Many Western companies have outsourced work to Indian companies, where even skilled workers earned less than their counterparts in the West.

Obstacles to Progress

Despite many successes, India faces major economic hurdles. Among them are population and poverty, unemployment, the rural-urban divide, and the need for agricultural development. India, like China, experienced rapid population growth, which hurt efforts to improve standards of living. As food output rose, so did demand. More than one-third of Indians live in poverty, unable to meet basic needs for food, clothing, and shelter. Although India's economy was expanding, it could not provide enough jobs for everyone, leading to high unemployment.

As India modernized, tens of millions of people left villages to live in cities, and the gap between rural and urban dwellers grew. Still, an estimated 70 percent of Indians still live in villages. Rural poverty remains high, despite government programs to provide education and jobs. Farming communities still lack roads, electricity and other basic services. Many farm workers still use traditional farming methods and owe much of their output to absentee landowners.

As India's economy grows, so does demand for cars. India is now the world's sixth-largest carmaker. Traffic in the narrow streets of crowded cities is a growing problem, as is air pollution.

The government has worked to introduce modern farming methods and technology. It has also tried to make Indian farmers less dependent on the seasonal monsoon rainfall. Building modern irrigation systems and repairing old ones is a costly, but ongoing, process.

Impact of Rapid Population Growth

With 1.2 billion people, India has the world's second largest population after China. The Indian government supported family planning but did not adopt the harsh policies used in China.

Although India's growth rate has slowed somewhat, it is estimated that India will have the world's larger population by 2030. While middle class families have fewer children than in the past, poor families, especially in rural areas, still see children as an economic resource to work the land and care for parents in old age.

In overcrowded cities like Kolkata (or Calcutta) and Mumbai (or Bombay), millions lived in poverty without jobs, adequate food, or health care. The government, aid groups, and others tried to help the urban poor. In Kolkata, Mother Teresa, a Roman Catholic nun, founded the Missionaries of Charity. This group provided food and medical care to thousands. They treated lepers, AIDS sufferers, and many others. Still, millions more remained in desperate need in both urban and rural areas.

Social Reform in India

Unlike China, which has suppressed social protests, India is a democratic country where activists have pressed social reform. They have addressed many causes, such as protecting women's rights, ending caste discrimination or child labor, and promoting education.

Dalits

Education, economic growth, and urbanization continue to undermine Indian's traditional caste system. In India's competitive economy, new classes are emerging based on individual success and wealth. Some older castes are losing their privileged positions while successful entrepreneurs from any caste have gained status. Cities allow for greater social mobility, or the ability of individuals or groups to move up in society.

India's constitution banned discrimination against dalits, or people of the lowest caste. To improve conditions, the government set aside jobs and places in universities for members of these groups. Overall, conditions for dalits have improved in the past 20 years.

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