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High-tech India Contrasts With Rural Ways

April 8, 2009 at 6:35 PM EST
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India has benefited from supplying other countries with outsourcing services from computer help to legal document analysis, while in other parts of the country poor farmers are struggling to make a living. NewsHour special correspondent Simon Marks reports on the two Indias.
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JUDY WOODRUFF: Now, part three of our series on India, a nation of high-tech innovation amid traditional poverty. Special correspondent Simon Marks reports.

SIMON MARKS, NewsHour special correspondent: It’s dawn in The Springs, a manicured suburb of new homes that look like they could be anywhere in middle America. Sprinkler systems water lawns, dogs bark, and Sirisha Gummaregula leaves home for another day in the office on the cutting edge of India’s economic explosion.

SIRISHA GUMMAREGULA, chief operating officer, QuisLex: It’s always for me exciting to go to work, because I think I control about, you know, maybe 40 percent of my day, and the rest, 60 percent, is, you know, things that are happening, you know, because you’re executing these really tight deadline projects.

SIMON MARKS: Sirisha lives and works in Hyderabad, a city in southern India that is in the vanguard of the country’s embrace of high-tech industries. So much so that one area of Hyderabad is even called “High Tech City”; the locals have dubbed it “Cyberabad.”

Sirisha’s office block houses several major industry players, including Google’s local operation. And it houses her own company, a legal firm called QuisLex, that she started when she returned to India five years ago after more than a decade working as an attorney in Manhattan.

SIRISHA GUMMAREGULA: I did not expect to stay as long as I did. My plan was to get a couple of years experience and then bring it back to India. But I was having a lot of fun doing what I was doing, and so progressed enough in the career, and then again started thinking about, you know, how to come back to India.

SIMON MARKS: And the difference between the India that you left and the India that you came back to?

SIRISHA GUMMAREGULA: Is yawning. It’s a huge difference.

Growth of high-tech sector

SIMON MARKS: A huge difference that is transforming the face of Hyderabad, and some other Indian cities, and reshaping the Indian economy. The growth of the high-tech sector has been the principal pillar helping India to achieve record GDP growth of more than 8 percent every year since 2004.

At QuisLex, the whole concept of outsourcing goes way beyond the Indian call centers that many U.S. companies now use to provide customer service. Sirisha's firm offers legal process outsourcing. It's provided by a stable of around 200 young Indian attorneys.

While the United States sleeps, they analyze legal documents e-mailed to them by American law firms. They comb through depositions, draft contracts, and do much of the basic grunt work that would otherwise occupy hours of billable time by more expensive U.S.-based attorneys.

SIRISHA GUMMAREGULA: You're looking at resources that have gone to a five-year law school, a very competitive, you know, law school. So to a certain extent, their analysis, you know, or the skill set that they pick up in Indian legal schools is no different, you know, than an American, you know, legal school.

SIMON MARKS: The combination of modern technology and a low-wage, highly competent workforce is helping QuisLex and its rivals to make sizeable contributions to India's growth.

The average attorney here earns around one-fifth of the salary their U.S. analog demands. And the company's founder says, in this area of the economy, demand continues to outstrip supply, as the recession leads more U.S. law firms to examine increasingly cost-effective ways of doing business.

SIRISHA GUMMAREGULA: Just before, I was sitting in a meeting with our operation folks and looking at a lot more additional space because we are hiring people rapidly. And there is work that we are turning down because we're not able to, you know, handle. So I don't see any of that changing in the next couple of years, definitely.

Economic growth slows

SIMON MARKS: It is easy to look on India as a country on the march. In Gurgaon, just outside the capital, New Delhi, the foundations have been dug for a series of new shopping malls and Western hotels, enormous holes in the ground that will soon be filled by buildings bearing familiar global logos.

The capital is also building a subway system. Some stations are already open; more will follow by the end of next year.

But due to the global recession, the economy is slowing down here. Growth estimates have been cut to 6 percent or 7 percent, still respectable under any circumstances and remarkable considering the contraction being experienced elsewhere, but it's a cut that alarms representatives of Indian business.

AMIT MITRA, Federation of Indian Chambers of Commerce and Industry: Having a positive 7 percent growth is certainly an advantage. But is that enough? No.

SIMON MARKS: Dr. Amit Mitra heads the Federation of Indian Chambers of Commerce and Industry. It represents 1,500 leading Indian enterprises.

AMIT MITRA: Every year, 9 million young people join the labor force in India because of the young population, and they need jobs. Three million people remain behind from the previous year who may not have found the ideal job.

So we have to have at least between 9 million to 12 million jobs creation. For that, we need 9 percent to 10 percent growth. So 7 percent, which is what we are growing at today, for us, is not enough.

Struggling agriculture industry

SIMON MARKS: To understand why it is not enough, you only have to drive two hours outside Hyderabad to the farming village of Picharagardha. These are scenes not often associated with modern India: an agricultural economy operating at its most rudimentary level.

Around 500 families eke out a living in these fields growing ginger, watermelon and wheat. They are emblematic of a much larger picture.

Two-thirds of India's billion-plus population -- that's more than 600 million people -- still live in agricultural communities like this one.

Here there isn't enough rainfall, so the villagers have built an elementary irrigation system supported by deep wells that they dig by hand. In a good year, farmer Shakeel Ahmed told us he can earn around $1,000 U.S. dollars to support a family of five.

SHAKEEL AHMED, farmer (through translator): There's nothing here. There's not enough electricity, not enough water. One has to work very hard, and you don't make enough money. There just aren't enough rewards for the work that we do.

SIMON MARKS: But there is an army of people still relying on the land to sustain them and to support them when they can't find, or lose, jobs in the cities.

Like villages all over India, what happens here is subsistence farming at its most basic. The farmers say that the ginger root in this storeroom will stay fresh for up to one year.

But while resources pour into India's high-tech sector, the agricultural economy is so undeveloped that fully one-fourth of the country's crops rot before they can ever be sold or eaten.

We spent almost a full day in the countryside outside Hyderabad, and only once did we see any sign of mechanization. This primitive threshing machine is shared by the farmers of Picharagardha and its surrounding villages, one example of what they say could be.

SHAKEEL AHMED, farmer (through translator): It makes me angry, but it's all down to fate. Of course, our life would be different if the government provided some facilities here. But the right kind of development is not taking place in India.

SUHEL SETH, managing partner, Counselage: I believe, by not concentrating on agriculture, we have created a quagmire of absolute concern at the lowest level.

Political tension

SIMON MARKS: New Delhi-based economist Suhel Seth says that, while the world focuses on the impressive economic growth being achieved in India's cities, it's failing to notice that the vast majority of Indians have yet to see any improvement in their daily lives.

SUHEL SETH: Ask the guy in a village. Ask the guy who doesn't have electrification. When you tell him about India "shining," and you tell him about "Brand India," and you talk about all this hype, and, you know, Indo-U.S. nuclear deal, it means nothing.

SIMON MARKS: There are political forces seeking to capitalize upon that. And even in Hyderabad's high-tech city, there are signs of communist imagery on the streets.

In rural districts in more than half of India's territory, Maoist insurgents called Naxals have emerged as a serious threat to Western-style development. They're waging a violent campaign to halt it in its tracks, and the government calls them one of the most serious threats to India's national security.

But back at legal outsourcing firm QuisLex in Hyderabad, and at enterprises like it throughout India, the focus remains on forging ahead. Sirisha Gummaregula argues that, given enough time, India's progress will eventually reach all sectors of society.

SIRISHA GUMMAREGULA: This country has fought three wars. We've always seen conflict. Hyderabad, to a certain extent, because of its Muslim-Hindu breakdown, this always can be a tinderbox.

But does it take away all of the progress that we have made? I don't think, you know, it does. I think in 10 years or so, we will get to the stage of, you know, kind of a European or a U.S. stage of development, and some of those things we can put behind us.

SIMON MARKS: At just after 11 o'clock at night, she leaves the office, another long day under her belt, another contribution made to India's economic development. But it will take many more long days, if not decades, in their offices before Indian executives will head for home knowing they have fully transformed the country's society.

JUDY WOODRUFF: Simon's next report looks at India as an emerging superpower in a tough neighborhood.