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Hal Licino

Capindialism: India Leads in Tech but Inequality Still Prevails

Oct 25 2011, 07:17 PM by

When the British Empire relinquished its hold on India and Pakistan and granted their independence in 1947, they left more than railroads, a legal system and a language behind. They also left an indomitable entrepreneurial spirit that built upon the inherent mercantile genius of the inhabitants of the sub-continent. That this spirit managed to survive decades of the Indian government’s dalliance with pseudo-Communism and the recent blooming of Bollygarchism has been nothing short of phenomenal. Although most observers focus on the staggering diversification of Indian manufacturing giant Tata Group, the vibrancy of entrepreneurial achievement is present on every street corner, from snowy Warshi to steamy Anjugramam.
Overcoming the License Raj
Between independence and 1990, Indian business was subject to the License Raj, where up to 80 government agencies had to sign off before a private company could produce a widget, and even then the volume and type of production was fully subject to regulation by the vast bureaucracy. Not surprisingly Indian business stagnated to Iron Curtain levels until the liberalization movement opened up free enterprise to almost Western levels. The pent-up release of capitalism changed the face of India within a decade, and although the monolithic family-owned megafirms still dominate the stock market, the sheer number of startups in the billion+ population of the country seems to grow exponentially.
A Telemarketer Earns 4x as Much as a Police Officer
The conventional joke about Indian labor centers around call centers and telemarketing, where it seems that no matter which toll free number is dialed in the United States, the accent on the other end is more likely to come from Chhattisgarh than California. It is not a laughing matter for the owners of these call centers, who pocketed $5.5 billion last year, as well as the overall outsourcing operators that represent annual sales of over $70 billion. Given that 41% of the population survives on less than $1.25 a day, the standard monthly paycheck at Indian call centers of $250 is considered lucrative employment. A worker at an Indian call center earns on the average four times as much as a police officer for a considerably less dangerous job.
HP Monthly Paychecks Start at Under $300
An Indian software developer or engineer can expect to earn $500 a month, which is about the cost of a nice lunch in Silicon Valley. Even when the IT ladder is climbed all the way to Project Manager, the total compensation is still generally below $1,500 a month. The depressed pay scales are not limited to Indian-native companies, as paychecks at IBM Global Services India start at about $350 a month and are even lower at Hewlett-Packard where some monthly checks bearing the HP symbol are issued for under $300; a sobering amount considering that fired CEO Leo Apotheker took home $25 million as his reward for 11 months of service where he managed to halve the company’s stock price.
41% Below Poverty Line but 75% Have Mobile Phones
Not all capindialism is set in the gleaming high tech towers of Mumbai, New Delhi and Hyderabad, as technology and its respective profits have found their way to the most remote corners of the nation. In a country where extreme poverty is so widespread it is almost incomprehensible that there can be over 900 million mobile telephone subscribers, which constitutes nearly 75 percent of the entire population.

Yet India continues to present a high tech paradox: a nation where inhabitants of mud huts type out web content for the princely rate of 50 US cents per 500 words while a magnate builds the world’s most expensive private home in the center of Mumbai at a cost of $1 billion. India’s rising tide is expected to lift all boats, but there will inevitably be some who will be left behind in the mire.

Posted in Tech Editorial

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