Growing pains

Behind India's astonishing growth rate lies an economy that can do the impossible, but fumbles the m

For India's newspapers and television, the country's story is of a resurgent nation of 1.1 billion people taking its rightful place in the new world order. Daily headlines in the capital, New Delhi, highlight the runaway stock market, Bollywood's soft superpower and India's 36 dollar billionaires - more than in any other Asian nation.

Despite the exhausting hyperbole, what strikes most people when they arrive is the apparent functional chaos. Cattle roam the city's poshest avenues and ragged street children beg alongside foreign-made cars and glitzy malls.

The old idea of India, of a vast and ancient civilisation mired in righteous poverty, is being overshadowed by strikingly new images. The country's pharmaceutical companies are developing blockbusting drugs at a tenth of the cost of any western firm. Its software powerhouses are adding 15,000 jobs a year each to ensure that India becomes the world's IT department. But the success of the hi-tech sector is still to make an impact on the lives of the 360 million people who live on less than 50 pence a day.

There is little doubt that India is experiencing a rapid and sustained rise in living standards for the first time in centuries. Growth has averaged 8 per cent since 2003, second only to China. According to the investment bank Goldman Sachs, India's young population gives it the potential to grow faster than China in the long term.

For many Indians this is exhilarating stuff: in the 1970s the country threw out Coca-Cola and IBM and sealed itself off from the outside world. Heady stuff, but ultimately economic folly. Growth slowed to 1 per cent a year - at that rate it would have taken 70 years to double incomes. Tentative reforms began in the 1980s, but it took a balance-of-payments crisis in 1991 for the government to usher in unexpectedly brave changes. Today, India's outward-looking, hypercompetitive policies as well as the trend towards smaller families mean incomes will double in a decade.

Yet it will remain a poor country. Last month, government figures showed that malnutrition is endemic, with about 46 per cent of children aged three or younger underweight and almost 80 per cent anaemic. Less than 50 per cent of women can read or write their name. Only a third of homes have a toilet. The country is probably the world's largest Dickensian paradox - having both the best and the worst of times.

The puzzle is that India is economically confident, yet sunk in interminable poverty. This is because most Indians live in a vast rural, feudal darkness and only a lucky few are part of the shining new future. Services, essentially white-collar work, makes up more than half of national income. But this does not mean that tens of millions of Indians sit behind terminals talking to someone in New York or London. Information technology, the poster-boy industry of India's economy, employs just 1.5 million people - a mere drop in the labour pool of 470 million.

Even worse, only 35 million people in India have any sense of job security and 20 million of those work for the government. The rest of the working population - some 435 million people - are part of "the unorganised sector": toiling on the land, or driving a taxi, or running a chai stall, or working as menial household labour.

In India, growth has been largely jobless. Historically, dynamic economies have relied on industry to fuel growth. In China, this led to millions of people leaving the land to work in factories. But during the 1990s, industry actually shrank as a proportion of the Indian economy. There is rural migration, too, where the sons of tillers leave to eke out a precarious existence as security guards and drivers in the big cities.

The problem is reaching crisis point. Each year another ten million people enter the job market. To soak up the labour, India will have to build up its manufacturing sector quickly. This might sound like a return to the past - India's first prime minister, Jawaharlal Nehru, wanted his country to rush towards industrialisation.

But Nehru pursued a strategy that would build up the country's technological capacity, not employ people. He set about institutionalising innovation and spent money on a network of world-class science universities rather than universal primary education. Nehru built huge dams. He took pains to create an atomic industry and cultivate brilliant scientists.

In a sense, he laid the foundations for an idiot savant economy that can do the impossible but fumbles the mundane. India turns out more scientists than far wealthier China, but cannot get all its children to school. While the country's business houses prowl the world picking off weaker western companies, they cannot acquire land at home because villagers protest violently against forcible takeovers.

This disparity in productivity is India's greatest asset and liability. Workers in the private organised sector are ten times more productive than those in the "unorganised sector". The emphasis on capital-intensive growth has helped India achieve impressive results with fewer resources. It is estimated that in 2007, India will grow at 9 per cent - a fraction behind its larger northern neighbour. Remarkable, given that India is achieving this growth with just 50 per cent of China's investments and 10 per cent of China's foreign direct investment.

Hoping for a miracle

But the flipside is that while new management graduates in India are offered 10,000 rupees (£120) a day in salaries, cotton farmers struggle to make 10,000 rupees in a whole season. Crossing between these two worlds rarely happens because it requires workers with skills, education and opportunity. India will have to pour more money into health and education as well as create the kinds of industries that can offer the rural poor a chance out of poverty. It needs to change its labour laws - at the moment you need government permission to shut down a factory with 100 workers in it. Clearly this is a deterrent to setting up shop in India.

For the first 1,500 years of the past two millennia, India and China dominated the world economy. Then came the western industrial revolution, which propelled smaller and less populous nations to wealth and power. The Asian giants were overtaken first by Britain, then by the rest of Europe, and finally by the United States. But in the same way as commentators refer to the 1900s as the "American century", the 21st century is forecast to be Asian. If the scale and speed of growth can be maintained on both sides of the Himalayas, by 2050 Beijing and Delhi will be the capitals of the two richest nations on the planet.

It is worth being sceptical about such claims. Historically there is no precedent for such a transformation. Britain and America took a century each to achieve primacy and had far fewer people to deal with. India and China have a billion-plus people each. Both nations expect to maintain growth rates of near 10 per cent. "What these two countries propose," wrote Willem Buiter of the London School of Economics, "is growth on a scale that is more than 200 times larger than what the UK and US managed." Such events are not beyond the bounds of possibility, but they have never happened before.

Randeep Ramesh is the Guardian's south Asia correspondent

Martin O’Neill for New Statesman
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1966 and all that

A year of World Cup glory, meeting Paul McCartney and eating placenta.

Fifty years ago this Saturday, on 30 July 1966, I was at Wembley. I have my ticket and my programme to prove it. I also have my 1966 ­diary, which I am looking at now. I was 30, weighed ten stone and eight pounds, and my waist was 32 inches – about as hard to believe now as England winning another World Cup final.

I am still in the same house, all these decades later, but my telephone number then was GUL 4685. GUL was short for Gulliver, I can’t remember why. In my list of contacts at the end of my diary is Melvyn Bragg, who was another recent arrival in London from Cumbria, like myself and my wife, on PRO 0790. PRO stood for Prospect, I think, which was the exchange name for somewhere over the river, possibly Kew.

My office number was TER 1234. I always thought that was a great and memorable number. It’s only now, thinking about it, that I realise that TER – meaning Terminus –
probably related to King’s Cross, which the Sunday Times was near in those days.

At the top of the charts in July 1966 were the Kinks with “Sunny Afternoon”, which I can well remember, as it was so ironically chirpy, and Georgie Fame with “Getaway”. I liked Georgie Fame – low-key, cool – but I can’t remember that tune. Both were replaced in August by the Beatles’ “Yellow Submarine”/“Eleanor Rigby”.

My day job in July 1966, on the Sunday Times staff, was writing the Atticus column. It still exists, but in a smaller, more skittery format. Previous incumbents included Ian Fleming, John Buchan and Sacheverell Sitwell, who was reputed to have got free Mateus rosé for life after giving the wine its first mention in an English newspaper.

I had been on the paper since 1960, after spending two years as a so-called graduate trainee journalist, mainly in Manchester, which was a laugh. There was no training and there were no lessons in law. You had a mentor for a few weeks and then you got on with it.

In my first few years as the boy on Atticus, I never had my name in the paper. I had to write dreary paragraphs about who might be our next man in Washington, or the bishop of London, or the master of Balliol, as if I cared. I wanted to write about footballers, gritty northern novelists, pop stars.

When I started at the Sunday Times, I felt for a while that people were prejudiced against me, because I was northern and working class and had gone to grammar school and a provincial university (Durham). Everyone else seemed to have been at Oxbridge and gone to public school.

But this prejudice was all in my head, imagined, just as it had been when I used to go from Durham to visit my girlfriend, Margaret – whom I married in 1960 – at Oxford. I was convinced that some of her posh friends were being condescending ­towards me. Total nonsense, but I had a chip on my shoulder for some years. Gone, all gone, just like my 32-inch waist. (I am now 12 stone and the new shorts I bought last week have a 38-inch waist. Oh, the horror.) If anything, these past 50 years, any prejudice has been in my favour.

Harold Wilson was the prime minister in 1966. His northern accent was even stronger than mine. I still have a letter from him, dated 21 March 1963, after I interviewed him for Atticus. In the letter, he ­describes the 1938 FA Cup final in which Preston beat Huddersfield Town 1-0, scoring in the last minute of extra time. At the bottom of the page, in handwriting, he’d added: “after hitting the crossbar”.

What I remember most about the interview was George Brown, who was deputy to
Wilson as Labour leader at the time, hanging around outside his office, drunk. Marcia Williams, Wilson’s secretary, was going around tut-tutting, making faces, complaining about George. I thought she shouldn’t have done, not in front of me, as I was a total stranger and a hack. (I don’t think we called ourselves hacks in those days, which is the normal, half-ironic self-description today.)

Harold was a football man and also a real know-all, forever boasting about his memory for facts and figures. The contents of this letter illustrate both aspects of his character. It led me later to collect a letter or autograph from every prime minister, going back to Robert Walpole. Only took me ten years.

There is a myth that England’s 1966 win helped Labour stay in power – which does not quite stand up. The general election was in March – four months before the final. But Wilson did milk England’s victory, identifying himself and the nation with our English champions.

It is possible that the reverse effect happened in 1970, when Wilson was chucked out and Edward Heath came in. England’s defeat at the 1970 World Cup by West Germany was just four days before the June general election.

***

I got my ticket for the 1966 World Cup final – for one of the best seats, priced at £5 – from my friend James Bredin, now dead, who was the boss of Border Television. Based in Carlisle, Border covered the Scottish Borders and the Isle of Man. It was a thriving, thrusting regional ITV station, now also deceased.

James’s chauffeur came to pick me up and waited for us after the match, a sign of the importance and affluence of even minor ITV stations. Border contributed quite a bit to the network, such as Mr and Mrs, starring Derek Batey, who presented 450 editions of this very popular national show. Batey was a local lad who started his show business life as an amateur ventriloquist in the little market town of Brampton, Cumbria, before becoming Carlisle’s Mr Show Business. He was so polished – lush hair, shiny suits, so starry, so glittery – that I always wondered why he was not in London, in the West End.

Border TV also produced some excellent documentaries that were networked across the ITV region, two of which I presented. One was about walking along Hadrian’s Wall and the other was about George Stephenson. For a while in the 1970s, I began to think I was going to become a TV presenter, despite being not much good. I was lousy at acting, which you need for television, and disliked asking questions to which I already knew the answers. And it took so much time. For each programme, we spent eight weeks on location with a crew of eight, just to make a one-hour documentary. Now they
do docs in a week with just two people.

For half an hour, I also imagined that I was going to become a playwright. In 1967, I had a play in the BBC’s Wednesday Play slot, awfully prestigious at the time, called The Playground. It was one of those shows that were filmed live and then wiped, so I have never seen it since, nor has anybody else. I blamed that for blighting my playwriting career, though till I was looking in my 1966 diary and saw that I was working on that play, I’d forgotten about its existence. As we go through life, we forget all the paths not trodden.

I’ve boasted endlessly about being at the 1966 Wembley final, and it was so exciting, but I can’t remember many of the details. I must have been aware of Geoff Hurst’s second goal being a bit dodgy, as there were loud complaints from the German fans, but as Sir Geoff, as he then wasn’t, went on to score a third goal, it didn’t really matter. At the time, I considered that the England-Portugal semi-final had been a better game, with our Bobby Charlton scoring two goals against one from Eusebio, but of course winning a final is winning a final and the excitement and the patriotic pride continued for weeks and months. We felt as if it had been our right to win – after all, did we not give the game to the world, lay down the first rules, show all those foreigners how to play our game?

The result was that we usually ignored all the new ideas and developments that were emerging from Europe and South America, carrying on with our old ways, stuffing our faces with steak before a game and knocking back six pints afterwards, a bit like Alf Tupper in the Rover comic. He lived on fish and chips, but on the race track he could beat anyone.

Those funny Continental players started playing in funny lightweight boots, more like slippers or ballet shoes, which seemed barmy to us. How we scoffed. How can you play properly, far less kick someone properly, unless your ankles are encased in hard leather as tough as steel? Who cared if they weighed a ton, especially in wet weather? We Brits were tough.

The top First Division stars of 1966 earned about £200 a week, including bonuses, and lived in £20,000 houses, semi-detached, on new estates with Tudor overtones. The top players drove Jaguars. But most were lucky to afford a Ford Cortina. I had one myself for a while. Awfully smart, or so I thought at the time.

Their basic wages were little more than double that of the best-paid working men, such as a foreman bricklayer or a successful plumber. Their neighbours on their estates were bank mangers or salesmen, a higher scale socially than their own background, but still fairly modest. Not like today. Footballers don’t even have neighbours any more. They are cocooned in their own gated mansions, with personal staff, gardeners, nannies, accountants, lawyers, agents.

Yet despite their modest lifestyles in those days, there were celebrity players, such as Bobby Moore, Bobby Charlton and, before them, Billy Wright, all household names, loved and admired, recognised everywhere.

None of them had an agent in 1966. The nearest thing to it was the system that operated if a team got to the FA Cup final. They would then agree to divvy up the peripheral proceeds, such as money from giving newspaper interviews, posing for staged corny photographs, opening shops, or selling their spare tickets to touts (which they were not supposed to do). They’d appoint some dodgy friend of one of the senior players to arrange the deals and collect the monies for them. Times, they always change. Otherwise, what’s the point, eh?

***

In 1966, two big events occurred in my personal life. In May that year, my son, Jake, was born – at home, in what is now our kitchen. He arrived so quickly that the midwife hadn’t turned up yet and he emerged with the cord twisted around his neck. I managed to untie it, which I have maintained since kept him alive (a trick I had learned at fathers’ classes).

Fathers’ classes – wow, what a novelty that was in the 1960s. Who says we were all chauvinist pigs back then? (Today’s young, female star writers at the New Statesman, probably.) I attended my first ones, at the Royal Free Hospital in 1964, when our firstborn, Caitlin, was about to arrive. I remember immediately thinking when the invite came that I would get 1,000 words out of this – which I did, for the Sunday Times women’s pages.

Also at those first-ever fathers’ classes at the Royal Free was a young BBC producer whose wife was also about to give birth: Wilfred De’Ath. He, too, was desperate to get a piece out of it. (He now writes occasionally for the Oldie, and he appears to be down and out and living in France.)

After Jake’s birth, I got the midwife to give me the placenta and I ate it, fried with onions. Tasted like liver. Another 1,000 words.

The other event of note in my ever-so-exciting life in 1966 was meeting Paul McCartney. When “Eleanor Rigby” came out, I thought the words – not just the tune – were so wonderful. Possibly the best poetry of the year, I said, as if I knew anything about poetry. I went to see him for Atticus in his new house in St John’s Wood, which he still has, being a very conservative feller. I talked to him about the background to the lyrics, as opposed to his hair, which interviewers were still asking him about.

A few months later, at the end of 1966, I went to see him again, wearing a different cap, as a screenwriter. I’d had a novel published the previous year, Here We Go Round the Mulberry Bush, which was being made into a film, with Clive Donner directing. We went to see Paul at his house and discussed with him if he would do the theme tune. He turned us down in the end but it was while I was with him that I suggested that there should be a proper biography of the Beatles. He said Brian (Epstein, the band’s manager) would have to agree – and there and then sat me down and helped me write a suitable arse-licking letter to him.

I eventually saw Brian, after several cancellations, at his home in Belgravia and he played me the acetate of “Strawberry Fields Forever”. I was astounded. It seemed to break every rule of what was then considered pop music. I wondered if all Beatles fans
would take to it. But I could see that it was amazing and perhaps the Beatles weren’t finished, which was what some people were saying in 1966. At my publisher, Heinemann, which paid me £3,000 for the book, there was one director who maintained the Beatles bubble was about to burst.

Brian agreed to my project and offered a clause in the contract that we had not requested or even thought of. He said he would not give any other writer access to the Beatles for two years after my book came out. This was 1966. The book came out in 1968. Two years later, in 1970, the Beatles were no more. Without realising it at the time, I became the only authorised ­biographer of the Beatles.

***

So, 1966, a big year for me, so glad I kept that diary, and also a big year for the nation. I thought at the time that the Beatles were bound to fade, eventually, while England surely would dominate world football from now on. After their humbling by Iceland at this year’s World Cup, I now realise that England will never win the World Cup again in my life, what’s left of it. And probably not even another game.

The only way to rationalise it is to tell ourselves that we are ahead of the game. We are rubbish, but in turn it will happen to all the other so-called advanced nations.

You could say Brexit is a bit like that. We are ahead of the other leading European nations in going it alone, even though it is depressing and awful and shameful. We are advanced in wilfully turning ourselves into a rubbish nation. We are leading the way, as ever. Inger-land, Inger-land.

Hunter Davies’s memoir of the postwar years, “The Co-op’s Got Bananas!” (Simon & Schuster), was published in April, followed by “Lakeland: a Personal Journal” (Head of Zeus). His final book on the Fab Four, “The Beatles Book” (Ebury), will be published on 1 September

Hunter Davies is a journalist, broadcaster and profilic author perhaps best known for writing about the Beatles. He is an ardent Tottenham fan and writes a regular column on football for the New Statesman.

This article first appeared in the 28 July 2016 issue of the New Statesman, Summer Double Issue