Just back from India, and again as ever I return from a BRIC country with my mind buzzing about the drive and opportunity for business; but this time with more nagging doubts about the issues that have long been spoken about as holding back the country, finally being about to hold back the country.
For sure, Mumbai remains as buzzing as ever. The emerging middle class in the city has long since emerged. In fact, given Mumbai’s chronic housing shortage (or shortage of space even when you do have a home), the city’s middle class spend more time engaging in middle class pursuits than the average European would ever hope for. After all, you have to eat out if you couldn’t possibly fit your friends in your home…
But talking with business heads in Mumbai, I’d say the clouds are not only visible in the recent growth statistics. Perhaps more clearly, they are visible in the way business people and the middle class is thinking, talking and feeling.
Just 12 months ago, professional chatter was still completely focused on expansion. Despite awareness of the countries many, many problems – from enormous, continuous grinding poverty amongst huge swathes of the population, to a corrupt bureaucracy that hasn’t quite killed off the “permit raj” – 12 months ago there was a confidence that the speed of growth would sweep through all obstacles.
But this time, the professional class seemed weighed down by the country’s problems. India has been through a six month soul search on its levels of corruption. But rather than the public debate having been an intellectual enemy on this perennial Indian issue, the middle class had reached a level of despair at the visible way politically self-interested Parliamentarians and Parties were willing to publicly kill the anti-corruption Lokpal Bill. The country’s infrastructure, always several stages behind the country’s real level of need, isn’t progressing with the speed needed to support the next stage of growth. Sure, Mumbai finally has some east-west train lines emerging, but the power problems that have always plagued the country show no sign of abating. If the future of the information age is a flexible workforce working from home, you have to start to question the prospects for a country where even the wealthiest home can regularly lose its mains power for 3 or more hours a day…
But most telling was the way in which people spoke about these problems. It took me a while to recognise precisely how I felt they spoke. What did it remind me of? Then it suddenly came to me: the weariness of someone with a cracking hangover, wishing they could take a break but are instead stuck working through the chores of the day. If Europe is undergoing a crisis after the euphoria of our last 20 years of drunken social democratic welfare spending, then India is, I believe, showing the first signs of a hangover with a different cause: sheer damn exhaustion from the burn-out energy it has used up in the last few years, without enough comfort created to re-energise a tired population and business base.
So here’s my prediction. We’ll still see growth, and certainly not a return to the old “Hindu rate of growth” so famously parodied in the post-war period. But it’ll be more like 5-6% for the next few years. A rate we would envy in Europe. But then remember that many a sociologist has said that anything below 7% in today’s India would disappoint so many, that social unrest and pressure on India’s democratic structures may follow.
I still have hope. Despite it all, I still love India like almost nowhere else on Earth. And India has constantly shown the world that it can surprise and confound expectations, usually in its own uniquely Indian way. But a note of caution for anyone hoping that India will emerge to drag the world as a whole back into growth. I fear just like the rest of us, its own problems are now more visible, and there is now a question mark over whether the will exists to grasp the solutions.