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For richer or poorer: Its stunning success may tear India apart

JOHN STACKHOUSE returns to find the nation he once
called home caught in a perilous tug-of-war between
its impoverished, overpopulated north and a highly
prosperous south unwilling to share the fruit of its
high-tech labours. 'We have to go forward, not backward.'

Saturday, February 17, 2001

The 1,200 kilometres that separates their homes cannot match the gulf that lies between their lives -- the sheer exuberance of Sunil Gajakosh's existence in southern India and the utter despair of Mema Devi in the north.

In a remote corner of Uttar Pradesh state, Mema Devi struggles every winter to find enough money to feed her eight children until summer when her only crop of the year can be harvested.

Her country boasts one of the world's hotter economies and is starting to call itself a "software superpower," but the best job the exhausted mother can find is in a quarry 100 kilometres from home, hauling stone on her head for the equivalent of 10 cents an hour.

"This should be the season of wheat but all the fields are naked," she says, surveying barren land that was supposed to be irrigated in the 1970s but remains untouched by modern agriculture. "Food, land, employment -- everything is in shortage."

Like every other woman in Misirpur, her village, Mema Devi has never been to school or laid eyes on a computer. The closest she and her neighbours have come to the new economy was a literacy course that taught them last year to sign their names, the first time any of the women had been able to put more than a thumbprint on paper.

That image is enough to make Mr. Gajakosh wonder if the northern half of his nation is not stuck in a different century -- "the 17th century," he says derisively.

At a glance, Mr. Gajakosh would seem ill equipped to make such a crack. He is from the south, traditionally the poorer part of India, and his parents were migrant workers from the "untouchable" caste now known as Dalits.

Mr. Gajakosh grew up in Dharavi, the shantytown in central Bombay, and had to drop out of school in Grade 10. But like southern India itself, he got into computers. Today, at 32, he runs a Web-design company in a back alley and trains scores of other slum dwellers to write software programs for clients in the far-off United States.

He still lives in Dharavi, but Mr. Gajakosh has earned enough to buy a plot of suburban land, begin building a bungalow and set aside enough money to purchase the ultimate Indian dream, a new car.

"The south is developing like mad, but the north is not," he says as he checks e-mails from a customer in California. "Maybe the north will collapse," he sighs. "I don't know."

India has long struggled with fissures over caste, religion and language, and with extraordinary gaps in living standards, between maharajahs and peasants and more recently between cities and villages.

But a full decade after the country of one billion people abandoned its socialist past for a new market-driven future, it is struggling with a growing regional divide that threatens to become its biggest challenge of all.

If the divergence continues -- with Mr. Gajakosh's vibrant south going the way of East Asia and Mema Devi's stagnant north following a trend closer to that in Africa -- it could splinter a country that in only 53 years of independence has become a democratic model to the developing world.

Mr. Gajakosh's state, Maharashtra, is already three times wealthier, in per capita terms, than Uttar Pradesh -- and growing six times more rapidly. Its residents pay as much tax as Uttar Pradesh and Bihar combined even though they have three times the number of seats in Parliament.

In 20 more years, if things don't change, the average Maharashtrian will be 10 times richer than the average northerner -- as great a gap as now exists between Canada and El Salvador. (The wealthiest Canadian province, Alberta, had real per capita GDP of $34,453 in 1999, compared with $20,820 in Newfoundland, the poorest.) Another formerly poor southern state, Tamil Nadu, already is closer to Malaysia in economic and social development terms than to its big northern counterparts, where 400 million people live in four economically depressed states that are largely illiterate, unhealthy, feuding and, since the economic reforms were introduced, growing poorer.

To share the wealth, the Indian government has proposed introducing Canadian-styled equalization payments. But southern leaders, fed up with the northern malaise, recently rejected the notion and are lobbying New Delhi for more decentralized powers over natural resources and tax revenue.

"If you are going to give more money for poor states [in the north], we will also become poor," warned Chandrababu Naidu, chief minister of Andhra Pradesh, a southern state of 71 million people that has attracted the likes of Microsoft Corp. and Oracle Corp. to its capital, Hyderabad.

"We have to go forward, not backward."

The equalization payments would cost each of the south's big four -- Andhra Pradesh, Karnataka, Maharashtra and Tamil Nadu -- hundreds of millions of dollars a year of tax revenue. The money would go mainly to Bihar, Madhya Pradesh, Rajastahan and Uttar Pradesh -- the four large northern states long known collectively as Bimaru, coincidentally the Hindi word for "sick."

No one seriously believes that the south, even with languages, food and cultures that are alien to the Hindi-dominated north, would go so far as to demand independence -- at least no more than Texas or Alberta might. In Tamil Nadu, separatism has not been popular since the 1960s, largely because India's military strength, growing global importance and giant domestic market are too important to the state's well-being.

But the economic divide is forcing a country that is set to overtake China as the world's most populous to rethink its identity. Should India aspire to be a strong nation-state that could tower over its region and challenge China or a loose federation that thrives on individual success?

The rifts that are redefining the country began to break open 10 years ago, but in ways that few predicted. In 1991, India was on the verge of insolvency, having lost an important economic ally in the Soviet Union just when its own model of state planning was on its last legs.

To earn an international rescue package and woo back the sort of foreign investment it had chased away in the 1970s, India embarked on a new market-driven economic course.

Since then, the south -- historically, the country's poorer half -- has taken off, with economic growth rates that now rival China's. From Bombay (officially called Mumbai) to the high-tech capital of Bangalore and the southern Tamil centre of Madras (renamed Chennai), the region increasingly is seen as an international player in computer software, rocket science, satellite launching and auto manufacturing.

The confidence had spread to western Gujarat before last month's earthquake ruptured the state, killing as many as 30,000 people while razing swaths of hastily built apartment blocks and shopping centres. But even in grief-stricken Gujarat, some believe the state can rebuild its devastated western region in a matter of years, not decades.

In Bombay, which considers itself the capital of the new south, such confidence is palpable even in the depths of Dharavi. Home to 250,000 people, the slum was all but written off for decades as urban blight, the sort of cost a fast-growing city such as Bombay had to bear as it moved ahead.

In the 1980s, Mr. Gajakosh was forced to leave school for financial reasons. He found a job outside the slum, in an advertising firm, and enrolled with his brother, Ishwar, in a private computer school at night. They also began to teach others, using old computers and pirated software.

Today, their 50 or so students pay $150 each for a one-month course they expect will bring them more than that in their first month on the job. With pretty much every graduate guaranteed employment in the city's booming information-technology industry, they will be considered failures, their teacher says, if they don't make $400 a month -- more than most north Indians earn in a year.

"It all depends on talent," Mr. Gajakosh says.

On the side, he works for Xisource, an Indian-American venture, in which he is a member of a virtual Web design team split between Bombay and San Francisco. The job pays enough for him to have recently bought a 550,000-rupee ($18,000) plot of land in New Bombay, where he is building an 800,000-rupee ($27,000) bungalow so that his entire family can leave the slum.

"It's not amazing," he says of the ambition that seems to ooze everywhere. "Many people in Dharavi have B.Sc.'s and international jobs."

There is still some extraordinary poverty in Dharavi, and the biggest industry is sorting garbage, not designing Web pages. Along the fringe of a fetid swamp that drains the city's waste, there are makeshift warehouses in which women and children spend their days picking through garbage for plastics to be recycled.

And yet hovels have given way to small homes remade with bricks and corrugated iron roofing that invariably sprouts wiring for electricity, telephone connections and cable TV.

At the other end of the wires, where the alleyways meet the open road, there are Pepsi stands, public telephone booths with international-call services and -- the newest Dharavi addition -- Chinese-food stalls that offer home delivery within the slum.

Reflecting the new mood, Bombay's most enduring movie star, Amitabh Bachchan, has shifted his career to television, becoming the subcontinent's Regis Philbin as host of Kaun Banega Crorepatti? (Who Wants To Be A Millionaire? in Hindi). A crorepatti is someone worth 10 million rupees, only about $330,000, but in just one season the show has become a ratings champion.

More southerners, however, are becoming crorepattis the old-fashioned way. From 1991 to 1997, Maharashtra state alone saw its per capita income, after inflation, grow by nearly 40 per cent.

During the same period, the north's sprawling Uttar Pradesh, with a population of 160 million, saw its economy expand by only 5.8 per cent, while that of neighbouring Bihar's 96 million people actually shrank by 3 per cent.

(The central government created two small new states in the north last year to address growing local anger over the inability of administrators to deal with the region's endemic poverty.)

The south's main cities -- Bombay, Hyderabad, Bangalore and Madras -- are now international software centres, each with its own international airport and special ties to such places as Singapore and the Silicon Valley.

When India allowed foreign auto makers to re-enter its market in the 1990s, Tamil Nadu lured some of the world's biggest producers with generous tax incentives and land deals. Ford Motor Co. set up a plant near the capital, Madras, with a capacity to produce 100,000 cars a year, and said it would use the centre as a new base for its South and Southeast Asian operations.

Foreign aid donors have been so impressed by the new progressive south that they, too, are channelling their money there in the hopes it will inspire similar changes in the north. For now, it has inspired mostly resentment of the successful southern states, which have been nicknamed "champions."

"International donors are accentuating the divide in their new-found love of 'champion,' states," Digvijay Singh, chief minister of Madhya Pradesh, warned recently.

But the south's best decisions were made decades ago when states like Tamil Nadu sharply increased spending on basic rural education, women's and children's health care, family planning and affirmative action programs for the lower castes.

Today, according to a study by the Madras School of Economics, the four large southern states have levels of health, education and household assets that are about 50 per cent higher than in the north.

More remarkably, the southern states are speeding up their reforms. Tamil Nadu has launched a program to lay 2,000 kilometres of fibre optic cable and produce 30,000 graduates a year in science and engineering.

In neighbouring Karnataka, where India's so-called Silicon Plateau is based in the state capital Bangalore, the government has launched a two-billion-rupee program ($67-million) to provide computer training to 300,000 students in 2,600 government schools.

Not surprisingly, 69.3 per cent of the state's girls between 6 and 10 are enrolled in primary school. In Uttar Pradesh, the rate is 45.6 per cent.

"I do feel the south is more progressive," Mr. Gajakosh says. "North India still lives in the 17th century.

"They're so stupid. Casteism is very bad. They still have untouchability," he adds, referring to the segregation of Dalits that is now seldom seen in the south.

In the alleyways of Dharavi, education quotas for his low caste gave Mr. Gajakosh opportunities that his uneducated parents never had. He benefited from free school fees, books and uniforms until Grade 10.

And although he turned down government jobs that were available under affirmative-action programs, he knew his place in society was more secure than his parents' had been. "We have reached something," he says. "No one can exploit me."

While caste quotas have existed on paper in the north for decades, they were implemented only recently, and still often favour only the caste that has won political power.

It is the sort of social struggle that Mema Devi and her neighbours know all too well. In Misirpur, the local Kol tribe has seen government promises come and go, while their land deteriorates under the scorching pressure of a rapidly growing population.

"During Indira Gandhi's time [in the 1970s], the situation was better than it is now," says Mohit Kol, the village's pradhan or chief. "The road was constructed and the canal was built. People could get wages out of those projects. Now, there is no employment. The wages are nil."

While southern farmers have generally profited from the age of economic liberalization, with a new generation of horticultural exports, much of the northern countryside remains unchanged from decades ago -- except that it must cope with a population that has doubled since Mrs. Gandhi's time.

According to a major study published last year by the World Bank, the overall rate of poverty in the four Bimaru states as well as the eastern state of Orissa was about the same in the late 1990s as it was in the 1960s. Moreover, the north's poverty rate was about 50 per cent higher than the south's, compared with a gap of only 7 to 8 per cent in the 1980s.

The government itself admitted recently that 250 million Indians, or one-quarter of the population, are undernourished and do not get two meals a day. One-third of all children and half of pregnant women are anemic, it said. And most of them live in the north.

"The realities overshadow our achievements and burden our national conscience," said Prime Minister Atal Behari Vajpayee, a northerner like all but three leaders since independence, a trend that is not unnoticed in the south.

With such concern at the highest levels of government, India is now rethinking its economic reforms, at least the aspect that cut decades of public spending in impoverished rural areas in the hope that private investment would fill the void.

After a decade of cutbacks in eastern Uttar Pradesh (almost the Cape Breton of northern India because decades of big government spending programs have not ended poverty) unemployment is higher, poverty is worse and migration is the norm.

The most recent National Sample Survey, a government-commissioned survey of household spending patterns, found that in 1998-99 only 417 adults out of every 1,000 in the countryside were formally employed -- the lowest level in 20 years. Only five years earlier, the number was 444 per 1,000.

In Misirpur, the only public health-care facility is run by a private charity and the only contraceptive widely available is sterilization.

Mema Devi says she had eight children because "it was the natural course." In a rural culture that still curses a girl child as a burden on parents, she had four girls in a row and then four sons.

Last month, she finally accepted a free tubectomy and a government gift of 150 rupees (about $5).

With six to eight children in every family, the size of landholdings around Misirpur has dwindled to the point where most young people must move to towns and cities, at least for part of the year, to earn enough money to buy food. Yet down on the plains there are so many young people looking for work that employers routinely flout the state's legal minimum wage of about $1.50 a day.

"We have to listen to promises that we will get more," says Budhana Devi, a neighbour who every winter takes her three children to the quarries where they live in makeshift tents and miss a term of schooling. "When we get there and the money and food is less, what can we do? If we protest, we will lose our jobs."

As has been the case for centuries, the people of Misirpur are still governed by fear rather than the hope that shapes Mr. Gajakosh's life. They have never heard of the program Crorepatti as their village has no electricity, let alone television. They have not heard of the Internet either.

Most of the village's hopes seem to rest in a different sort of gamble, their local member of Parliament. Everyone in Misirpur knows their representative in New Delhi is Phoolan Devi, the notorious former "dacoit," or robber, known as India's "Bandit Queen."

A low-caste woman who was raped in the 1970s and then allegedly killed her assailants, and dozens of other upper-caste men, Phoolan Devi joined a Robin Hood-style gang that stole from the rich and gave to the poor. She eventually surrendered to police and spent 11 years in jail, without a trial. Upon her release, she was elected to Parliament.

Now in her second term as an opposition MP, Phoolan Devi has become a public champion of the poor and oppressed. She was the person who got the Misirpur school its teacher and, to many women in the village, is their great hope for more assistance.

But when the MP stopped in the village last year during a visit to the area, she showed why her new calling is not very different from her dacoit days. Before the village, she promised to build every family a new house. The money would come from New Delhi, she said, which means mostly from the south. In 1998, it paid 41 per cent more tax than the north despite having 120 million fewer people.

To the former Bandit Queen, the resonance of her promises 1,200 kilometres away may not have mattered. In north Indian politics, the motto remains: Take from the rich, give to the poor.

The principle made for a hit movie, Bandit Queen,about Phoolan Devi's past. If it becomes a script for India's future, southerners like Mr. Gajakosh can at least take solace in one fact: The money-spinning film is now owned by Mr. Bachchan, the king of the Bombay crorepattis.


Back to the village
John Stackhouse returns to Biharipur,the hamlet he introduced to Globe and Mail readers during his years as correspondent in New Delhi.

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