We continue our discussion on India’s economic development, and the gaining affluence of the middle class. Harish challenges the common statements that there is high economic growth, countering that the growth only affects a very limited portion of the population.
SM: So the middle class has created affluence. HH: 18% of the wealth is with 1% of the population. For me, that is scary. There are 80,000 auto rickshaws in Bangalore alone. People say that is a growth. How is that growth? These are 80,000 who cannot find a job, and the only other thing these people know to do is rent an auto rickshaw and drive it.
You have not created jobs in those sectors. You look at IT, software development, or you talk about financial sectors. They require a good education, English speaking capabilities, and you end up cutting off most of India by that requirement alone. How would the benefits trickle down?
SM: The real estate and retail sectors are developing well. HH: These are in concentrated geographical areas.
SM: There is no ambiguity that there is a huge population and a huge geographical area which is missing from the economic development impact. HH: I have not seen any jump from when we started in 1995 to now in the increase in rural incomes.
Where are we talking about the 8-9% growth? These industries contributed much since 1992, but it does not reach the rural area. In Karnataka, 70-80% of the people go to other areas because of the lack of institutions in their home areas. This is not even considering the other states which are way behind Karnataka.
SM: What is you parting message to entrepreneurs in the poverty sector, not only in India but globally? HH: Think long term, and have patience. There is no short cut to creating good processes. A lot of people try to solve it quick, and that can’t happen. Some people do it by numbers – reach 5 million in 3 years, and I will give you money. I would never do that. Concentrate more on the processes, and the numbers will come.
SM: Thank you very much, this has been a very enlightening conversation. Your way of life is a difficult one, probably very few people could pull it off. My sincerest admiration and congratulations for taking on something as fundamental.