revolution with far greater comparative progress in social welfare.

China, on the other hand, looks technologically impressive and now (since spitting was banned on Beijing’s streets) squeaky-clean. It is, however, a clean and impressive police state with a government that maintains an uneasy fusion of socialism and capitalism that bears more than a passing resemblance to fascism.

For all of India’s faults, its government does not execute people for blogging or whistle-blowing and its economic growth is not propped-up by government-owned banks mandated to lend regardless of the consequences. If you want to find a superficial, largely illusory and fragile industrialisation, perhaps China is your case-study.

India can seem like a messy and bewildering contradiction – that is part of its appeal to many people – but it should not be discounted as a future economic super power. No doubt it will continue to grow under the strain of seemingly insurmountable challenges, but it will survive and grow, as it does today, and as it has done for as long as anyone can remember.

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