India's Poor Aren't Getting Richer. Here's Why.

cobbler

Umrao Singh, a cobbler in Delhi, isn't cashing in on India's economic growth. (David Kestenbaum/NPR) hide caption

itoggle caption (David Kestenbaum/NPR)

Here's the latest dispatch Planet Money's David Kestenbaum brought back from India. A version of this story is also airing today on All Things Considered.

India's economy is growing fast. The country's producing billionaires.

But there are still hundreds of millions of poor Indians who don't even have electric power to switch on a lightbulb. And the gap between rich and poor is getting wider.

So here's the question: Is that just what happens in fast-growing economies? Or is there something wrong in India?

In Delhi, you can walk by a construction site where a mansion's being built — three floors, bathrooms with Italian marble, a swimming pool in the basement — then turn the corner and meet a short old man, furiously polishing shoes. His name is Umrao Singh.

He says he's 75 years old. His store, if you want to call it that, is the space between two stacks of bricks that function as walls.

Singh figures he makes maybe $2 a day. He sleeps on the ground in his shop. If he gets sick, he eats the leaves from a nearby tree.

"Nothing I can do about it," he says. "I think what is written is written and you cant change it."

The usual route for poor people to stop being poor is to find new, higher-paying jobs as the economy grows. Typically, for the very poorest, the first rung on that ladder is a manufacturing job.

"I'm not romanticizing manufacturing jobs," says Partha Sen, director of the Delhi School of Economics. "But so far as I know the only way out of poverty for hugely overpopulated economy is through manufacturing."

But India's manufacturing industry is small. And the parts of the economy that are growing, like the IT sector, aren't creating the kind of jobs that people from the villages can get. Umrao Singh, the cobbler, can't work in a call center.

I went back to hang out with Singh that night. He was cooking some Indian flat bread on top of a stove made of bricks that he'd set up over a manhole cover.

Singh told me he's content with what he has. But then his neighbor piped in.

"Remember how you told me," the neighbor says, "that in the next life, you wanted to be born into one of those nice apartments across the street?"

They both laughed.

Check out Kestenbaum's previous India stories:

* The Economics Of Bribing A Cop
* In Search Of The Red Tape Factory
* How An Indian Entrepreneur Learned To Love Paying Bribes

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