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India – Still Not “Flat”. Globalization and India  Thomas Freidman has asserted that globalization has made the world “flat” as evidenced by the growing.

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Presentation on theme: "India – Still Not “Flat”. Globalization and India  Thomas Freidman has asserted that globalization has made the world “flat” as evidenced by the growing."— Presentation transcript:

1 India – Still Not “Flat”

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3 Globalization and India  Thomas Freidman has asserted that globalization has made the world “flat” as evidenced by the growing service sector within India.  This also implies that India is “flat.”  Reality on the ground may differ.

4 Population’s impact  Currently the world’s 2 nd largest country with 1,121,800,000 people in mid  1.7% natural increase  2025 – approaching 1.4 billion  Will surpass China by 2032  70 million have moved to the cities between

5 70% Rural 600,000 villages

6 Poverty Abounds

7 Open sewage and toilet

8 By the Numbers  Per Capita GDP - $3600  60% agricultural/ but only 20% of GDP.  100 million farmers own NO land.  Approximately 80% of all Indians live on the equivalent of less than $2 a day. $2 a day.

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11 Information Technology’s Impact  India produces about 100,000 new engineers a year. About 3 times the number of the U.S.  But still only 1.6 million people are employed in IT and Service Center jobs.  Key centers include Bangalore, New Delhi, Gurgaon, and Hyderabad.

12 U.S. companies in India IT Services-design, support, and or production  Adobe, Cisco Systems, Dell, Google, Hewlett- Packard, General Motors, IBM, Intel, Microsoft, Motorola, Texas Instruments, Yahoo

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14 Indian IT and Service Development  IT giants – –Infosys –Wipro  TATA Consulting and Financial –Also TATA Motors  Convergys –World’s largest call center company

15 “Brain Drain”  Young talent leaving India seems to be slowing down.  Average starting salary for an IT engineer in India today is approximately $10-12,000.  Many are graduates of the Indian Institute of Technology –Several campuses located throughout the country  This salary provides a comfortable lifestyle in modern India for the privileged few.

16 Disparate Taxation  Only 35 million people pay income tax to the federal government. –Formal Sector  Over 1 billion pay NO federal taxes! –Informal Sector –Largely agricultural or village based

17 Growing Middle Class  Over 200 million people falling into a growing middle class of consumers.  Technically defined as those earning between $4000-$21,000 a year.  This actually only accounts for 60 M.  “Middle class-ness” seems to include those going from living on $5 a day to $10.

18 Education is far from universal  Compulsory and free education (6-14 yrs.) guaranteed with the Right to Education Bill 2005  Virtually un-enforceable.  Literacy rate of India stands at 59%

19 Reality’s impact  Economic conditions necessitate children as day workers in cottage industries or in agricultural.

20 Mid-day in Delhi

21 Cultural bias reigns supreme  “Other Backward Caste” law to increase quota up to 27% (currently 22%) of students in government higher education was recently put on hold. – March 2007  Higher caste are increasingly having to share power as OBC’s make up nearly 50% of the population.

22  Private schools are very costly and for the most part exclusive.  Rural villages depend on untrained teachers and NGO’s for help.

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25  Conditions in the rural village schools are usually far less modern and funded.

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28 Lacking Infrastructure  Major cities are not connected at this point by a highway system.  Golden Quadrilateral Highway Project will eventually connect New Delhi- Mumbai-Bangalore-Chennai-Kolkata. - $12 billion  Currently only 3,700 miles of highways!!!  40% of farm produce goes to waste as a result of poor transportation

29 Scheduled Improvements  New $430 million Bangalore International Airport to be completed by April (European built and operated) –Roads to the airport are uncertain  Vallapardam Ship Terminal in Kochi (southwest coast of Kerala) to be completed by Dubai’s DP World at a cost of $555 million

30 The Caste System  India’s source of strength and tragic weakness!  Though outlawed in the constitution; it remains a strong force controlling upward mobility. –Changing laws is easier than changing minds. –Compare it to the Civil rights movement in the United States.

31 Yet Hope Springs Eternal!  India’s people is in fact her greatest asset.  An optimistic attitude seems to exist within this country.  India’s ability to function as a democracy despite its massive population, cultural and religious diversity provides hope.

32 To “flatten”?  Provide universally enforced quality elementary and secondary education.  Continue to slow the brain drain.  Improve the quality of its infrastructure such as roads, water treatment and sewage, ports, railroads and airports.  Improve energy reliability.  Continue to provide tax incentives to encourage foreign investment including manufacturing.  Maintain peaceful political posture, in particular with Pakistan.

33 Sources  In Spite of the Gods: The Strange Rise of Modern India by Edward Luce  The World is Flat: A Brief History of the Twenty-First Century by Thomas L. Friedman  Planet India by Mira Kamdar  The Trouble with India, Business Week, 3/19/07     Trip to India –World Affairs Council of Houston (March 10-20, 2007)  Prepared by Jeff Cherry


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