The western media portray two starkly contrasting views of India. On the one hand is the India of startling economic success, of call centers and Mumbai highrises—a high-tech country that has developed its own nuclear arsenal and sent a probe to the moon. Since the liberalization of the Indian economy in 1991, foreign economic investment has poured into India, and foreign brands and services have appeared in the country: MTV, Subway, Pizza Hut—and as of 2012, Starbucks. It is an India of private cars, smartphones, Facebook, and Twitter. In many ways, the lives led by the residents of this India would not be unfamiliar to a resident of North America or western Europe.

The other image of India is almost completely different from the first. This is the India or grinding urban poverty, as memorably (if sentimentally) portrayed in the popular and critically-acclaimed British film Slumdog Millionaire. The residents of this India live in squalid slums, where sanitation is poor and health care is nonexistent. Not surprisingly, they do not patronize Pizza Hut and have no way of watching MTV.

But as separate as these two Indias may seem, they are actually linked. One could not exist without the other. In the landmark book Small Is Beautiful, E.F. Schumacher described the “unhealthy and disruptive” tendency of developing countries to form a “‘dual economy,’ in which there are two different patterns of living as widely separated from each other as two different worlds.”1 This is what has happened in India; economic liberalization has only accelerated a process that was already well underway. Pavan K. Varma’s 1998 book The Great Indian Middle Class offers a shocking view of how the privileged classes—those who patronize foreign businesses, own cars, and now use smartphones—began to ignore the economic plight of the poorer classes and look out for themselves only. In the process, they tolerated rising corruption as a necessary component of economic advancement. The urban poor became the servants of the increasingly wealthy, and increasingly socially-irresponsible, privileged classes.2

The dual economy was impossible to ignore when I spent a summer in Jaipur, the capital of Rajasthan. Jaipur is far from India’s largest or most prosperous city; it is India’s eleventh-largest, by population. But the contrast between the two economies was shocking, even in Jaipur. The following pictures illustrate some of the contrasts of the dual economy.

Reports of India’s economic success are greatly exaggerated. Trickle-down economics have simply not worked in India. No economic growth can be considered genuinely successful if it bypasses the majority of a country’s population.

  1. E.F. Schumacher, Small Is Beautiful: Economics as if People Mattered (New York: Harper, 1973), 164. []
  2. Pavan K. Varma, The Great Indian Middle Class (New Delhi: Penguin Books, 1998). []