Fewer than 40 million of its 470 million workforce are employed in the "organized sector", which offers job protection and other benefits. The government and the public sector are the biggest employers, employing 25 million people. The big Indian companies we hear about such as Infosys and Reliance Industries employ far fewer people. Less than 1 per cent works in the IT industry and yet India has become a software giant.
Edward Luce aptly calls his book In Spite Of The Gods: The Strange Rise Of Modern India. India is a deeply religious, largely superstitious country, he says, where most people continue to live in the villages because there are not enough jobs in the cities. Unlike America or Britain, India has not industrialized on a large scale before setting up high-tech industries.
Luce knows India inside out. He was the Financial Times' South Asia bureau chief based in New Delhi from 2001 to 2006 before becoming the newspaper's Washington bureau chief. And his wife is an Indian.
Luce traces India's lopsided growth to the policies set by India's first prime minister, Jawaharlal Nehru. He promoted capital-intensive industries and poured as much money into higher education as in primary education. The result: India produces about a million engineering graduates a year but only 65 percent of the population is literate.
India has to change into a more urban, industrial economy, says Prime Minister Manmohan Singh, and Luce agrees with him. Yes, they have met, not once but several times.
This is a tight, well-written book which describes the country, its people and politics with interesting details and anecdotes.
Luce recalls an interview with Sonia Gandhi in 2004:
"You know politics does not come easily to me," she said. "I do not enjoy it. I do not even think I am very good at it. Politics killed my mother-in-law and it killed my husband. But when I saw what they were doing to India's secular culture, I felt I could no longer stand by and watch it happen without doing something," she said (referring to the Hindu-Muslim riots in Gujarat in 2002). "Secularism is the most important legacy of my family. I had to stand up and defend it. I could not watch them tear it." Sonia's eyes were brimming with tears. She was not sobbing. But there was an intense sadness in her face.