Gucci dreams in a poor land

NEW DELHI, India (AP) -- Its sleek contours are ringed by etched filigree. Its design was inspired by the architecture of ancient Greece. Handmade in Italy, it is available in only a handful of high-end boutiques and costs more than many Indians earn in a year.

It's a ball point pen.

Or it is unless you happen to be the guy selling it.

"What we are using here is not a pen. It is a jewel ... a masterpiece," said Juzar Zaveri, the sales manager overseeing the Indian launch of OMAS pens. Then he paused, struggling to find the right level of hyperbole: "It is a jewel of a masterpiece!"

In a country long known for its poverty, a tiny pocket of immense wealth is growing, lifted by a booming economy and lusting for brand-name luxury goods. For this subclass, consumption is nothing if it's not conspicuous.

So the sellers are coming, many in just the past few months: Louis Vuitton, Dior, Chanel and Bulgari have all opened boutiques. You can now buy a Rolls-Royce Phantom for about $790,000 or a Porsche 911 Cabriolet for $170,000.

There are magazines telling the rich how to spend their money (colon cleansing at an elite Bombay clinic, one glossy recently suggested) and news conferences to unveil new designer wear ("The color nude is all you need to know this season," Dior representative Kalyani Chawla told reporters). There's even help for the staff, with Rolls-Royce reportedly flying a representative to India to help train chauffeurs.

More than 40 percent of India, a country of more than a billion people, live on less than $1 a day, many without electricity or running water. But this country also has an economy growing at nearly 8 percent, fed by its importance as an international center for outsourcing and high technology. As import restrictions have loosened in the past couple of years, the trickle of foreign luxury goods has become a torrent -- aimed directly at the appetites of the new spending class.

"Now it's not Mahatma Gandhi who is important, it's Coco Chanel," said Suhel Seth, one of India's best-known marketing executives.

"Today we have multiplexes, we have malls, we have restaurants," said Seth, who navigates the country's clogged streets in a Porsche Boxster. "In all these places you want to be seen wearing the right badge ... and that badge is the Dior, the Chanel, the Louis Vuitton."

Times, very clearly, have changed.

When India achieved independence from Britain in 1947, everyone was expected to pay public fealty to the example of Mohandas Gandhi, the "Mahatma" or "Great Soul," who made his own clothes, ate only sparingly and always traveled third-class. For a time, homespun cloth was a gesture of ostentatious denial in wealthy Indian circles. Even India's royalty -- the network of maharajas and nawabs who became famous for their profligacy during colonial rule -- had to tone things down.

Tikka Shatrujit Singh remembers those days with a shudder.

"We had to hide our Rolls-Royces and drive around in half-moth-eaten vehicles," said Singh, a society fixture whose father was the maharaja of Kapurthala, a former north Indian princely state. His grandmother, he said, was particularly enamored of Gandhi's example, and made sure the rest of the family complied. "You sort of were ashamed of being wealthy," said Singh, who is now an adviser to Louis Vuitton.

In those days, class was most often determined by education or job status, and star university graduates became government officials, writers and professors.

With the new money, though, comes a redefinition of class.

Those jobs still have prestige, but it's the investment bankers, real estate developers and software magnates who can navigate the world of $450 OMAS pens and $1,000 Dior purses.

And the truly rich remain a very small crowd -- about one-thirtieth of one percent of the population, according to India's National Council of Applied Economic Research. That's about 50,000 households with annual incomes above $225,000.

While still a minuscule percentage, however, it's more than twice as many as five years ago, and the number is expected to double again by 2010.

The nouveaux riches are a reflection of an economy that has changed dramatically since socialism was abandoned for economic liberalization in the early 1990s.

Some made fortunes in real estate, others in the stock market. Some have moved home after years spent working in the United States or Britain. Top business school graduates now receive pay packages that rival salaries in New York or London.

But to some Indians, these people reflect a skewed vision of a country struggling with profound social problems, where the rise of the rich has simply widened the already vast gap between the wealthy and the poor.

"A hyper-inequality is being imposed on already high levels of inequality," said P. Sainath, a journalist who has spent much of his career writing about rural poverty.

High-tech cities like Bangalore, filled with free-spending young people and crowded bars, have become the new cliche of India, but much of the country remains cut off from modernity.

According to government statistics, barely half of rural Indian homes have electric lights and only four percent have refrigerators. Hundreds of debt-burdened farmers have committed suicide in south India over the past four years, crippling water shortages are increasingly widespread and the schooling system barely functions in some states. In the years from 1994-2004 -- the time when the economic reforms were taking hold -- rural unemployment nearly doubled.

"There are these huge brand names at one end of the spectrum, and at the other end there is serious deprivation -- whether it's in health or sanitation or education," said Sainath.

For the spenders, though, that's beside the point.

"It's a question of choice," said Singh, the royal man-about-town. "Why should Indians be denied access to the best?"