Post Card from Delhi
New Delhi, Thursday, 01 October 2015
I was driven from Indira Ghandi Airport early this morning through bright late summer sunshine. Thirty-three degrees Celsius; hazy pale diesel-heavy sky. VW execs must love it here.
My second visit to this amazing country this year, I am almost beginning to feel like a regular. And yet things happen to remind me how little I know of this vast, diverse, complex, multi-coloured world.
At least, when I read The Financial Express I am cognizant of India’s unique numbering system. You see, for Indians, there are no millions. There is a lakh, which is one hundred thousand, and then there is a crore, which is ten million. So when I read in today’s Express that there India’s state-owned railway company has 13 lakh employees, I know that it is comparable in manpower to the UK’s NHS. Things can get confusing, mind you, when reading an Indian company’s annual report.
The big topic of conversation here amongst the business types (which inevitably includes taxi drivers) is the decision by Reserve Bank of India (RBI) Governor, Raghuram Rajan, to cut the key central bank policy rate by a full fifty basis points to £6.75%. That’s the fourth cut in the last year, reducing the cost of money by a cumulative 125 basis points.
At a moment when central banks in Washington and London are summoning the courage to raise rates, in India, rates are on the slide, though still at “normal” levels, historically speaking.
Mortgage payers, a growing demographic, are delighted; car dealers are expecting a brisk autumn. Meanwhile IATA has announced that India, whose growth rate now exceeds that of China for the first time, has announced that India’s domestic air travel market is growing at over 18% per annum – the fastest in the world. The mood here is little short of jubilant.
Another cause for joy is the publication of the latest World Economic Forum Global Competitiveness Forum rankings. India has risen 16 places this year and is now ranked in 55th place. Poor old Brazil has fallen to 75th position. The UK, by the way, is one notch down.
Unlike China, India is a democracy, at least in the strict sense that nearly one billion people have the right to vote in elections. Governments that disappoint are booted out. Also, it functions, generally, according to the rule of law. Although, as in China, there is a rigid social structure and a tendency towards hierarchy, unlike in China, there is a high degree of transparency, and a vibrant media to hold politicians and businessmen to account.
Indeed, the Indian media can be disarmingly candid about India’s failings. I learnt from an Indian newspaper, not a British or American one, that most Indian’s don’t have access to sanitation. There is enthusiastic applause for a five-year programme to build 600 million toilets.
Demographics are a vital factor in India’s prospects. population, currently at 1.248 billion, is still increasing, and with a higher birth rate than China, India is set to become the world’s most populous country by 2022, just seven years from now.
Many foreign investors will tell you that investing in India is fraught with problems. One is the inconsistency of the implementation of tax regulations. Another is the stifling bureaucracy, which is also ineffectual.
And it is ironic that in a country which is so heavily regulated, health and safety standards are so low. Picture a family of four bestriding an ancient moped (no helmets) speeding the wrong way down a pot-holed highway with bales of inflammable material on their heads. Papa rolls a cigarette in one hand and makes a call on his mobile with the other. And the police look on benignly.
Road safety is based on a strict, unspoken pecking order. Cars give way to trucks; tuk-tuks give way to cars; rickshaws give way to tuk-tuks; cyclists give way to tuk-tuks; pedestrians wishing to cross a road just take their lives in their hands. All this against a cacophony of honks, toots and blasts of horns. (Many vehicles carry a sign at the rear: Please toot). Meanwhile insouciant cows and plucky dogs meander through the traffic with admirable nonchalance.
Coming from a society where children are obliged to wear goggles to play conkers, where window cleaners are forbidden to climb ladders and where a trip to a building site requires a Hi-Viz jacket and a silly plastic helmet: this is real culture shock. And like all wholesome shocks, it is refreshing.
India is a land of contradictions. Its space programme has sent a probe to Mars; yet, as mentioned, 600 million of its citizens do not have access to sanitation. Mumbai has more skyscrapers under construction than any other city in Asia, yet millions live in slums. Trendy young Indians throng the shopping malls, yet public power grids suffer frequent blackouts. India is building its own Neutrino Observatory (Hadron Collider) beneath in southern India, yet India’s highways are lamentable. The H2 highway from Delhi to Agra is a half-finished pot-holed mess which slows to one lane when it rains. Prime Minister Modi’s infrastructure programme is overdue.
Just consider that on 28 September India launched ASTROSAT, a space observatory satellite that puts India into the premier league for space research.
At the same time India’s embedded strengths are becoming apparent. It has the largest middle class in the world, overwhelmingly fluent in English. (The middle class, mind you, is defined by one Indian economist as anyone who owns a toaster!). This middle class is well educated, outward looking and ambitious. And as I will underline in future post cards and articles, it would be a mistake to underestimate the clout of India’s multinationals.
Dinner this evening is at the Sheraton with a local-based fund manager who is apparently going to assure me that the Bombay Index is about to rebound. The food at the Bukhara Restaurant is legendary. I wish I weren’t so tired.
Tomorrow, we fly to Darjeeling. The purpose of my visit to this remote outpost of the Raj I shall reveal shortly. Tea-tasting? I’ll leave you guessing.
Mr Subash, our driver, has arrived. And – I don’t believe it – he’s driving an Ambassador, that curvaceous icon of Indian industrial design. As we leave the lobby, I catch more excellent news. India is home to 70% of the world’s remaining tigers, and the latest tiger census shows that the sleek beasts are at record numbers. A good omen, surely.
PS If you get this late it’s because I’ve had huge problems connecting to the internet. I couldn’t even connect at Indira Ghandi Airport – though recently I had a similar problem at Gatwick. We have so much in common.
VAH 02/10/2015
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