Friday, September 2, 2011

[ZESTCaste] Indian Untouchables Become Millionaires

Swaminathan S. Anklesaria Aiyar
Research fellow, Cato Institute's Center for Global Liberty and Prosperity

Indian Untouchables Become Millionaires
Posted: 9/1/11 02:45 PM ET

It is now the 20th anniversary of economic reforms that converted
India into a miracle economy, growing at 8 percent per year in the
last decade. Critics complain that this has benefited only a few
upper-crust millionaires, bypassing poorer groups. This is simply
wrong. The poorest, lowest of all Hindu castes -- once called
untouchables and now called dalits (meaning the oppressed) -- have
started spawning millionaires too.

The Federation of Indian Chambers of Commerce and Industry (FICCI) is
India's oldest business chamber. Dalits have now set up a Dalit India
Chamber of Commerce and Industry (DICCI). This is no more than a
start: dalits continue to remain at the bottom of the social and
income ladders. But at long last some have ceased to be objects of
pity and become objects of envy.

Many dalit entrepreneurs came from the lower middle class, got a
decent education, and then made good. But others came from laborer
families, and their rise is especially heartening.

Ratibhai Makwana's father, once a farm labourer, later made leather
pickers, used in textile machinery. Dalits have traditionally had the
dirty task of disposing of dead animals, and in the process have
become leather workers. Ratibhai greatly expanded his father's small
business by getting into plastic intermediates. His family now runs a
sugar mill in Uganda and plans a cement plant there too. His revenues
exceed $80 million a year.

Sanjay Khsirsagar came from a lower middle class dalit family. His
first venture was in high-end sound equipment. Later he created a
construction company, APA Infraventure, which has become big in Mumbai
slum redevelopment. He is now building himself a penthouse by
redeveloping the very slum he grew up in.

Bhagwan Gawai once worked alongside his father as a construction
worker. But he got a decent education and joined a government oil
company, HPCL. He was not well treated there, and successfully sued
the company for caste discrimination. His lucky break came when he was
posted in Dubai by HPCL. There he developed new contacts, and started
a plastics trading business with Arab partners. This business now has
a turnover of $20 million.

Ashok Khade's father was a cobbler, working under a tree in Mumbai.
Ashok went to college, and then joined a government company building
offshore platforms, Mazagon Docks. He acquired skills in offshore
maintenance and construction. Today his company DAS Offshore is a
major offshore services company, and he now plans a jetty fabrication
yard that will employ 2,500 workers.

Sushil Patil, another son of a laborer, was lucky enough to go to
college (which waived his last year's fees). Bitten by the
entrepreneurial bug, he started several ventures, all which failed.
Yet he persevered, and ultimately struck gold by setting up a
construction company, IEPC. This now has revenues of $ 65 million.

Another dalit, Balu, made good after much travail with a soldering
equipment business. He says 32 girls in a row rejected him as a
marriage partner because of his poor prospects! He claims many dalit
businessmen still hide their caste name to avoid discrimination.

In all these cases, education helped dalits rise. But rural government
schools are pathetically substandard, leaving most dalits barely
literate. Even so, they have made astonishing strides, according to a
seminal study by University of Pennsylvania Prof. Devesh Kapur and

This study looked at dalit outcomes over the last 20 years in
sub-districts of west and east Uttar Pradesh, India's largest state.
The proportion of dalits owning their own business was up from 6% to
36.7% in the west, and from 4.2% to 11% in the east. The proportion in
non-traditional occupations (like tailors, masons etc) was up from 14%
to 37% in the east, and from 9.3% to 42% in the west.

Political parties have long promoted government job reservations for
dalits as the way to social progress. Yet, the study shows the
proportion of dalits in government jobs in Uttar Pradesh has actually
fallen from 7.2% to 6.8% in the east, and risen marginally from 5% to
7.3% in the west. Clearly, job reservation has not driven the state's
social and economic revolution. The main drivers have been the new
opportunities arising from economic reforms, plus the rise of dalit
politician Mayawati. She has been Chief Minister of the state four
times in the last two decades, and done much to raise their status and
reduce historical discrimination against them.

Critics complain that India's economic reforms have created new
inequalities. They may even criticize the rise of dalit millionaires
as a new sort of inequality. Nonsense. Viva la such inequality!

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