There has been much news here recently surrounding the tension and violence in three provinces, Assam, Orissa, and West Bengal (the first a northeastern state, the other two coastal states along the Bay of Bengal). Assam's conflict is by far the bloodiest and longest-running, the result of a well-organized, ethnically-based militia fighting the national (and to a lesser degree, state) government, as well as attacking "mainland" Indians who have migrated to the region.
In Orissa and West Bengal the conflicts are primarily over the seizure of land by the communist-oriented state governments, and the land's sale and assignment to private corporations for purposes of industrial development in something that might resemble Chinese capitalism. The farmers whose lands were taken have to some extent been compensated and offered jobs, but what good is a TATA factory job to a independent, fifth-generation farmer who doesn't want to sell his land or change his lifestyle?
India has designated these land areas as "special economic zones" and claimed eminent domain for the economic good of developing the region, but the violent political backlash that has been seen in Orissa and WB suggests that either the compensation has not been acceptable to the landowners, or that the government and the companies involved here have mistaken forced industrialization for participatory economic development.
But today, juxtaposed to these "backlash" stories in my inbox, were two more announcements of U.S. venture capital investment in India from Mayfield and Norwest. Also of note was an article stating that VC and PE firms had invested roughly $7.5 B in India last year, triple the amount in 2005.
It seems that while on one side of the Indian diamond, farmers and nationalists are fighting factories and beating up bricklayers, on the other side in Bombay, ferengi dollars are flowing through the India Gate at record levels. I mention the two sets of stories in parallel as I think they typify the growing divide between the new India and the old one, and more pointedly, the rich country here, and the poor one.
Today in his comments at the Sa-Dhan conference in Delhi, Vijay Mahajan, IIT grad and CEO of the MFI BASIX, drew a diagonal line across India starting at the northern tip of Punjab, slicing down through the central state of Madhya Pradesh and heading across Orissa to the coast, suggesting that "if you could map the lines of economic inclusion in India, this is what they might look like." Going further, he stated that if investors, development professionals and the government did not focus on improving service delivery and overall quality of life in these Northern and Eastern states, India would not only miss its hoped for target of 8-10% annual GDP growth, but the country might also begin to see fault lines forming for another type of political partition, this time between the nation's haves and have-nots.
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