Things are bad in India. And they are heading toward worse.
A sobering story in the New York Times today lays out the problem: a poor economy that is crippled by chronic societal and infrastructure problems. The whole piece is here, and worth a read for those interested in the country of yoga’s birth. A few snippets:
India had seemed tantalizingly close to embarking on the same dash for economic growth that has lifted hundreds of millions of people out of poverty in China and across East Asia.
Its economy now stands in disarray, with the prospect of worse to come in the next few months.
The economic decline has laid bare chronic problems, little remarked upon during the recent boom. An antiquated infrastructure, a sclerotic job market, exorbitant real estate costs and bloated state-owned enterprises never allowed manufacturing, especially manufacturing for export, to grow strong.
Roads and bridges to inland towns are not the only infrastructure problem. Shakti Industries, which thins and cuts aluminum wires for jewelry manufacturers, pays the equivalent of 15 to 18 cents per kilowatt-hour for electricity. In China, even after a round of price increases coming in late September to pay for more clean energy, factory owners will pay half as much.
The story is on the front page of the paper. Much presented in it tracks pretty closely to what I, at least, experienced when we were in Mumbai for a few days in January. There wasn’t the crushing poverty and hunger of the past, but in some ways the mega-city felt like the ghost image of a metropolis. It would seem there are many thing conspiring to keep India from waking up to its potential.
Posted by Steve