Sunday, January 13, 2008

Nano’s entry brings Indian paradox into focus

Anil Gulati

MEDIA IS full of interesting features and articles on the ‘Nano’, the world’s cheapest car, unveiled just a few days back in India. It is a statement of pride and an engineering marvel, no doubt. It is said that Nano will change the way people travel in India, particularly rural India. Hope it also helps in changing the rural infrastructure, like roads. Better roads will not only help Nano make inroads into the Indian market but also contribute to better connectivity for delivery of services like health. Better roads facilitate quick access to hospitals and the overall health delivery system; it can bring down the high infant mortality rates and maternal mortality rates. Rural India, with its impassable roads (the records state otherwise!) is the litmus test for Nano; many villages in India still don’t enjoy any road connectivity.

Media reports quoting Crisil Research state that Nano’s entry into the Indian transport sector could translate into a 65 per cent increase in the number of families that can afford a car. This would bring down the cost of ownership of an entry-level car in India by 30 per cent, making a new car affordable to families with an income of Rs 2 lakh per annum. The frenzy aside, we may also like to ponder over the plight of the other but bigger chunk of India which still subsists on less than a dollar a day and ekes out a living.

Recent media reports quoting World Bank, say 80 per cent of India’s 1.1 billion people live on less than two USD a day, meaning more than a third of the world’s poor live here. One out of every three Indians lives on less than one USD a day, meaning they are extremely poor. This brings to the fore India’s paradox and the major divide - many out of the 200 million, constituting the Indian middle class will go overboard to buy Nano; the other, which unfortunately is in a majority, will still struggle – something to ponder over, even as we celebrate Nano’s entry!

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