Rana Dasgupta - Capital - The Eruption of Delhi

Since this speech, the Indian economy has grown by as much as 10 per cent per annum, overtaking those of Canada and Russia to join the ten largest economies in the world. So it is striking in retrospect how cautious and apologetic Singh was in putting forward his system — a system which, from our position of hindsight, has the feeling of inevitability. He gave the strangest of performances, bending over backwards to his point: for though he laid out a clear plan for the deliberate and far-reaching destruction of the old economic regime, it was cushioned all around with paeans to socialism and to Nehru — as if the only viable way to present this departure was as continuity, even consummation. He seemed terribly anxious to suggest that his was a profoundly Indian project, and that ‘traditional’ attitudes towards the outside world would be preserved: he reiterated, for instance, the familiar abhorrence of the “mindless and heartless consumerism we have borrowed from the affluent societies of the West”. And at the end, having declared that India would now integrate with the global economy, he issued his battle cry — “we shall overcome” — a quotation from a familiar protest song from the old days which, while it might have reassured his audiences that values were intact, was totally incongruous in the context: against which oppressor was it now directed? But it was a speech that was all the more revealing for its muddlement: for if Singh’s metaphors were confusing in their present context it was because they were time-travelled from Nehru’s own. No orator himself, it was clear through his cadences that the finance minister was trying to assert fidelity to the nation’s great speech-maker:

. . as Victor Hugo once said, “no power on earth can stop an idea whose time has come”. I suggest to this august House that the emergence of India as a major economic power in the world happens to be one such idea. Let the whole world hear it loud and clear. India is now wide awake. We shall prevail. We shall overcome.

Singh’s implausible attempt to arouse here invoked Nehru’s announcement of Indian independence from the battlements of Delhi’s Red Fort. “At the stroke of the midnight hour,” he had declaimed as 15 August 1947 chimed in, “when the world sleeps, India will awake to life and freedom.” Since India had awoken so spectacularly in 1947 it was of course somewhat anti-climactic to announce, in 1991, that it was still awake, but you could see what he was trying to do.

For Singh’s anxiety about how to own up to this revolution was well-founded. Already there had been outrage that the nation’s gold had been flown to the vaults of the old colonial masters. And now there was widespread disquiet about the new strategy, and about the role of foreigners — the IMF — in its formulation. As the New York Times put it, “India, which still views itself as a socialist nonaligned leader, views [economic reforms] with pain, even embarrassment… This will be seen as a kind of interference with India’s autonomy.” 4

In our era, when we have lost our sense of the global power of the Soviet-sponsored system — and indeed of the ‘non-aligned’ movement advocated, among others, by Nehru — we recognise only one kind of ‘globalisation’. It is difficult for us to imagine anymore, therefore, how a vast nation could have chosen to remove itself from this particular form of globalism, or to remember how dangerous and disloyal a prospect embracing it might have seemed only twenty years ago. India’s entry into the global system, like that of so many other countries around the same time, was not the smooth reversion to a natural state it is so often imagined to be in our now-seamless capitalist world (which has lost so much of its comprehension and empathy for variety and alternative). It was in many respects a humiliating defeat for everything on which the country’s greatness stood, and it generated a schizophrenic legacy. India ‘came into’ globalisation in the same sense as someone ‘comes into’ an inheritance: with a sense both of new economic possibility, and of crippling bereavement. Money would arrive; but everything exalted and nurturing was passing away, and nothing could replace it except a flood of baseness.

I drive past a billboard advertising a television business channel. It shows the radiant face of a businesswoman and the caption, “1 hour of viewing can impact your bottomline”.

Since the photo ends at the woman’s neckline and we cannot see her “bottomline”, I assume the text is supposed to read “bottom line”. But she does look very smug about something.

“The first people we interviewed declined the jobs we offered them because they thought we were loony to imagine we could work for international corporations out of India. They all thought Indian standards were too low.”

I am sitting in the office of Raman Roy,* CEO of Quatrro, a business process outsourcing company. Raman has little round glasses and wears an informal checked shirt. In his early fifties, he has an avuncular, and strikingly egalitarian, manner.

“There were so many disbelievers,” he continues. “They didn’t believe that we were capable of that quality. They had a fundamental problem imagining that an Indian could do a white man’s job. We still look up to white skin in this country.”

But as things turned out, it could be quite the reverse.

“Sometimes our employees had to apologise for doing a better job than the people who taught them. That has changed how they think. They realise they don’t have to feel they’re inferior to anyone.”

• • •

The opening of Nehru’s Independence speech, one of the most quoted passages of all twentieth-century rhetoric, contains a glaring error.

When it is midnight in India “the world” does not sleep. When it is midnight in India it is tea time in London and cappuccino time in San Francisco. And, as it turned out after 1991, there were billions of dollars to be made from this rudimentary geographical fact.

If there was one commercial development that became iconic for the new, globalised India, it was ‘business process outsourcing’ (BPO). The idea was that, given the state of contemporary telecommunications, a company’s various functions did not all have to be grouped in one place. They could now be distributed throughout global space with no loss to functionality. Enormous cost savings could be achieved by moving non-core activities to lower-wage locations. Though this redistribution had already begun elsewhere in the world, it was the entrepreneurs of post-liberalisation India, above all, who turned the theory into a world-changing reality. And one of these entrepreneurs was Raman Roy.

At the moment of liberalisation, Raman was working for American Express, one of the foreign companies that had remained in India since British times. In the new climate of the 1990s, Raman helped convince his US bosses to consolidate the company’s Asia-Pacific accountancy work in Delhi, where costs were low, and educated English speakers plentiful.

Perhaps it is difficult to remember now just how unlikely this must have appeared at the time. India seemed remote and primitive to most Americans, and the idea of moving a significant chunk of an American financial giant there was unorthodox to say the least. But as with many eccentric ideas, this one helped the people concerned to see the world in a different way. Over time, American Express transferred more and more of their ‘back office’ operations to Delhi — and Raman realised that there was a hitherto unimagined kind of value locked up here.

By the middle of the 1990s, a number of immense forces were converging on this little experiment. In India, the lifting of restrictions on business and capital continued apace, and investment funds flowed in to fuel the resulting entrepreneurial frenzy. One group of companies that rose very quickly to prominence was the new IT firms, founded mostly in the south of the country. The most dazzling of these was Bangalore-based Infosys, which in 1999 was listed on Nasdaq, where its valuation a year later hit $30 billion. This ascendancy derived not simply from the fact that these companies were delivering software systems to global corporations at half the cost of their American counterparts. No: their Indian location allowed them to compress not just money but also, and just as importantly, time. Indian consultants worked alongside their US clients during the American day and then sent a brief to India, Indian software teams worked through their day — the US night — and American clients could view the results first thing in the morning. Two working days had been extracted from one. By the time Raman Roy was thinking about cutting up American corporations and placing their various functions in different parts of the world, he could see several other people in India who were trying to bend the world in similar ways.