by Bob Van Leer

  (NEW DELHI, INDIA, May 8, 1995) - We spent the day in meetings with Indian government and industry representatives and three messages are emerging: India's largest trading partner is the United States, India has a middle class of 200 million people, and India is open for foreign investments.

  The four of us, delegates from the National Newspaper Association, myself, Jim Kelly from Hood River, OR; Ken Rhoades, Blair, Nebraska; and Sam Kennedy, Columbia, Tennessee; started the day with walks around our hotel to get a feel of the city. It is a study in contrasts from the opulent Taj Mahal Hotel we are staying in to perhaps the worst slum we have ever seen just a few blocks away. And a few blocks away the other direction was a shopping area in between. But, so far, we have not seen as much poverty as we would have expected.

   After the collapse of the Soviet Union, India was in the position of having lost its major partner. India had a socialist government and it was no longer working. The country was in serious economic trouble. The country's foreign exchange was down to a two-day supply. It was like having just enough money to pay your bills for two more days.

  The country restructured in 1991, opening up India to foreign investment, allowing foreign interests to have majority (51%) ownership in companies in many areas outright, and more with negotiation. Tariffs were cut, banking opened to foreigners, repatriation of profits allowed and taxes reduced.

  This has led to a flood of new investment, primarily from the U.S.

  According to a government spokesman, this has led to a wider choice of goods but, for the average worker, suddenly his job is at risk. The workers grew up under socialism and know no other way yet.

  He said economic reform in a country as large as India takes time to spread through the country. Large layoffs can't be tolerated because there is no "safety net" for the workers to fall back on. Results of the economic reform have not yet reached below the middle class.

  The reforms have increased the middle class standard of living by a notch. Those who walked moved up to bicycles. The bicyclists moved up to motor scooters and the motor scooter owners started looking at small cars. One result is smog, 70% caused by motor vehicles (and 84% of that by older vehicles), and it is getting worse.

  Pay is low by U.S. standards, but moving up. Poverty is not worsening, but the gap between that level and upper incomes is widening.

CII LUNCH

  We were hosted to a lunch by the Confederation of Indian Industries (CII), the country's business lobbying group. CII is moving itself out of the traditional business group functions, adding new areas of turning industries "green" and taking on functions of social responsibility and corporate citizenship.

  Mrs. M. Roy, senior economic director, said 1991 was a historic shift in India's direction. When I asked about recent election losses by the government to a party that has questioned multi-national company investment in India, she said there would be "no reversal".

  N. Srivivasan, senior director, said reforms are too imbedded to be changed. He said projects especially being invited are infrastructure, especially electric power. Tele-communications and toll roads are also being invited. Toll road builders will be given 30 years to recoup their investments and make a profit, after which the roads revert to the government.

  Roy said there is a massive housing shortage in India. Attempts, both public and private, are being made to solve it. Government workers receive government housing or rent subsidies and many private employers also give a housing allowance.

  The government provides some supplementary employment, but 10 million persons are added to the work force every year and the government can't supply that many jobs.

  Credit cards have not yet caught on in India. In this nation of 900 million people, there are only 400,000 credit cards. Retail commerce is still largely in cash.

  Srinivasan said since 1991, inflation has been cut from 18% to 9%, the amount of exchange is up, exports are up, and a new group of entrepreneurs are changing the country. He said the "brain drain" of educated Indians has stopped and some are even returning.

  After lunch, we were given a concoction of something sweet and betel nuts wrapped in a green betel leaf. The whole mixture is chewed. I don't think it will ever catch on in the U.S.

LARGEST FILM INDUSTRY

  After lunch we met with Bhaskar Ghose, secretary, Ministry of Information and Broadcasting. He said Indian film making started in the silent movie days and built up to become the largest film industry in the world and it remains so today. It produces mainly formula films that include a certain number of songs and dances and chases. He said the songs, released separately, are more profitable than the film itself.

  Television was a government monopoly before satellites but now most telecasting is from private operations, although the government still broadcasts on several channels.

  Newspapers are a growing industry in India and a total of 33,612 are registered, several times as many as in the U.S.

THINK OF INDIA

  I asked Ghose if he had any message to give our readers and he said he would just like to see the U.S. heartland think of India at all.

  Our last meeting of the day was Rashunandan Lal Bhatia, Minister of State for External Affairs. He said India is a civilization with 5000 years of history. He said India has been invaded repeatedly but never attacked any other state. He said India produced four religions, Hindu, Sikh, Buddhaism and Jain and accepted Christianity and Islam from abroad. But the state has no religion, all are accepted.

  Bhatia's tone hardened when speaking of Kashmir, a province in the northwest whose king elected to go with India in the partition of India when the British pulled out in 1947, even though most of the population is Muslim and the province might have more logically fit in with Muslim Pakistan.

  India and Pakistan have fought three wars over Kashmir, but none since 1972. Bhatia said of the Pakistanis, "We offer dialog, but they put on conditions". He said India is going to hold an election in Kashmir and expects this to end the dispute.

He acknowledged India had one atomic blast test in 1974 but said India is not making nuclear weapons. He said Pakistan also has the capability to make nuclear weapons.

  Bhatia said terrorism is a new problem and India and the U.S. should fight this menace. He said the U.S. armed and trained fighters for the Afghanistan war and these soldiers are armed and trained and available at other places which is causing trouble for the U.S. and others.

EVENING DINNER

  Raghav Bal Mardhekar, joint secretary of the Ministry of External Affairs, hosted a dinner of about 30 in our honor at our hotel in the evening. The guest list included government officials and foreign and Indian journalists.

  Present were a number of the officials we had seen that day and others including a major general.

  The journalists included the correspondents of the New York Times and Time Magazine as well as Indian journalists. One of the Indian journalists was introduced as the leading political columnist in India. Another published the Indian version of Time with a circulation of a half million. It seemed an overkill for us small town publishers.

  Tomorrow we are to start the day with a meeting with the foreign secretary followed by a visit to the Indian parliament.