Inequality, poverty, and corruption are the flip side of the coin of profitability in Indian metropoles. But if profitability thrives on inequality, then who would bother about the poor or the corruption of our moralsIJ
Our metropoles Delhi and Mumbai now offer to weave the dreams that cities such as Dubai did in the 1980s for Indians. No need to cross the seas anymore. In search of a livelihood, thousands of Indians now relinquish their small towns every day to move to live in Delhi and try their luck. Every year, there are more new residents in Delhi and its suburbs (making the population of Delhi now three times that of Switzerland or double that of Sweden!) arriving with hope in their eyes and a few things or skills to sell. In a big city, chance is blind, the stakes are high, and fortune can strike anyone who dares to come and try.
The city itself is stretching at its seams. While the centre remains calm, on the peripheries there is more action. There are apartments to be built — from the luxurious to the ghastly — catering to the wide array of affordability. New roads, bridges, and metro lines are needed to be constructed to connect the expanding corners of the city. While hospitals and doctors are in demand more than the current supply, so are new schools in every budget bracket. Tapping on the opportunity, large global firms have set up offices inside freshly constructed multistoried glass buildings, attracting talent from around the world to live around the office spaces. The volumes of new money and aesthetic tastes flowing into the city is as massive as the thirst to splurge it on ever more sensory distractions and constant stimuli that can be only quenched by newer malls, shopping choices, and cinema halls. The demographic and architectural landscape of Delhi is rapidly transforming, by the grace of the combined force of a deluge of manpower and financial capital into the city.
Indeed investors have come in with their chequebooks, vying for projects that promise them a windfall of profits. Some businessmen have struck gold by manufacturing new products and marketing it right. The opportunity to do so is tremendous given that there is much to build and provide to Delhi’s teeming millions.
In most successful businesses, profitability is driven by the stark inequalities in their own heath. Businesses that tap into Delhi’s obscene income gap — producing where income is low and selling where it is high — have done well. Just as example, labour cost for production of furniture is pittance whereas there is ready purchasing power in Delhi for that furniture even at 10 times its cost price. A good look around the city would indicate that the majority of the businesses are owned or run not by millionaires, but by ordinary Indians. In fact, I would argue that there is no middle class in Delhi. The middle class upwards strata in our metropole actually constitutes the elite of the Indian society — standing out not necessarily because of its accomplishments but because those below them live in such desperate unenviable conditions. But it is this unfortunate and gaping disparity in resources available to the poor and the middle class — both cohabiting the same space — that creates opportunities for cost arbitrage useful for business.
Usually, in the long run, economic development produces a more equitable distribution of income, but in the short run, the immediate impact of economic growth often exacerbates the difference between the ‘haves’ and ‘have nots’. But the nature of many of the successful Indian business models — be it in services or manufacturing — is such that as long as inequality thrives, these businesses will profit. The Indian middle class is thus dependent on the poor to keep itself afloat, and they have little incentive to alter this.
Indeed we should be careful with the assumed causality of poverty on corruption, but inequality does breed a desire to take shortcuts to success. We want what our neighbour has, and we want it fast even if that requires us to bend or break rules. It is not necessary but indeed plausible that a persisting macro variable, such as poverty, has its influence on the morality and actions of an individual.
In a catch-22 situation of sorts, gradually the actions of individuals also set the norm. This is when those who are corrupt do not regret it. Reactions such as “Everyone was doing it” or “It was a favour for a friend” or “I still think I did nothing wrong” become commonplace. There are social factors that work through the individual, and vice versa. And so, unless poverty annihilation is also part of the anti-corruption agenda, we might never be able to end corruption. Around 17 lakh people or 9 per cent of the total population in Delhi continue to live below the poverty line, making do with an income less than Rs1,134, per month — this is a vulnerable population that can be easily exploited for corrupt objectives.
And so, inequality, poverty, and corruption are the flip side of the coin of profitability in Indian metropoles. But if profitability thrives on inequality, then who would bother about the poor or the corruption of our moralsIJ
The writer is Chief Sustainability Officer for the group of companies, Jindal Steel and Power ltd.
She is a Global leadership Alumna of the World Economic Forum. miniya.chatterji@jindalsteel.com