Below are some of the very depressing facts on India noted by Alan Greenspan in his book 'The age of turbulence'. We, IT people sitting in front of our computers think that the rest of India is also growing like Bangalore. But the picture is not as rosy as we think.
- Owing to costly labor laws that apply to establishments of ten or more employees, more than 40% of employment in all manufacturing takes place in firms employing 5 to 9 workers. This compares with only 4% in Korea. Productivity in these small firms is 20% of large firms
- Half of India's homes have no electricity
- Productivity in farms is only 1/4th of what it is in non-farm areas
- Rice yields are half of what they are in China and a third of what they are in China
- A third of crop is reported to rot en route to market due to bad transport
- Directly and indirectly employment in IT constitutes barely 1% of total employment in India
He notes that only manufacturing-for-export model can liberate the people trapped in villages. I have seen that trend in my village where lot of them have migrated to Bangalore mainly to work in garment industries or other manufacturing industry.
He also quotes Martin Feldstein:
"Cellphone service is widely available in India at low cost because it was regarded as a luxury and therefore left to the market, while electricity is hard to obtain because it has been regarded as a necessity and therefore managed by the government" -- WSJ, 16/2/2006
I have myself seen farmers struggling in my village as they get only around 6 hours 'good' electricity by which they can pump water to the crops. But some elderly people see it in a positive way. They think that with more electricity farmers will drain all the water from the ground (quite a possibility!!)
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