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Thursday, July 17, 2008

IT Indusry & The Changing Life Styles in India

Let me start with a disclaimer that I no longer am an IT worker

In one of the discussions that we had at lunch today, a gentleman opined that IT might have enriched just 5% of Indians and rest of the 95% are still living a miserable life. He went on to say that IT has done more damage to India than anything good. He sights the examples of IT workers inflating the cost of living in major cities which is degrading the lifestyles of non-IT workers, other low end workers like masons, plumbers, carpenters etc.

I sat through this unpleasant conversation and wont agree with that thought process. In my opinion, industries don’t create just workers. They create ecosystems. The evolution of ecosystems will pass the benefits to non workers over time.

For instance, the IT jobs create demand for various things in their ecosystem. The new workforce needs new housing in new locations. This triggers infrastructure and real estate work. Indirectly, many workers, masons, plumbers, carpenters and daily labor get employed here. I’ve seen a group of 50+ construction workers migrated to my neighborhood in Bangalore, who narrate that they at least got some work to do and earn their daily food here. Had it not been this construction work, they were living a miserable life in a remote village of Bihar.

I know a small time carpenter in Bangalore. Ten years back, he used to roam around our colony, seeking any small household work which he can complete and earn few bucks. Over the past few years, he opened a shop in our colony and is selling good furniture to the new consumer class that was created by IT.

Household support services like maid, babysitter, personal assistants are making a living out of the new neighborhoods that are created by new industries.

The purchasing power of the Indian consumers is increasing, much to the chagrin of President Bush and the consumption by the new class of young affluent geeks is creating new jobs on the supply side.

Now, not surprisingly, the benefits are not constrained to the town where the job is created. I was glad to see the old barber who used to work near our neighborhood in our village, running his new AC saloon. Thanks to the IT boom, he sent his son to some computer course and the kid got a job in Hyderabad. With the son’s support, the old man now has his own shop and a better livelihood.

Recently, my dad sold off our farm land in village, as we could not supervise the crops regularly. In fact, it has been leased to the local servant for the past ten years or so, as the servant took care of the crop and emerged as a small time farmer. He sent his kids to engineering school and the kid is now employed in Singapore. I still vividly remember how this small time peasant who once was scared to stand in front of my grand parents. I am happy to see that the servant, turned into a small time farmer and now the owner of that farm land.

The bottom line is that, it is unreasonable to expect IT to benefit 100% of the population. We should be happy, even if IT or some other industry creates prosperity for 0.001% of the population.

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