SAP Bangalore

SAP in India, August 30, 2007

Edited by Andy Ross

SAP has announced several initiatives to expand the company's India involvement on the engineering and product development front.

The latest is the inauguration of a new facility on the company's SAP Labs campus in Bangalore. The new facility can seat over 2,000 employees. SAP has also announced a SAP Scholar Program, an industry-academia initiative to encourage engineering talent to opt for advanced degrees combined with professional training.

CEO Henning Kagermann said, "This new facility is both a sign of SAP's acknowledgement of the breadth and quality of work being delivered by our colleagues in India, and our commitment to deepen our engagement with Indian engineering talent even further. SAP Labs India is today a critical link in our global strategies and we expect it to continue to play a definitive role in our future strategy as well."

SAP has also reaffirmed a $1-billion investment in India. According to Kagermann, "SAP Labs India is today the largest research and development hub and support presence for us outside Germany."

India's Middle Class Failure

By Chakravarthi Ram-Prasad
Prospect, September 2007

Edited by Andy Ross

As Mother India celebrates the 60th anniversary of her independence, there is both surging optimism and crushing despair about her future. The seven Indian Institutes of Technology rank near the top of global surveys, and job offers to graduates from the Indian Institutes of Management rival those to graduates of the famous U.S. business schools; yet a third of the country is still illiterate. Three hundred million Indians live on less than $1 a day. At the other end of the scale, India has the largest number of dollar billionaires outside the United States and Russia.

For a country that was born of partition, has had a history of separatism, and that encompasses such linguistic, ethnic, social, religious and geographic variety, it is strange that even critics talk of India as if its legal unity was sufficient guarantor of its actual unity. Only the British empire and then the resolve of the leaders of the independence struggle ensured that the ancient yet amorphous idea became a single nation state.

Among the middle class, there is still a commitment to India. The middle classes assume it is India's due to be treated as the equal of the United States and the rest. But middle classes distrust those who have not risen with them. In more homogeneous societies, the better off are more likely to care for the worse off. Highly diverse societies, like India, find it more difficult to institutionalise such fellow feeling.

The key to the diversity of Indian society is intermarriage among consanguineous groups with hereditary occupations. Over the centuries, there have been many efforts to extend a sense of common humanity across castes. The caste system has also allowed for unparalleled pluralism of belief and practice. But the idea that people are intrinsically pure or impure has blighted the idea of citizenship on the subcontinent.

The social distance of caste is echoed in the existence of a large Muslim minority which makes India the largest Muslim country in the world after Indonesia. While some hostile Hindus still question the Indianness of Muslims, the middle class contains about the same percentage of Muslims as does the population as a whole. But despite constitutional guarantees of special rights for Muslims, there is a perennial worry over Muslim economic progress.

Prosperous India has not yet provided sufficient social infrastructure to make the country less brutal for those at the bottom. The state apparatus for tax collection was for a long time a shambles, and evasion the norm. Another reason for the poor fiscal performance of the state is the Indian people's ingrained preference for private rather than public provision.

According to the Indian National Council of Applied Economic Research, the term "middle class" applies to those earning between $4,000 and $21,000 a year ($20,000-$120,000 in purchasing power parity terms). But this definition suits only about 60m (under 6 per cent) of the population. Consumerism is what distinguishes the Indian middle class most sharply from the past.

One problem with making sense of the Indian middle class has been the disentangling of caste from its occupational base and its reconstitution as a form of political identity. The traditionally privileged castes are called the "forward" classes. However, it is in the interests of various communities to emphasise their "backwardness," in order to take advantage of higher education places and public sector jobs reserved for lower-caste groups. The result is that there are constant challenges to the system of classification.

India has boomed economically partly as a result of the huge investment in higher education — to the detriment of primary education — made by successive Indian governments, dating back to Nehru.

Unlike in many postcolonial countries, power in India was concentrated in the old middle class — educated, professional, upper and intermediate castes from across the religions. Jawaharlal Nehru, India's first prime minister, represented this class. His studies at Harrow and Cambridge were paid for by his lawyer father.

Indian democracy is nearly half a century older than the birth of an economically vibrant middle class. So political rights were taken for granted and are now neglected by those who see their prosperity as a result of their own efforts.

In contrast to China, the democratic Indian state cannot impose a country-wide population control strategy. But now it is clear that China will grow old long before it grows rich, while India's young population will enjoy much more sustained growth well into the century.

In the middle of celebrations to mark the 60th year of India's independence, there is much to despair about. The middle class is the cause of both the celebration and the despair.