India at Crossroads on Path to Superpower Status

The Upper Crust Until Indian independence in 1947, Hyderabad was a princely state for more than 220 years, ruled by some of the richest men in the world. The diamonds owned by the Muslim monarchs, the Nizams, were legendary. The most famous, the 184.5-carat Jacob Diamond, was used as a paperweight by the last Nizam for many years. The legacy of the Nizams includes structures that have been named UNESCO World Cultural Heritage sites, including the massive fortress of Golkonda and the tombs of the ruling dynasty.

But when a local resident is asked for directions to the center of the city, he will not lead a visitor through the maze of twisted streets that extend outward like spider webs from the Charminar monument in the historic part of the city, but to Hyderabad's new section, with its shopping malls, universities and the headquarters of IT, biotech and genetic-engineering firms. Hyderabad, a city of 7 million people, has acquired the nickname "Cyberabad," and it is second only to Bangalore, India's high-tech capital.

In polls, the Indian School of Business (ISB) in Hyderabad is routinely named as India's top business school, while the Financial Times ranks it among the top 20 in the world. It's the new jewel of Hyderabad.

The campus, with its airy, pink buildings surrounded by carefully tended, park-like grounds, feels like an island. "This cheerful serenity is deliberate. We like to see ourselves as a temple of learning," says Dean Ajit Rangneker, who worked in Hong Kong for more than a decade before coming to Hyderabad. "But don't be deceived. Our students work extremely hard, and 16-hour days are perfectly normal for them."

Entrance examinations and costs ensure that only India's elites can attend the ISB, where tuition runs to $40,000 a year. Besides, only those applicants who already have a college degree and business experience even stand a chance of being accepted. The roughly 600 students at the ISB are a temporary community of purpose, united by their determination to succeed and bound together in an elite institution.

The school was established in 1996 by Indian business experts at McKinsey, the international consulting firm, "in cooperation with the Indian state." But the students view the government in New Delhi with nothing but contempt and cynicism. In the eyes of these young people, corruption and nepotism are "endemic," while political parties and their representatives are nothing more than obstacles to doing business. "If something works in India, it isn't because of politics but despite politics," says ISB graduate Kumar. Nevertheless, dispensing with voting altogether is not an option for him. Like everyone we interviewed, he votes regularly.

"We have advantages because of our pool of well-educated, innovative experts, and also because of our demographics. Our society isn't aging as quickly as societies in China and the West," says Sunil, a student. The new industries, with their data highways, rely less heavily on classic infrastructure, he adds, so that the disastrous state of Indian roads becomes less of a limiting factor than one might suspect.

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