Re: Is India’s outsourcing honeymoon over?
Does India have quantity, but not enough quality?
The Times Of India reports that Google has had trouble finding enough quality talent to hire for its Indian offices.
India may have an exploding IT industry, but Google has been notorious in setting its standards super-high for job candidates, and it isn't finding enough bodies to put on the giant colored balls.
Google, which is considered to have a very low attrition rate even in the high-job-hopping Indian IT space, has found it more challenging to hire certain talent in India as compared to other parts of the world, the company's founder-director Kavitark Ram Shriram admitted recently.
The Indian origin founding board member of Google and a well-known venture capitalist said at an ‘Investing in India' conference in San Francisco, "I know first hand that we have had a bit more of a challenge trying to hire engineers for Google in Bangalore compared to the other parts of the world."
I'm hoping its more of a situation of growing pains for Google than a problem with the Indian workforce.
Is the problem on Google's side, or does India have quantity, but not enough quality?
Re: Does India have quantity, but not enough quality?
India may have an exploding IT industry, but Google has been notorious in setting its standards super-high for job candidates, and it isn't finding enough bodies to put on the giant colored balls.
Google, which is considered to have a very low attrition rate even in the high-job-hopping Indian IT space, has found it more challenging to hire certain talent in India as compared to other parts of the world, the company's founder-director Kavitark Ram Shriram admitted recently.
The Indian origin founding board member of Google and a well-known venture capitalist said at an ‘Investing in India' conference in San Francisco, "I know first hand that we have had a bit more of a challenge trying to hire engineers for Google in Bangalore compared to the other parts of the world."
I'm hoping its more of a situation of growing pains for Google than a problem with the Indian workforce.
Is the problem on Google's side, or does India have quantity, but not enough quality?
the main thing is Google don't pay much :) compare to other companies
Re: Does India have quantity, but not enough quality?
Lakki is absolutely 100% right denada, tumhe mere jaise honhar intelligent ladko ko dekh kar pata nahi chalta kaya, I work for google and google sends payment to me every month 
Re: Does India have quantity, but not enough quality?
Well Google stock options are worth much than just pay. Indians must be paid stock options.
Re: Does India have quantity, but not enough quality?
others comapanie pay pacakge(Sal +Stock options) is much attractive then Google:)
Karma Capitalism
Doesnt Islam also preach “selfless right action”, without regard for result. Capitalism is also based on the theory of relative scarcity. This means that there always has to be a real or as in the majority of cases, a forces insufficiency of commodities to meet the needs of the people. This is not in keeping with the reality life. Islam does not share this idea of relative scarcity. Islam does not allow this to happen. The basic needs are guaranteed to every Muslim and non-Muslim living under the rule of Islam.
http://www.businessweek.com/magazine/content/06_44/b4007091.htm
Karma Capitalism
Times have changed since Gordon Gekko quoted Sun Tzu in the 1987 movie Wall Street. Has the Bhagavad Gita replaced The Art of War as the hip new ancient Eastern management text?
Signs of worldly success abounded as members of the Young Presidents’ Organization met at a mansion in a tony New Jersey suburb. BMWs, Lexuses, and Mercedes-Benzes lined the manicured lawn. Waiters in starched shirts and bow ties passed out vegetarian canapés. And about 20 executives–heads of midsize outfits selling everything from custom audiovisual systems to personal grooming products–mingled poolside with their spouses on a late September evening.
After heading inside their host’s sprawling hillside house–replete with glittering chandeliers, marble floors, and gilded rococo mirrors–the guests retreated to a basement room, shed their designer loafers and sandals, and sat in a semicircle on the carpet.
The speaker that evening was Swami Parthasarathy, one of India’s best-selling authors on Vedanta, an ancient school of Hindu philosophy. With an entourage of disciples at his side, all dressed in flowing white garments known as kurtas and dhotis, the lanky 80-year-old scribbled the secrets to business success (“concentration, consistency, and cooperation”) on an easel pad. The executives sat rapt. “You can’t succeed in business unless you develop the intellect, which controls the mind and body,” the swami said in his mellow baritone.
At the Wharton School a few days earlier, Parthasarathy talked about managing stress. During the same trip, he counseled hedge fund managers and venture capitalists in Rye, N.Y., about balancing the compulsion to amass wealth with the desire for inner happiness. And during an auditorium lecture at Lehman Brothers Inc.'s (LEH ) Lower Manhattan headquarters, a young investment banker sought advice on dealing with nasty colleagues. Banish them from your mind, advised Parthasarathy. “You are the architect of your misfortune,” he said. “You are the architect of your fortune.”
The swami’s whirlwind East Coast tour was just one small manifestation of a significant but sometimes quirky new trend: Big Business is embracing Indian philosophy. Suddenly, phrases from ancient Hindu texts such as the Bhagavad Gita are popping up in management tomes and on Web sites of consultants. Top business schools have introduced “self-mastery” classes that use Indian methods to help managers boost their leadership skills and find inner peace in lives dominated by work.
More important, Indian-born strategists also are helping transform corporations. Academics and consultants such as C. K. Prahalad, Ram Charan, and Vijay Govindrajan are among the world’s hottest business gurus. About 10% of the professors at places such as Harvard Business School, Northwestern’s Kellogg School of Business, and the University of Michigan’s Ross School of Business are of Indian descent–a far higher percentage than other ethnic groups. “When senior executives come to Kellogg, Wharton, Harvard, or [Dartmouth’s] Tuck, they are exposed to Indian values that are reflected in the way we think and articulate,” says Dipak C. Jain, dean of the Kellogg School.
Indian theorists, of course, have a wide range of backgrounds and philosophies. But many of the most influential acknowledge that common themes pervade their work. One is the conviction that executives should be motivated by a broader purpose than money. Another is the belief that companies should take a more holistic approach to business–one that takes into account the needs of shareholders, employees, customers, society, and the environment. Some can even foresee the development of a management theory that replaces the shareholder-driven agenda with a more stakeholder-focused approach. “The best way to describe it is inclusive capitalism,” says Prahalad, a consultant and University of Michigan professor who ranked third in a recent Times of London poll about the world’s most influential business thinkers. “It’s the idea that corporations can simultaneously create value and social justice.”
You might also call it Karma Capitalism. For both organizations and individuals, it’s a gentler, more empathetic ethos that resonates in the post-tech-bubble, post-Enron zeitgeist. These days, concepts such as “emotional intelligence” and “servant leadership” are in vogue. Where once corporate philanthropy was an obligation, these days it’s fast becoming viewed as a competitive advantage for attracting and retaining top talent. Where the rallying cry in the 1980s and '90s may have been “greed is good,” today it’s becoming “green is good.”
And while it used to be hip in management circles to quote from the sixth century B.C. Chinese classic The Art of War, the trendy ancient Eastern text today is the more introspective Bhagavad Gita. Earlier this year, a manager at Sprint Nextel Corp. (S ) penned the inevitable how-to guide: Bhagavad Gita on Effective Leadership.
THE ANCIENT SPIRITUAL wisdom of the Bhagavad Gita seems at first like an odd choice for guiding today’s numbers-driven managers. Also known as Song of the Divine One, the work relates a conversation between the supreme deity Krishna and Arjuna, a warrior prince struggling with a moral crisis before a crucial battle. One key message is that enlightened leaders should master any impulses or emotions that cloud sound judgment. Good leaders are selfless, take initiative, and focus on their duty rather than obsessing over outcomes or financial gain. “The key point,” says Ram Charan, a coach to CEOs such as General Electric Co.'s (GE ) Jeffrey R. Immelt, “is to put purpose before self. This is absolutely applicable to corporate leadership today.”
The seemingly ethereal world view that’s reflected in Indian philosophy is surprisingly well attuned to the down-to-earth needs of companies trying to survive in an increasingly global, interconnected business ecosystem. While corporations used to do most of their manufacturing, product development, and administrative work in-house, the emphasis is now on using outsiders. Terms such as “extended enterprises” (companies that outsource many functions), “innovation networks” (collaborative research and development programs), and “co-creation” (designing goods and services with input from consumers) are the rage.
Indian-born thinkers didn’t invent all these concepts, but they’re playing a big role in pushing them much further. Prahalad, for example, has made a splash with books on how companies can co-create products with consumers and succeed by tailoring products and technologies to the poor. That idea has influenced companies from Nokia Corp. (NOK ) to Cargill. Harvard Business School associate professor Rakesh Khurana, who achieved acclaim with a treatise on how corporations have gone wrong chasing charismatic CEOs, is writing a book on how U.S. business schools have gotten away from their original social charters.
Vijay Govindarajan, a professor at Dartmouth College’s Tuck School of Business whose books and consulting for the likes of Chevron (CVX ) and Deere & Co. (DE ) have made him a sought-after innovation guru, links his theories directly to Hindu philosophy. He helps companies figure out how to stop reacting to the past and start creating their own futures through innovation. Govindarajan says his work is inspired by the concept of karma, which holds that future lives are partly determined by current actions. “Karma is a principle of action. Innovation is about creating change, not reacting to change,” he says.
There are also parallels between Indian philosophy and contemporary marketing theory, which has shifted away from manipulating consumers to collaborating with them. “Marketing has tended to use the language of conquest,” says Kellogg professor Mohanbir S. Sawhney, a Sikh who discusses the relevance of the Bhagavad Gita to business on his Web site. Now the focus is on using customer input to dream up new products, Sawhney says, which “requires a symbiotic relationship with those around us.”
Kellogg’s Jain, who is working on a book about the customer-centric business models of Indian companies, believes that many Indian thinkers are drawn to fields stressing interconnectedness for good reason. “We have picked areas that are consistent with our passion,” he says.
Whatever the common themes, India, of course, is hardly a showcase of social consciousness. While companies such as Tata Group or Wipro Technologies have generous initiatives for India’s poor, the country has its share of unethical business practices and social injustices. In addition, some Indian academics bristle at the suggestion that their background makes their approach to business any different. They’re quick to point out the wide range of religions, influences, and specialties among them.
Indeed, it’s not surprising that thinkers from a country with as diverse an economic and social makeup as India would have different perspectives on the influences on their work. “We are a fusion society,” says Harvard’s Khurana. As a result, many Indian management theorists “tend to look at organizations as complex social systems, where culture and reciprocity are important,” he says. “You won’t hear too many of us say the only legitimate stakeholders in a company are stockholders.” What’s more, India’s extreme poverty imposes a natural pressure on its companies to contribute more to the common good.
Indian thinkers are affecting not only the way managers run companies. They are also furthering their search for personal fulfillment. Northwestern’s Kellogg even offers an executive education leadership course by Deepak Chopra, the controversial self-help guru and spiritual healer to the stars. Chopra also is on the board of clothing retailer Men’s Wearhouse Inc. and has conducted programs for Deloitte, Harvard Business School, and the World Bank.
In a stark, brightly lit classroom, Chopra, sporting glasses with heavy black frames studded with rhinestones, led a class through a 20-minute meditation in June. “Sit comfortably in your chair with your feet planted on the ground,” Chopra instructed the 35 mostly midlevel executives from corporations that are as far afield as ABN Amro Bank (ABN ) and sporting goods retailer Cabela’s Inc. (CAB ) "Our mantra today is: I am.’ "
OTHER B-SCHOOLS ARE adding courses that combine ancient wisdom with the needs of modern managers. A popular class at both Columbia Business School and London Business School is “Creativity & Personal Mastery,” taught by Columbia’s Srikumar Rao. Many attendees are fast-track managers who are highly successful at work but still miserable, says Rao. His lectures, which include mental exercises and quotes from Indian swamis and other philosophers, win praise from managers such as Goldman Sachs Group Inc. (GS ) Managing Director Mark R. Tercek. “Business schools ought to be championing this stuff,” says Tercek, a yoga practitioner. “We can hire the smartest damn people in the world, but many of them ultimately don’t succeed because they can’t motivate and work with those around them. I think the Indians are on to something.”
They may be on to quite a lot. Some Indian theorists have said their ultimate goal is to promote an entirely different theory of management–one that would replace shareholder capitalism with stakeholder capitalism. The late Sumantra Ghoshal was attempting to do just that. At the time he died, the prolific London Business School professor was working on a book to be called A Good Theory of Management.
As Ghoshal saw it, the corporate debacles of a few years ago were the inevitable outgrowth of theories developed by economists and absorbed at business schools. Corporations are not merely profit machines reacting to market forces; they are run by and for humans, and have a symbiotic relationship with the world around them. “There is no inherent conflict between the economic well-being of companies and their serving as a force for good in societies,” wrote Ghoshal.
In their own ways, other Indian thinkers are picking up the mantle. Khurana’s forthcoming book, From Higher Aims to Hired Hands, looks at the professional responsibility to society that managers and the business schools who train them were initially designed to have.
The quest, says Prahalad, is to develop a capitalism that “puts the individual at the center of the universe,” placing employees and customers first so that they can benefit shareholders. This is a lofty if improbable goal. But if it is attained, business leaders may find that India’s biggest impact on the global economy may be on the way executives think.
Re: Karma Capitalism
NO!
Re: Does India have quantity, but not enough quality?
Google does pay a lots along with Microsoft. These two companies pay the highest. A programmer there can easily make 3-5 Lakh rupees/month.
In India:
The average call center worker with 3 years experience makes about Rs 20,000/month.
Average programmer makes Rs20,000-Rs200,000/month.
Re: Karma Capitalism
I don' think it has replaced. Also Art of War may be a good quotation but is not 'basis' of modern business.
may be here and there people quote from this and that - does not mean 'this and that' is basis.
for example because 2 things share some one idea, they are based on each. if Islam and socialism guarentee basic needs does it mean socialism based on Islam or other way? just something shared as idea, I think.
Re: Karma Capitalism
Students of karma capitalism
US business schools are lining up for courses that will help tomorrow’s executives find their inner peace.
Dean Nelson reports from New Delhi
THE young executives — among America’s brightest and best — cast off their shoes and sat cross-legged at the feet of a tall 80-year-old man dressed in flowing white robes.
Like disciples in the presence of a prophet, they hung on his every word. And they stared with concentration as their teacher wrote on a white flip-board the bywords to business success: concentration, consistency, co-operation.
For the members of the Young Presidents’ Association, meeting in New Jersey, this was no ordinary leadership seminar. They were being imbued with the values of the Hindu philosophy of Vedanta, by its most venerable proponent, Swami Parthasarathy.
It was only one example of how America’s business schools and corporations are turning to the teachings of Hindu gurus and the wisdom of Lord Krishna for guidance for their budding hedge-fund managers, investment bankers and venture capitalists.
Greed may have been good in the 1980s but karma capitalism is now being seen as illuminating the way to long-term business success. Companies are turning to gurus and swamis to transform stressed-out, one- dimensional executives into well-balanced bosses whose inner peace will keep them focused, productive and profitable.
On the syllabus at Harvard, Kellogg, Wharton and Ross business and management schools is the Bhagavad Gita, one of Hinduism’s most sacred texts. Also known as the Song of the Divine One, the work relates a conversation between the supreme deity Krishna and Arjuna, a warrior prince.
Its sentiments are being used to bring out the best in the next generation of business leaders. About one in 10 professors at these institutions are of Indian origin, and although opinion among them varies widely, some of their common themes are gaining a wider audience. The most influential is that business leaders should aim for a higher purpose rather than simply amassing a fortune.
Why is not clear, but political goals like social justice and corporate social responsibility seem to have become business aspirations for many companies and schools. And for many, the methodology of achieving them includes developing more rounded executives with a strong spiritual sense of who they are.
A number of leading Indian academics such as Ram Charan, CK Prahalad and Vijay Govindarajan have emerged as gurus who can bring about this change, while more populist teachers like Deepak Chopra have created global business brands advising top executives on how to change their lives.
Parthasarathy, who runs his own school of Vedanta Hindu philosophy in Mumbai and still bats regularly for his college cricket team, is the guru of gurus. Parthasarathy was the heir to his family’s shipping business, but turned his back on the family firm after studying at London University.
He began studying the Bhagavad Gita, and has spent the past 50 years building a multimillion pound empire through explaining its practical benefits to wealthy corporations and executives.
He has recently returned to India from America where — in addition to the Young Presidents’ Organisation — he lectured students at Wharton Business School and executives at Lehman Brothers in Manhattan. His tours are booked well beyond next year, and will include Australia, New Zealand, Singapore and Malaysia.
While traditional business teaching has used the language of war and conquest, Parthasarathy uses the Bhagavad Gita to urge his students to turn inwards, to develop what he calls the intellect, by which he means their own personal understanding of themselves and the world, and to develop their “concentration, consistency and co- operation”.
Parthasarathy, or Swamiji as he is known to many of his followers, uses the Bhagavad Gita and its “Vedic laws” to inspire his students to raise their aim from earning a crust to focusing on higher spiritual or business goals.
The Gita, as it is known, is the Hindu text in which Lord Krishna reveals himself as Supreme Being to Arjuna as he toils in moral confusion on the battlefield. In the script, Krishna explains to Arjuna that his soul will endure beyond his life, and that enlightenment comes through shedding the ego, and focusing on the “immortal self”. He explains the importance of devotion, action, meditation and knowledge and teaches that real leaders cast aside emotions that interfere with sound judgment, and put their duty ahead of their personal fortunes.
Parthasarathy’s long-term friend Gopichand Hinduja, who with his brothers owns Gulf Oil and Ashok Leyland Trucks and is listed as the seventh-richest man in Britain, said he is one of several gurus who have increased his knowledge of the Gita and in turn helped their family business.
“The Bhagavad Gita can make people better decision-makers. If you just close your eyes and be silent, that gives you the inner strength to focus. It’s nothing to do with religion but inner confidence. This has transpired from Vedic law and scripture,” he said.
“We know him [Parthasarathy] very well. He uses meditation, yoga and relaxation to ease stress. The world is becoming faster, and people have hypertension. There’s no swami or guru we haven’t met or tried to understand. In general, each one has some benefit. Vedic law has helped us as businessmen. There are many examples. All of us follow the Bhagavad Gita. Every time you read it you understand more and get more depth.There is no problem in the world to which you do not find a solution there.”
Parthasarathy, however, is sceptical about his new role as guru-in-chief to America Inc. “The business community has appreciated my line of approach. But nobody knows what I’m talking about, just bits and pieces. I’m saying they need to develop their intellect, not simply their intelligence, which is just knowledge from external sources, to help earn a living.
“Your intellect is your capacity to deal with the world, which is dormant in you. I ask people to think. People are doing business, but they don’t know why,” he said.
“You’ve got to set targets for yourself. They could be material or spiritual. I’m not interested in business. I’m interested in teaching people what life is about. We have to add self-realisation as a target, to know yourself. We have a spiritual target and all these business jokers have a material target.”
He is sceptical of the prospects of many of his business students benefiting from his teaching. “Not a single soul has understood. At Kellogg, nobody understood. They said it was inspiring. They think I will help them make more money. It’s hype,” he said.
Gopichand Hinduja said his students could learn as much from their guru’s business practices as their spiritual teaching. “Some of these swamijis are now richer than many of the businessmen,” he noted.
Wisdom of Krishna
GREED IS BAD
“You should never engage in action only for the desire of rewards,” Krishna says. Acting on worldly desires leads to failure. Do well, and good things will come.
BE FAIR
Enlightened leaders are compassionate and selfless and they “treat everyone as their equals”. Followers will rally round them and follow their example.
ACT RATHER THAN REACT
Leaders accomplish “excellence by taking action”, Krishna says. A leader’s actions today can become the “karma” that influences his status tomorrow.
SEEK HIGHER CONSCIOUSNESS
Leaders should view problems within their larger contexts. In other words, show sensitivity to shareholders, employees, partners and neighbours.
http://www.timesonline.co.uk/article/0,,2095-2426391_1,00.html
Re: Does India have quantity, but not enough quality?
is 20000 to 200,000 any kind of range for 'average'? it seems to be 2 extreme.
what is important is whether 200,000 is enough for good life? can you buy a flat or house? and a reasonable car etc?
Re: Karma Capitalism
The concept of meditation and 'intent' is niether new nor limited to Hidu religion.
'Maraqba',in Islam , is what is equivalent to hindu yoga or budhist meditation and the instruction in Islam that
'her amal ka daromadar niyat per hai'
is what world today is contemplating about
for instance the insurance companies instead of using the phrase selling policies to families prefer saying 'helping families to achieve financial
stability', thus justifying every step they take to build their business. It does not only give them a moral boost but also an inner confidence. The entire concept of Sufism revolves around the same principles.
Only difference is that Indians with growth of education are able to interpret their philosophy in terms of the current world situation,while for muslims , with their limited exposure to their environment and scientific world, Islam is all about Perdah,Jihad and Qurbani only.
The day the muslim scholars succeed in blending the religious education with the modern scientific and metaphisical theories, the outcome will be huge.
Re: Does India have quantity, but not enough quality?
The quality is a reflection of the educational system. When there is high demand there are plenty of opportunist who start up educational businesses and if you look around Pakistan, there are plenty of upstart colleges and universities. The quality level at each of these institutions is different and it is usually sub-par. When you have graduates from such institution, it is not that they are not smart enough, they are just not trained well. As a result of this there is more demand for people who have already joined the workforce and have proven themselves through experience. It is simply about supply and demand.
BTW, I agree Googles hiring practices are crazy and they are not an indication of the overall market. There is plenty of good telent in India and elsewhere if they are willing to pay the market value and not just try to sell their name.
Re: Does India have quantity, but not enough quality?
what is important is whether 200,000 is enough for good life? can you buy a flat or house? and a reasonable car etc?
2 lacs in a month is enough for everything, 2 lac INR means near about 4600 US$ in a month. Within a year you can buy your own brand new Mercedes Benz or a decent flat for 4 person.
India’s Bleak future - Employment crisis leading to social breakdown
Dr Ifzal Ali, the chief economist of the Asian Development Bank. His analysis of the situation in India was bleak. India, he warned, with its working age population set to increase by 71m to reach 762m in the next five years, was heading towards an employment crisis that could lead to social breakdown and a rapid collapse in growth rates. India is facing a profound demographic crisis. It is clear as day that it is going to struggle to find jobs for its enormous working-age population.
Mr Ali warned that unless economic activity became more inclusive, social instability, political strife, policymaking paralysis and capital flight loomed. He warned, and I quote, that “in India we could step back from 7-8 per cent growth to 3-4 per cent growth very easily within five to six years if unemployment and underemployment is not addressed.
Why is this happening? It is happening for two reasons.
The first, in his view, is that there is a “huge global oversupply of labour” resulting from the growing integration of India, China and Russia with the world economy. The second is that this global oversupply has come at a time when companies around the world are pursuing competitiveness with “ideological zeal” and creating fewer new jobs per unit of extra output.
Now the idea has traditionally been that in a global economy it will be the lowest cost country that will win a race to the bottom. As Swaminaphan Aiyar, the economist, has put it, globalisation has for the first time in history made poverty an advantage. As companies are forced to scan the world for ways to cut costs, the lower the wages in any one country, the more competitive it will be, all other things being equal.
The problem is that in India all these other things are not equal. To ride the globalisation bandwagon, a country has to create a good investment climate, in terms of regulation, law and order, physical infrastructure and availability of skilled human capital. India is a very long way from doing any of these things.
I want to focus on the issue of human capital, as that’s where I think perceptions are currently most skewed. Everyone knows that India’s physical infrastructure is in dire condition, and for all the talk, is not improving at anything like the speed required.
Everyone also knows that law and order is fairly hit and miss: India may have courts, but they tend not to dispense justice rapidly or fairly. The World Bank rates India 134th country in the world (out of 175) in terms of ease of doing business. (It takes on average four years to enforce a contract). That’s one place below Tajikistan, if that helps put it in context.
Human capital
But that’s all well known: let’s focus on the human capital. And let’s start at the most important period in any human’s development, which is the period from birth to two years. The odds against a child surviving just being born are high: 63 infants per every 1,000 of those born alive die before the age of one. But if you do survive you are likely to suffer acute malnourishment.
**
In all the excitement about the new India, it is forgotten that India has a child malnutrition rate that is twice that of sub-Saharan Africa – at 47 per cent of children aged under three. In Madhya Pradesh, it’s 55 per cent, which gives you a fair sense of what the real poverty rates are. This is the age when most mental functions develop and is a critical determinant of intelligence and productivity in later life. Malnutrition in early childhood has serious, long-term consequences because it impedes motor, sensory, cognitive, social and emotional development.
I spoke about this with Werner Schultink, head of child development and nutrition expert at Unicef in India. He made a reasonable point (that is not at all fashionable): “If India’s large population mass in the north is physically and mentally stunted, how is this going to impact growth in the long run. How will it affect India’s ability to compete in the global market with a large population that’s physically and mentally stunted?”
**
The World Bank recently estimated that the physical toll of malnutrition alone costs the Indian economy 2-3 per cent of GDP per annum. Malnutrition will continue to be a drag on the Indian economy’s potential for many years. Unicef describes its lack of progress at reducing malnourishment rates as “staggering”.
The point I’m trying to make is that unless India makes a dramatic investment in its human capital, its demographic advantages will turn into a demographic disaster in the form of a massive unemployable labour force.
Let’s have a quick look at the public health and education systems. Mr Singh’s government is failing to meet its promise of May 2004 to lift health spending to 2-3 per cent of GDP within five years. Spending on public health has plummeted from 1.3 per cent of GDP in 1990 to 0.9 per cent today, and is among the lowest in the world. Absenteeism among health workers is running at about 40 per cent.
With free public primary healthcare available in only 21 per cent of villages, the rural poor generally have to borrow to see private quacks. More by default than design, India now has the largest privatised health system in the world, accounting for 80 per cent of treatments. It is a highly inegalitarian system that imposes crippling financial burdens on the poor.
**
It means too, for example, that India is acutely exposed to epidemics. Polio is making a comeback. Dengue has been wreaking havoc in the last few months. But most seriously of all, as the UN this year reported, India has overtaken South Africa as the country with the world’s largest HIV/Aids caseload, with an estimated 5.6m infected, 90 per cent of them unknowingly.
This needs to be put in context: India has a relatively low adult prevalence rate of the disease - 0.9 per cent – but the size of its population, at 1.1bn, means that the burden on the health system is immense. Every percentage point increase in the adult prevalence rate will affect the productivity, in the absence of drugs, which are currently too costly to be widely available and which in any case are dangerous to take if you’re malnourished, of around 5m sufferers.
A recent UN-sponsored report, based on a projection of the disease affecting 20m-25m people by 2010, says HIV could knock a full percentage point off India’s annual average growth rate over the next 10 years, and as much as 1.5 per cent off the GDP growth rate in 2016.
HIV has already spread to the general population in six “high-prevalence” states, where infection rates among high-risk groups exceed 5 per cent and 1 per cent among pregnant women (a proxy for the general population). In Mumbai, one survey found that 44 per cent of female prostitutes carry HIV.
**
Some time ago, I spoke to Ashok Alexander, director of the Bill and Melinda Gates Foundation’s Aids programme here, and he told me that India was teetering at a tipping point in this epidemic. He said it was time to mount the largest prevention programme the world had ever seen: over a year’s gone by and I don’t see that happening.
India may no longer be in denial, but it sure doesn’t like criticism. When Richard Feachem, head of the Global Fund to Fight Aids, TB & Malaria told the government it was “not doing enough”, he was severely admonished.
Education
My last point on the theme of human capital concerns education. The number of children attending primary school has gone up many-fold since Independence and universal access is within sight. But several major problems persist.
The education system is wracked by a shortage of resources, schools, classrooms and teachers. Of India’s 700,000 rural schools, only one in six schools have toilets, which deters girls from attending.
Due to poor teaching, a third of children drop out before completing five years of primary school and many of those who stay on learn little.
Literacy rates – currently 70 per cent – are misleading. A recent study found that 38 per cent of children who have completed four years of schooling cannot read a small paragraph with short sentences and that 55 per cent can’t divide a three-digit number by a single-digit one.
A big reason why India has the world’s largest child labour force – 55m – is that schools serving the poor are of such low quality that the expected return on education is not equal to the sacrifice of income made in school years.
Although India produces millions of graduates annually, the raw numbers, as company after company finds in its recruitment drives, are a misleading metric for employable skills.
While 3m students graduate from Indian universities each year, only about 25 per cent of engineering graduates and 10-15 per cent of general college graduates are considered suitable for employment in the offshore IT industry, according to a recent study by Nasscom.
Kiran Karnik, the Nasscom president, describes the paradox of the Indian labour market nicely: “While some young men, on the brink of starvation, desperately look for work, employers elsewhere look - with almost similar desperation - for appropriate people to fill tens of thousands of vacancies.”
He added: “Our education system is not producing enough people with the skill-sets our economy needs. This could seriously stymie India’s economic growth.”
The lobby group has warned that the Indian IT sector faces a shortfall of 500,000 professionals by 2010 that threatens the country’s dominance of global offshore IT services. Shortages are kicking in even though, according to Nasscom, only 10 per cent of an estimated “addressable” market of $300bn for global offshoring is being tapped today.
With the industry as a whole struggling with annual employee turnover rates approaching 40 per cent, wage inflation is rising. Reports out this week in the Business Standard indicate that a shortage of skilled labour has resulted in salary increases of 22 per cent during the first half of fiscal year 2007 for the corporate sector as a whole, That figure is the highest it’s been in over three years, with the biggest jump coming from service industries, including banks, airlines, IT and telecom companies; where salary bills have risen by 30-50 per cent in just a year.
Companies that have offshored production to India in anticipation of savings are feeling the pinch of labour markets that have tightened much more rapidly than expected. Recruiting and retaining skilled workers is becoming harder and more expensive than ever.
For an outside world that harbours an image of a system churning out hard-working, numerate, techno-savvy and English-speaking graduates in their millions, the crisis in the country’s education system and the dire quality of the graduates that emerge from it should come as something of a shock. A focus on the successes of a small number of elite schools, especially the Indian Institutes of Technology and Indian Institutes of Management, has left an exaggerated impression of the depth of the talent pool created by the country’s education system.
Rajiv Kumar, director of the International Council for Research on International Economic Relations, describes the overall state of Indian higher education as “dismal”, and therefore posing a “severe constraint on the supply of qualified manpower.” The government has pledged a “massive investment” in higher education.
And Prime Minister Manmohan Singh has warned that India “cannot continue to claim to be a rising ‘knowledge power’ if less than 8 per cent of its college-going age group is enrolled in the college and university system.”
Yet with the government struggling to lift spending on education to 6 per cent of GDP, I am not confident that the current skills shortages will be a two-to-three year squeeze, as many feel. I think it’s much more structural.
To sum up, India is in my view facing a profound demographic crisis. It is clear as day that it is going to struggle to find jobs for its enormous working-age population.
The further down the skill chain you go, the more massive the glut of unemployable labour. Agriculture’s share of GDP has fallen to barely 20 per cent from 32 per cent in 1991 but is struggling to provide a livelihood to the 700m who live in rural areas.
As a result, migration to the cities is occurring at an unprecedented rate, not because of a pull effect from genuine economic opportunities there, but a crude push away from the land. At the same time, because of strict labour laws, industry is no longer the sink for low-skilled labour that it once was but has gone ultra high tech.
Look at Bharat Forge, world leader in crank shafts, based down in Pune. It basically employs only engineers: it hardly has any blue-collar workers at all. Engineers may earn more than blue-collar workers, but their productivity is so much higher that they have made Bharat Forge the most competitive producer of automotive forgings in the world. It exports more than half its Indian production.
I recently asked Baba Khalyani, its chairman, to explain why employment elasticities continue to decline in Indian manufacturing. “Manufacturing jobs will get created but it will not be like before, when unskilled labourers from rural areas got work,” he said. “What makes Indian manufacturing competitive today is technology, not cheap labour. We tried it the other way around before and it didn’t work.”
Jobs are the missing element in the Indian economy today and job-generation will be the key to India sustaining its blistering growth rates. IT software, back-office services and research and development activities are all booming.
But none of these, however, has jobs for the underprivileged, the undereducated and the underskilled. A million mutinies are bubbling up across the country, with the most alarming being the ultra-leftist Naxalite movement, and they are deterring much-needed investment.
India will need to create jobs in large-scale, labour-intensive manufacturing to stop these protest movements from turning into something more serious. Only when there are massive Chinese-style factories making Barbies, Kickers and Gap shirts for a global market will there be jobs for those potentially otherwise tempted by extremism.
Yet to get there will require the government to relax labour laws that penalise large scale manufacturing and that force companies to use expensive labour-substituting technology rather than the cheap manpower that India has in abundance.
It will, above all, require the government to create the fiscal space for massive investment in human capital through health and education so that the productive potential of India’s young workforce can be fully utilised.
And of course, it will require a colossal investment in physical infrastructure, lifting infrastructure spending as a share of GDP to 7-8 per cent from 4.6 per cent, so that Indian companies can start plugging into global just-in-time supply chains.
If India acts urgently, it may well be next global economic powerhouse, as everyone wants to believe. If not, all bets are off.
Re: India's Bleak future - Employment crisis leading to social breakdown
From Hindustan Times:
India is a roaring capitalist success story.” So says the latest issue of Foreign Affairs; and last week many leading business executives and politicians in India celebrated as Lakshmi Mittal finally succeeded in his hostile takeover of the Luxembourgian steel company Arcelor. India’s leading business newspaper, The Economic Times, summed up the general euphoria over the event in its regular feature, ‘The Global Indian Takeover’: “For India, it is a harbinger of things to come — economic superstardom.”
This sounds persuasive as long as you don’t know that Mr Mittal, who lives in Britain, announced his first investment in India only last year. He is as much an Indian success story as Sergey Brin, the Russian-born co-founder of Google, is proof of Russia’s imminent economic superstardom.
In recent weeks, India seemed an unlikely capitalist success story as communist parties decisively won elections to state legislatures, and the stock market, which had enjoyed record growth in the last two years, fell nearly 20%in two weeks, wiping out $2.4 billion in investor wealth in four days. This week India’s Prime Minister, Manmohan Singh, made it clear that only a small minority of Indians will enjoy “Western standards of living and high consumption.”
There is, however, no denying many Indians their conviction that the 21st century will be the Indian Century just as the 20th was American. The exuberant self-confidence of a tiny Indian elite now increasingly infects the news media and foreign policy establishment in the US.
Encouraged by a powerful lobby of rich Indian-Americans who seek to expand their political influence within both their home and adopted countries, President Bush recently agreed to assist India’s nuclear programme, even at the risk of undermining his efforts to check the nuclear ambitions of Iran. As if on cue, special reports and covers hailing the rise of India in Time, Foreign Affairs and The Economist have appeared in the last month.
It was not so long ago that India appeared in the American press as a poor, backward nation, saddled with an inefficient
bureaucracy and, though officially nonaligned, friendly to the Soviet Union. Suddenly the country seems to be not only a “roaring capitalist success story” but also, according to Foreign Affairs, an “emerging strategic partner” of the US. To what extent is this wishful thinking rather than an accurate estimate of India’s strengths?
Looking for new friends and partners in a rapidly changing world, the Bush administration clearly hopes that India, a fellow democracy, will be a reliable counterweight against China as well as Iran. But trade and cooperation between India and China is growing; and, though grateful for American generosity on the nuclear issue, India is too dependent on Iran for oil to wholeheartedly support the United States in its efforts to prevent the Islamic Republic from acquiring a nuclear weapon. The world, more interdependent now than during the cold war, may no longer be divided up into strategic blocs and alliances.
Since the early 1990s, when the Indian economy was liberalised, India has emerged as the world leader in information technology and business outsourcing, with an average growth of about 6 per cent a year. Growing foreign investment and easy credit have fuelled a consumer revolution in urban areas. With their Starbucks-style coffee bars, Blackberry-wielding young professionals, and shopping malls selling luxury brand names, large parts of Indian cities strive to resemble Manhattan.
But the increasingly common, business-centric view of India suppresses more facts than it reveals. Recent accounts of the alleged rise of India barely mention the fact that the country’s $728 per capita gross domestic product is just slightly higher than that of sub-Saharan Africa and that, as the 2005 United Nations Human Development Report puts it, even if it sustains its current high growth rates, India will not catch up with high-income countries until 2106.
Nor is India rising very fast on the report’s Human Development index, where it ranks 127, just two rungs above Myanmar and more than 70 below Cuba and Mexico. Despite a recent reduction in poverty levels, nearly 380 million Indians still live on less than a dollar a day.
Malnutrition affects half of all children in India, and there is little sign that they are being helped by the country’s market reforms, which have focused on creating private wealth rather than expanding access to health care and education. Despite the country’s growing economy, 2.5 million Indian children die annually, accounting for one out of every five child deaths worldwide; and facilities for primary education have collapsed in large parts of the country (the official literacy rate of 61 percent includes many who can barely write their names). In the countryside, where 70 percent of India’s population lives, the government has reported that about 100,000 farmers committed suicide between 1993 and 2003.
Feeding on the resentment of those left behind by the urban-oriented economic growth, communist insurgencies have erupted in some of the most populous and poorest parts of north and central India. The Indian government no longer effectively controls many of the districts where communists battle landlords and police, imposing a harsh form of justice on a largely hapless rural population.
The potential for conflict — among castes as well as classes — also grows in urban areas, where India’s cruel social and economic disparities are as evident as its new prosperity. The main reason for this is that India’s economic growth has been largely jobless. Only 1.3 million out of a working population of 400 million are employed in the information technology and business processing industries that make up the so-called new economy.
No labour-intensive manufacturing boom of the kind that powered the economic growth of almost every developed and developing country in the world has yet occurred in India. Unlike China, India still imports more than it exports. This means that as 70 million more people enter the work force in the next five years, most of them without the skills required for the new economy, unemployment and inequality could provoke even more social instability than they have already.
For decades now, India’s underprivileged have used elections to register their protests against joblessness, inequality and corruption. In the 2004 general elections, they voted out a central government that claimed that India was “shining,” bewildering not only most foreign journalists but also those in India who had predicted an easy victory for the ruling coalition.
Many serious problems confront India. They are unlikely to be solved as long as the wealthy, both inside and outside the country, choose to believe their own complacent myths.
*The Guardian
(The writer is the author of Temptations of the West: How to Be Modern in India, Pakistan, Tibet and Beyond)*
Re: India's Bleak future - Employment crisis leading to social breakdown
One more...
China and India 'top bribe list'
Firms from China and India are most willing to pay bribes abroad to do business, a survey suggests.
Anti-corruption group Transparency International (TI) put the two countries at the top of its Bribe Payers' Index of 30 exporting nations.
French and Italian firms were named as the worst culprits for paying bribes in low-income countries.
TI said its survey showed that efforts to introduce anti-corruption laws had yet to slow the problem.
"It is hypocritical that OECD-based companies continue to bribe across the globe, while their governments pay lip-service to enforcing the law," said TI chief executive David Nussbaum.
"The enforcement record on international anti-bribery laws makes for short and disheartening reading."
Big exporters
The annual survey, which complements TI's Corruption Perceptions Index measuring the apparent readiness of countries' officials to accept bribes, used responses from more than 11,000 businesspeople in 125 countries.
Countries whose firms are least prepared to pay bribes:
Switzerland
Sweden
Australia
Austria
Canada
Countries whose firms are most prepared to pay bribes:
India
China
Russia
Turkey
Taiwan
Source: Transparency International
It ranks respondents' experience of which countries' firms are most prepared to pay bribes.
TI said it focused on firms from the 30 biggest exporting states, which between them accounted for more than 80% of all world exports.
The placing of China and India as the home of firms most prepared to pay bribes may partly be the result of the two countries' rapid industrialisation and their push for resources, analysts said.
Russia, too, was near the bottom of the table.
On the other hand, Switzerland was ranked as the home of the firms least likely to use off-the-books payments to officials to get business done, with Sweden and Australia close behind.
The UK was sixth in the list of 30, with the US joint ninth with Belgium.
France, however, was at number 15 and Italy at number 20 - with respondents in Africa singling them out as much more prone to bribes than other Western states.
This, TI said, suggested a double standard - with a number of Western companies cleaning up their act close to home while continuing to pay bribes outside the industrialised world.
"Although Italy and France are singled out for mention, the UK cannot escape criticism," said Segun Osuntokun, partner at international law firm DLA Piper, "There have been no prosecutions in the UK in recent times for corruption overseas - even though we have ratified the OECD Convention on Bribery and it was given effect to in 2001. There were too many conflicting and ancient laws covering corruption, Mr Osuntokun said, described by the Law Commission as "obscure, complex, inconsistent and insufficiently comprehensive".
Re: Karma Capitalism
Nice argument Mr Denada
Is India getting realistic and more mature?
The World Economic Forum’s annual India summit is usually filled with Indian leaders (Babus) trying to woo foreign investors by extolling the virtues of the Great county INDIA in flowery hyperbole but this year the talk was straight. The three-day conclave that ended Tuesday focussed much on the downside of the past decade’s economic boom and the challenges India faces, while underlying prospects for businesses in a country of 1 billion consumers.
Is India getting realistic and mature?
India Confident About Economic Risks
Tuesday November 28, 10:29 am ET
By Rajesh Mahapatra, AP Business Writer
India Shows Confidence, Openness About Risks Confronting Economy
NEW DELHI (AP) – The World Economic Forum’s annual India summit is probably best known for the hyperbole of Indian leaders eager to woo foreign investors by extolling the country’s virtues.
That’s what made this year’s straight talk so remarkable.
Alongside the usual boosterism at the three-day conclave, which ended Tuesday, there was much talk about those left out the past decade’s economic boom, and the challenges faced by India, a county of 1 billion people, many of whom remain desperately poor.
“There is an India of bursting growth, and there is an India of widespread want,” said Sonia Gandhi, the Italian-born leader of the governing coalition, who often has the last word on major policy decisions.
“There is an India of new aspirations, but there is also an India of unequal history and unequal opportunities,” Gandhi told 700-odd delegates to the summit. “This is the reality of India.”
Some said the tone at the summit pointed to a “confident India” that no longer needs to brag.
Others said it is a sense of realism that has dawned upon both the government – which realizes growth without equity is not sustainable – and business executives, who appreciate there is no country that is all about opportunities.
Prime Minister Manmohan Singh set the tone on the opening day of the summit, saying he was far from satisfied with India’s economic growth – averaging more than 8 percent in the past three years.
Singh told delegates India needs to grow even faster and that such expansion should be able to lift a large number of people who still live in poverty rather than benefiting a minuscule population, mostly living in the cities.
“Inclusive growth has become a buzzword. (But) We need a lot of work to give it a concrete meaning and substance,” Singh said at tea reception he hosted for the visitors.
**
About 40 percent of India’s population lives on less than a dollar a day, more than a third can’t read or write, and a fifth of its people have no access to safe drinking water. Poverty and unemployment are fueling insurgencies and communist rebellion in many parts of the country.
There are some new concerns as well, such as the spread of AIDS and growing terror attacks that could affect the country’s economic prospects, said government officials attending the summit.
**
Many delegates said they noticed a clear shift from the past.
“I have been in meetings like these before where (Indian officials) promised you the world and everybody knew that wasn’t true,” said Helmutt Schutte, a Singapore-based professor of international management.
“This time they all sounded so realistic. It’s a good sign. It’s the first step into maturing,” Schutte said.
The summit began with a discussion of three scenarios, including one that predicted a possible social and political backlash could derail the economy if gains from high growth are not evenly distributed.
Another session focussed on six major risks faced by the Indian economy. These included a potential water shortage, volatile global oil prices, spread of HIV infections, population growth, climate change and a spike in protectionism among India’s trading partners.
The openness with which government officials spoke about these issues was assuring for businesses, Schutte said. “You then know that they are going to do something about it.”
Organizers of the summit said they worked on this year’s theme to make sure there is no impression that India is all about opportunities.
“That would be naive,” said Lee Howell, Asia head of the Geneva-based World Economic Forum.
“The story so far was how India has, or would benefit from a ‘flat world.’ But there are risks in a ‘flat world’ that can impact India’s economic future. That is why we are talking about risks,” Howell said.
Several ministers spoke frankly about the risks and how in the past these would get pushed under the carpet. Many appreciated the frankness.
“It’s a sign of a confident India. An India that knows its strength and its weakness as well,” said Arun Maira, the India head of Boston Consulting Group.
Business executives too were speaking differently.
They didn’t harp on how India’s infrastructure bottlenecks – congested ports, potholed roads, frequent outages – could slow growth and discourage foreign investors. Instead, they see new opportunity for foreign companies that build infrastructure projects.
Also, few complained about India’s slow pace of economic liberalization, saying they appreciate the compulsions of democracy.
Businesses are increasingly partnering local companies to get into the Indian highly protected market, which has slowly opened to foreign competition over the past decade.
This week’s alliance between U.S. retail giant Wal-Mart Stores Inc. and India’s Bharti Enterprises is a case in point.
Despite years of lobbying by company like Wal-Mart and Germany’s Metro AG, the Indian government hasn’t changed rules that bar foreign companies from opening multi-brand retail stores here. But there is no ban on foreign companies from making wholesale purchases from India to support their global supply chains.
Wal-Mart finally got around the rules by partnering with a local company. Under the deal, the U.S. company will invest mostly in the back-end operation such as procurement, inventory management and logistics, while Bharti will run the stores.
When the news of the alliance came in Monday, the chief of Metro AG – Wal-Mart’s German rival – was speaking at the summit, repeating his suggestions that India change its rules to allow foreign companies into multi-brand retailing.
“You lose (if) you want to wait till the last brick of the wall falls,” Howell said. “Figure out a strategy and just get in.”