Millionaires... From Our Slums

Some months ago, I attended a grand convention of India’s liberals during which one of the speakers, an eminent editor and journalist of yesteryears, pronounced from the podium, with complete aplomb, that “consumerism cannot be good for India because the poor do not consume.”

Here is a news story on Dharavi, Mumbai, the world’s biggest slum, which says that the annual turnover of all the small businesses that serve the slum-dwellers exceeds 3000 crores, or 30 billion, rupees.

The report also tells the tale of a real “slumdog millionaire” – a Dharavi resident who started off selling vegetables house to house and is now the proud owner of many businesses, from a phone booth to, you guessed it, a beer shop. I simply love such stories. They truly inspire.

And I have seen this in Delhi too. If you visit the slums and look around, you will see innumerable businesses operating successfully. There are barbers who conduct operations in the open air. There are many tea shops and vendors of bidis and the like. There are small provision stores. I even found a doctor’s chamber. The sign outside advertised the fact that the doctor was a Bengali!

Where there are so many people, there are bound to be entrepreneurs who cater to their needs. These days, slums are serviced by cable TV operators, and the provision stores sell mobile phone recharge coupons.

The poor consume, and their consumption is increasing. There is a lot of “gold at the bottom of the pyramid.”

The rags-to-riches story of the vegetable vendor of Dharavi has many parallels in Delhi. There used to be a chap in Defence Colony market who sold roasted peanuts off a cart. He now sells that and other salted snacks from a little shop he bought in the very same market. There is, of course, the well known story of the chaat-wallah on Shah Jahan Road, who is a millionaire many times over.

It is indeed amazing that a journalist should be blind to the market economy in which the poor operate. The reason could well be that when we speak of Capitalism and Free Markets, we are all focusing on Davos, on the WTO, and on the Birlas, Tatas and Ambanis. These hog the limelight. And it is deemed that Capitalism is only for them, and not the poor. For the poor, it is said, and believed, we must have State Socialism. The State must “help the poor.” There must be “redistribution.” There must be a “safety net.”

Nothing could be further from the truth.

What the poor need is Free International trade – so their consumption rises. They need Property Titles – so they discover the solution to the “mystery of capital.” They need Sound Money – so inflation does not tax them. And they need our The State off their backs – so the health inspector does not go around collecting bribes from every tea shop.

If we proceed in this direction, there will be many, many millionaires who will emerge from our slums.