The dark side of India's success.

• Author: Pal, Amitabh
• Position: 'Behind the Beautiful Forevers' & 'The Beautiful and the Damned: A Portrait of the New India' - Book review

Behind the Beautiful Forevers:

Life, Death, and Hope in a Mumbai Undercity

By Katherine Boo

Random House. 256 pages. $27.

The Beautiful and the Damned: A

Portrait of the New India

By Siddhartha Deb

Faber and Faber. 253 pages. $26.

India is a different country than it was twenty-five years ago. Until 1991, India had a closed economy. There was tight regulation of multinationals and the indigenous private sector and an extensive public sector. Income taxes were steep on the extremely affluent, with the top marginal rate reaching 97.5 percent. Tariffs on imported goods were among the highest in the world. Travel abroad effectively was curtailed due to severe restrictions on foreign exchange.

How things have changed.

The economic transformation that India has experienced in the past two decades makes the country an important test case for the impact of globalization.

With its seemingly impressive growth rates, India is touted as a success story. Multinationals are wing with each other to invest in the country. Conspicuous consumption, once kept in check for fear of income-tax raids, has become a status symbol. India has fifty-five billionaires, the fourth-largest such group in the world. The richest man in India, Mukesh Ambani, has built himself a twenty-seven-floor house in Mumbai, reportedly complete with three helipads and parking space for 168 cars. Income tax rates have been reduced dramatically, with the top marginal rate now 30 percent. India's foreign exchange coffers are flush. Swanky malls have opened up in towns all over the country. And India is asserting a strong military, with a defense modernization drive over the next decade that may reach $200 billion.

At the same time, the problems of a market economy have hit India hard. Income inequality has reached unprecedented levels. And corruption in post-liberalization India is eye-popping. In a single scam involving the deliberate undervaluing of cell phone licenses, India's corporate honchos, in collusion with bureaucrats and politicians, cheated the government of billions of dollars. Responding to a public uproar, India's Supreme Court has revoked the contracts.

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Then there are the legions of Indians left behind.

"Half of India's children under the age of three are malnourished, which is worse than in sub-Saharan Africa," wrote Communist member of parliament Sitaram Yechury in a November op-ed in the Economic Times. "Sixty years after independence, our sanitation is woeful; almost 50 percent of households do not have toilets."

While health care access for India's poor has never been good,

Amitabh Pal, the managing editor of The Progressive, is the author of the recent book "'Islam' Means Peace: Understanding the Muslim Principle of Nonviolence Today" (Praeger). neoliberalism has made this worse by the introduction of user fees, reduced funding for the state health sector, and drug price decontrol. As a result, India trails behind even neighboring Bangladesh in key indicators...