India: Slumdogs Shockingly Outnumber Millionaires

In one of Slumdog Millionaire’s most telling scenes, Jamal, the hero, is locked in an outhouse. He escapes by holding his nose and diving into a pit of, well, shit.

Humble beginnings, indeed.

Through a series of often convenient and fantastical coincidences, Jamal manages to land a spot on India’s version of Who Wants To Be a Millionaire? When he wins the grand prize, we marvel at how a kid from Mumbai’s slums has managed to become a tycoon.

In reality, Jamal’s good fortune would beggar belief, if you'll pardon the pun. While India is emerging as an economic powerhouse, the country's people are still far from wealthy.

Rags-to-riches stories do get a fair amount of exposure - particularly given the growing fascination with Western television. But in 2005, 456 million Indians lived below the poverty line, according to The Economist. That's a staggering 42% of its total population. Moreover, 60 million Indian children are malnourished.

But you wouldn’t know that if you paid attention only to the headlines. True, corporate outsourcing, democratization and a thriving entrepreneurial spirit have done wonders for India. Its economy is humming along, growing  around 8% a year. No wonder images of smiling Indians wearing headsets have landed on the cover of Time Magazine.

But the recent worldwide downturn has put the brakes on India’s economy and focused renewed attention on its hardships. Companies like Tata Motors (TTM), Infosys (INFY) and Wipro (WIT) have all succeeded - with the help of foreign investment. As capital dries up, even these well-established companies are scrambling for cash.

And what about all those people who don’t work for the multinational corporations? The Economist points out that “some 65% of Indians live on agriculture, which accounts for less than 18% of GDP.” These workers will surely need to be integrated into India’s growing tech sectors if the economy is to stay on track. The article also notes that “only 20% of job-seekers have had any sort of vocational training.” What good is a beautiful cruise ship if nobody can steer the thing?

India’s real challenge, then, isn't dissimilar from Jamal’s: To continue growing, it needs to find a way to bring its enormous human capital out of the slums and into the workplace.

Slumdog Millionaire -- now the most famous film about India -- was actually made by the British and distributed by Fox (NWS); the irony certainly isn’t lost on anyone. After all, the country has benefited for years on providing outsourced labor to companies ranging from Citigroup (C) to Sony (SNE). The fact is, a lot of people are making a lot of money off India.

But not much of it trickles down to the slums.

Slumdog Millionaire, for all its warm fantasy, doesn’t turn a blind eye to India’s poverty. Beggars and prostitutes, petty criminals and kingpins, are the film’s primary cast. We need to understand India’s real economic situation to truly appreciate how Jamal rises above it.

In the end, however, it’s only Jamal who escapes the impoverished caste. The rest wind up dead or forgotten.