Third Worlds within a Third World

My job takes me to various cities in India and the breathtaking diversity never ceases to amaze me. India is clearly a multitude of nations within a country. Needless to say, what is germane here is not the cultural diversity but the seemingly vast economic variations that seem to exist in this country. Over the last few months, I have visited Delhi, Hyderabad, Chennai, Kolkata, Kanpur and Patna (from Bangalore where I live). You don't need to be a trained economist to realize that some of these cities - Delhi, Bangalore, Hyderabad, Chennai are on the opposite ends of the economic spectrum from Kanpur and Patna, with Kolkata somewhere in between. While there is the glitz, frenetic construction and the quintessential urban chaos that accompanies rapid and unplanned growth that is unmistakable in a Bangalore or Chennai, the opposite is true of Kanpur and Patna. It is almost as if the much talked about economic growth has bypassed these cities. This is not to say that the richer cities have managed to get rid of poverty - on the contrary, economic disparities may be growing wider in these cities. Despite that, there is an unmistakable feeling of optimism that comes with economic growth - a feeling that is conspicuously absent in a Patna or a Kanpur. There is no better place to see this than the railway station - the one institution that seems to capture the city's economic spectrum in a microcosm. While the Bangalore station even has a wi-fi hotspot, an internet cafe and umpteen Coffee Day kiosks, the Kanpur station is a drab, crumbling edifice dotted by just a couple poorly maintained kiosks. Walk out of the station and the differences are even more stark - the Kanpur station transport system is dominated by cycle-rickshaws, which are fast dwindling (thankfully) in places like Bangalore, Hyderabad and Chennai. In fact the single most striking fact in a Kanpur or a Patna is the vast number of cycle rickshaws that ply on the roads. One obvious reason for this is the fact that as older industries (e.g. tanneries in Kanpur) dwindle and are yet to be replaced by the newer ones, the surplus labour is driven to take up jobs with extremely low entry barriers like ferrying people. One naively optimistic view here is that some enterprising entrepreneur can spot an economic opportunity in these cities for setting up labour intensive industries (obviously, there is a lot more to an attractive investment opportunity than surplus labour). A more likely (and depressing) scenario is that these economic disparities are likely to continue to grow - as the richer states and their cities hope to climb into an economic virtuous cycle while the poorer states are forced to languish in their economic quagmires.

At a more macro-level, such intra-country variations, combined with other political trends (most notably the growth of regional parties) could lead to newer forms of friction. One obvious outcome of this disparity is the growing migration within the country. While little research seems to have been done on the demographic shifts driven by economics, there is growing intolerance on regional lines - the recent events in Mumbai being an example. Further, it is not inconceivable that some of the richer states begin to push back against the current taxation system, where the federal structure translates to the richer states subsidizing the poorer ones, something that is currently an undisputed outcome of the socialist nature of the Indian economy. One scenario could be a push towards a more decentralized form of taxation (moving towards a strongly regional bias similar to the Swiss system of Cantons). This, in a sense, will be an affirmation of the fact that this is a nation of individual states who were brought together by an accident of history and not bound together by a compelling cultural or economic glue. And if and when that happens, the already uneasy nature of this lop-sided growth could take a much uglier turn.