RECASTING INDIA HOW ENTREPRENEURSHIP IS REVOLUTIONIZING THE WORLD’S LARGEST DEMOCRACY HINDOL SENGUPTA The author and publisher have provided this e-book to you for your personal use only. You may not make this e-book publicly available in any way. Copyright infringement is against the law. If you believe the copy of this e-book you are reading infringes on the author’s copyright, please notify the publisher at: us.macmillanusa.com/piracy. To my parents, who always said, “We middle class people must always stand by the poor and take their side—and not the side of the rich.” CONTENTS Title Page Copyright Notice Dedication Introduction Chapter 1 The Businessman Called Tagore Chapter 2 Business Models in the World’s Most Dangerous Place Chapter 3 The Socialist Moneylender Chapter 4 Gujarat, Riots and Economics Chapter 5 In the Company of Maids Chapter 6 Models in Villages Chapter 7 The Not Untouchables Chapter 8 The “Pervert” Pad Maker Chapter 9 Facebook for the Poor and the Village Call Center Chapter 10 From Dung to Detergent Conclusion: Was the Mahatma a Socialist? Acknowledgments Notes Index About the Author Copyright INTRODUCTION In the months before starting this book, I was writing and talking about the concept that I called Per Capita Hope. In my short lifetime, it seemed as if the world’s largest democracy would alter beyond recognition and finally take that lumbering leap into modernity promised when its first prime minister, Jawaharlal Nehru, spoke of its “tryst with destiny” in his midnight speech at independence in 1947. While economists and politicians were content to debate infinitely the rise of gross domestic product (GDP) that, since India’s economic liberalization began in 1991, has pulled the nation out of everlasting penury, it seemed to me that this narrow focus on GDP hid a more powerful phenomenon: the newfound freedom from anxiety and a constant sense of being held back, the paranoia of failure and the humiliation of class that millions of Indians have been freed from. No longer was success the exclusive privilege of the wealthy or the pedigreed, I argued. Liberalization had had an equalizing, democratizing role; it had allowed all of us to dream and then try to become. It had given us Per Capita Hope. Then I had a breakfast-table conversation with my parents. The occasion was that, at the sprightly age of 32, I had told my parents that it might be difficult for me to continue to stay with them since, you know, I might sort of move out and, you know, live with someone. Get married or something. “Unlike your mother,” said my father, carefully lowering his newspaper so that it didn’t get wet on the table, as if he were saving it to read again tomorrow, “I see things practically, not emotionally. The point is—is it practical economically to run two households? To this, my mother snapped, “Who is the girl and why does she not want you to live with us?” I was not sure about marriage, nor was I dating anyone, but it seemed like a good time to give it some thought. The concept of marriage stressed me out, but I realized that was probably because I lived in the city of seven-day weddings that yawned on like a happy, drunken blitzkrieg until they collapsed into hangover hell. I knew that my mother, with whom I had spent years arguing about why I needed privacy and why I wanted to lock my room, would have lots to say about this getting married and living away from home thing, but I had hoped that my father, an uncommonly peaceable man, would be, well, peaceable. But here he was taking potshots. Like many poor government employees, my father had never had the money to get private health insurance for himself and my mother. By the time the fruits of my English-language education kicked in and I made some money as a television reporter, they were too old to qualify at most insurance companies. I had been lackadaisical about this, thinking my steadily increasing income would easily cover any health emergencies we might have. My father, now in his mid-60s, was a more prudent man. He had recently done his calculations—even as he searched for a lawyer to make a will—and realized that his best bet was the railway medical card. This was a card given to railway employees, for them and their spouses, that was valid for life in any of the 125 railway hospitals across India. “And if the doctors there refer us to any private hospital, the card covers treatment there too—all for free,” he told me happily. “You have nothing to worry about.” All these years, he had never bothered to get a hospital card partly because of that odd belief the lifelong fit have in their ability to be eternally healthy, and because conditions in government hospitals vary wildly in India and the quality of care can often be a case of luck more than anything else. What he was not saying, but what I knew, was that my father dreaded becoming a “burden” to his only child. He had seen how disease can wipe out livelihood. Both his parents had died of cancer, draining his life savings. In the peak of his elderly life, having refused to retire after retirement, my father continued working at least ten hours a day as a civil engineer with the Delhi Metro Rail (the city’s subway system) and was pleased that he had already made provisions to ensure that I would barely have to pay anything if he or my mother ever fell ill. But the process had left him skeptical. “What per capita hope? Look at the prices! The builders cheat you, the private doctors cheat you, and the politicians are looting the country!” he said. I tried to explain that it wasn’t all bad, but he wouldn’t listen. “I have been to various hospitals in Delhi and the ones that cheat you the least are government hospitals, and the best is AIIMS [All India Institute of Medical Sciences]. Instead of building more AIIMS, we are hell-bent on building hospitals that are like fivestar hotels! Who can afford these?” he argued. “And I counted—they must have paved the same pavement outside Khan Market at least three times before the Commonwealth Games [in 2010]. They think we are gaadhas! Donkeys! No one understands anything. The crooks!” Ridden with theft that finally sent the politician in charge of the games to prison, the official budget of the Commonwealth Games1 hosted by India in its capital, New Delhi, in 2010 was $1.9 billion— up from the $270 million estimated when the country won the bid in 2003. The politician is now out on bail. “This is not per capita hope,” said my father. “This is per capita joke!” I had never thought that my parents would be this worried about my going to live away from them when I was in my 30s with a career thankfully going smoothly. Certainly in 2005 when I left for Bombay’s TV studios, they seemed almost relieved, though tearful. What had changed? What made them so unsure, jittery even, this time? I’ve noticed, in the last year or so, that a generation of Indians who seemed so confident only a few years ago—people like me, people I met, people who earned more, less, or the same—seemed less certain about the future. Some of it was, of course, the economy; those hairline cracks first noticed amid the tail-wagging whoops of 2007 and early 2008 had become gaping, gangrenous holes. After 20 years of ostensible reforms, we had pulled out millions of people from extreme poverty— 138 million made just enough extra money to push them above extreme hunger between 2004 and 2012. But that achievement has been dwarfed, especially in the last five years, by our staggering income inequality.2 Data from the National Sample Survey Organisation shows that between 2000 and 2012, the gap between spending and consumption by the richest and the poorest Indians had grown starkly. In 2000, the richest urban Indian was spending around 12 times as much as the poorest—this became 15 times by 2012. In villages, the difference grew from 7 times in 2000 to 9 times by 2012. One day, faced with a full front-page ad for the iPhone 5 in my morning newspaper, I calculated that the average cost of an iPhone 5 in India would feed 1,654 people in the villages and 1,351 people in the cities. (The average price of iPhone 5 is Rs 45,000.* India’s latest poverty line, according to the government committee headed by the economist Suresh Tendulkar in 2011, is at Rs 33.3 per day in urban areas and Rs 27.2 in rural areas; people who earn less than this are considered the poorest in the country and in dire need of government help. So, 45,000 / 33.3 = 1,351.35; and 45,000 / 27.2 = 1,654.41.) In the first quarter of 2013, Apple scored a 400 percent rise in sales in India. It wasn’t that the poorest Indians were not slowly making more money, but that the difference between rich and poor was growing much, much faster. It’s what I call the Antilia Syndrome. Antilia is a 27-floor home in Bombay built for, some estimates suggest, $1 billion, making it the costliest home in the world.