No One Saves for a Rainy Day Now

When you think of India, what images come to mind? Be careful. They may already be out of date. The world is changing rapidly, as the following article makes clear.

Until recently many middle-class Indian families displayed their refrigerator in the living room to show it off. It would be covered by plastic to protect it from dust and scratches. Now fridges are taken for granted and kept in the kitchen. Over the last couple of decades a richer Indian middle-class has grown up that can afford a lifestyle similar to people in the West. How has this happened?

India’s success is a result of having one of the largest and best-educated English-speaking populations in the world. This gives the country an important competitive edge compared to – for example – China, where relatively few are able to use English for work purposes. Another reason is that Indian labour is cheap. Foreign companies that move their white-collar work to India are able to save about 40 per cent of their costs. This is called “outsourcing”. Thanks to digital communication technology, work may now be co-ordinated across the world.

As a result, new industries have developed in India. For example, new software companies have been able to sell programs to many major companies in Europe and the USA. Another successful industry is the call centre industry. Indians who work in call centres offer telephone support and service in English to customers in foreign countries. Even though the salaries these companies offer their workers may seem small compared to what people are paid in Western countries, they are very good for India.

This new wealth has changed India dramatically. Hyderabad is a good example of this. It used to be a charming but very old-fashioned city. Today it competes with Bangalore to be the high-tech capital of the region. There are busy roads, huge billboards and shopping malls crowded with shoppers. Korean and Japanese car makers are selling more and more cars. In the past you could hear bicycle bells jingling. Today the jingling comes from mobile phones everywhere.

The Cyber Gateway office complex in Hi Tech City, Hyderabad. The area is home to many information technology companies. The Cyber Gateway office complex in Hi Tech City, Hyderabad. The area is home to many information technology companies.

There is a debate, however, about whether this economic growth in cities really helps the extremely poor people in India. Much of India still looks like a Third World country. Many cannot read or write. Clean water, good roads and electricity are scarce in rural areas. Even in the capital New Delhi, power cuts are practically an everyday occurrence. Even worse, there is a high rate of unemployment.

Still, the image of India in the eyes of the world has changed. Now the country is known for its brainpower – for millions of talented engineering, business and medical graduates. The enormous population of about one billion is seen as a resource rather than a burden. There is also a new attitude to poverty among Indians. Members of the new, successful generation feel that there is real hope of ending poverty through economic growth.

And they enjoy that growth in Hyderabad. Amit Kumar is twenty-six and changes his mobile phone every few months. He wears Nike, eats at McDonald’s and shops in malls full of Benetton and Lacoste. He meets his friends, Viond and Shalini, for drinks at a pub called 10 Downing Street. They are interior designers. Their house has a microwave, washing machine, flatscreen TV and stereo system. They buy their groceries at a supermarket and eat out regularly. Their children go bowling or go-karting at week-ends. “When we go abroad, we no longer come home with bulging suitcases full of the stuff that friends and relatives used to beg us for – Revlon lipsticks, Black Label whisky and Chanel perfume– because everything is now available here,” says Shalini.

Ram Ready owns an advertising agency in Hyderabad. “My friends and I earn in a month what our fathers earned after 30 years’ work. I can spend a lot thanks to my income doubling in the past three or four years” says Ram. Among her friends, no one saves much. “I’ll tell you why my friends are not saving for a rainy day, it’s because they don’t see a rainy day coming. If they lose a job, they’ll get another one. They’re optimistic about the future so there isn’t the same fear there used to be.”

With luck, many more will lose their fear in the years to come.




Answer the following questions.

  1. How does the position of fridges in Indian homes reflect the standard of living in the country?
  2. Why is the Indian economy doing so well?
  3. What is outsourcing?
  4. What are the two major industries to have developed in India over the past decade?
  5. Is India still a developing country? Give reasons for your view.
  6. How has the economic boom changed the image of India in the world community?
  7. What does Ram Reddy mean when she says that her friends are not saving for a rainy day. What reason does she give?



  1. The Indians portrayed in the article have adopted a lifestyle that resembles that of many Europeans and Americans. Is this a good or a bad thing? Give reasons to support your views.
  2. The younger generation described here do not seem to worry about the future. Is that the way you feel about the future? Do you think you will have a better standard of living? About the same? Lower? Take a quick poll of the class and then discuss what reasons people have for their views.