Page last updated at 17:10 GMT, Thursday, 25 September 2008 18:10 UK

For India's poor, dreams die first

By Sanjoy Majumder
BBC News, Mumbai

A poor Indian family cooks dinner on the streets of Delhi
Urban poverty is likely to be India's biggest challenge

It is midweek at the China House lounge, the newest hippest night club in the Indian city of Mumbai (Bombay).

But the dimly lit space is packed to the gills with the city's rich set who are out in full force.

Television stars mingle with fashion models and wealthy teenagers as they dance to the music being put out by the resident DJ.

Others lean against the island bar as a bartender spins bottles, mixing exotic cocktails for his appreciative patrons.

Dressed predominantly in black they are certainly not put off by the price - drinks here cost $20 apiece.

India is booming and the rich are getting richer.

A new Indian government report estimates that the middle class grew from 162 million to 253 million between 1993 and 2005.

It has led to a boom in high-end retail stores with some of the world's leading, and most expensive, luxury brands opening shop in India.

The French designer brand Christian Dior is among them with large, gleaming stores in Delhi and Mumbai.

'Into brands'

Bags and watches here can costs thousands of dollars but there are plenty of takers.

"We're into brands, we love travelling, we're young, we love fashion and going out," says one young woman as she casts her eyes over a collection of newly launched leather bags.

"We're the sect of people in India who are exposed to international trends, many of us spend our summers in Europe. It's nice to see brands coming to India - we don't mind spending a lot of money on it."

A shanty town in Mumbai
More than half of Mumbai lives in shanty towns

Words which are music to the ears of Kalyani Chawla, vice president, marketing of Christian Dior in India, who says that Indians are some of the world's best buyers of luxury goods.

"Luxury is a part of our history. The best Cartier jewellery were ordered by our Maharajas or the latest Rolls Royce etc. So it's not a new concept. But there's been a rapid growth in the market and sales are shooting up."

As India's economy booms the landscape of Mumbai is changing.

In the heart of the city, construction workers pound away as they build one of the country's most expensive properties - The Bellissimo luxury apartments for the super rich.

For prices ranging from $2m to $6m, you can buy a 3,500 sq.ft flat with sweeping sea views, Italian marble floors, German fittings and your own private elevator.

But more than half of Mumbai's population live in shantytowns - one-room tenements which are no more than eight feet across and are home to entire families.

'Plenty of work'

Each room doubles up as bedroom, kitchen and bathroom. Such facilities are shared by hundreds at the end of the squalid block - many line up from early in the morning to store water in pots from the solitary tap.

Swapan is a migrant worker from Bengal - most of the workers on the construction projects come here from the eastern, and poorer, part of India.

"We were a group of 25 when we set out. A few of my friends have returned but the rest of us have stayed back. There's plenty of work here," he says.

Dior showroom in Mumbai
There are plenty of takers for expensive brands in India

"We earn about $6 a day which we use to run our household but we also send some money back home to our parents."

Despite India's massive economic growth, the benefits are simply not trickling down to people like Swapan.

Growing inequality is instead leading to greater poverty and spreading to the cities, as more and more people move in from rural areas looking for work.

It is now beginning to worry policy makers who think that urban poverty is likely to be India's biggest challenge.

Arjun Sengupta, who heads a government commission which examines the condition of unregulated workers, is the author of a recent report which revealed that an overwhelming 836 million people live on less than 20 rupees ($0.50) a day.

"We have been growing at a very high rate compared to other countries. But all this growth has been limited to a small fraction of our population.

"Only 23% of our population had a growth in their purchasing power and their consumption power," he says.

'No dreams'

Back at his little tin shack after a long day's work, Swapan and his family settle down for the night.

They are the lucky ones - outside, as the city lights twinkle, tens of thousands lie down on pavements under the open sky. For them this is home.

"We don't have any major dreams. We are poor people," says Swapan.

"Our only aspiration is to earn enough to feed ourselves and survive. That's all."

For all of India's impressive progress the number of Indians living in extreme poverty is roughly equal to the current population of the United States.

Unless India commits itself to greater social spending and intervention, there is growing recognition here that it cannot hope to reduce poverty and those living on the margins of its society will continue to be left behind.

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