A boy walks to a latrine outside his home in a Mumbai slum.
A boy walks to a latrine outside his home in a Mumbai slum.
A boy walks to a latrine outside his home in a Mumbai slum.
A boy walks to a latrine outside his home in a Mumbai slum.

India's complex mix of wealth and poverty


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MUMBAI, INDIA // The Mumbai slum of Rafiq Nagar has no clean water for its shacks. No garbage pickup along the rocky, pocked earth that serves as a road. No power except from haphazard cables strung illegally.

And not a single toilet or latrine for its 10,000 people.

Yet nearly every destitute family has a mobile phone. Some have three.

When the US president, Barack Obama, visits India on Saturday, he will find a country of startlingly uneven development and perplexing disparities, where more people have cell phones than access to a toilet, according to the United Nations.

It is a country buoyed by a vibrant business world, but hamstrung by a bloated, corrupt government that has failed to deliver the barest of services.

Its estimated growth rate of 8.5 per cent a year is among the highest in the world, but its roads are crumbling.

It offers cheap, world-class medical care to western tourists at private hospitals, yet has some of the worst child mortality and maternal death rates outside sub-Saharan Africa.

And while tens of millions have benefited from India's rise, many more remain mired in extraordinary poverty.

The businessman Mukesh Ambani, the world's fourth-richest person, is just finishing a US$1 billion (Dh3.67bn) skyscraper-house in Mumbai, touted as the most expensive home on earth. Yet farmers still live in shacks of mud and cow dung.

The mobile phone frenzy bridges all worlds. Mobile phones are sold amid the Calvin Klein and Clinique stores under the soaring atriums of India's new malls, and in the crowded markets of its working-class neighbourhoods. Bare shops in the slums sell pre-paid cards for as little as 10 rupees (75 fils) next to packets of chewing tobacco, while street hawkers peddle car chargers at traffic lights.

The spartan Beecham's in New Delhi's Connaught Place, one of the country's seemingly ubiquitous mobile phone dealers, is overrun with lunchtime customers of all classes looking for everything from a 35,000 rupee (Dh2,900) Blackberry Torch to a basic 1,150 rupee (Dh95) Nokia.

There were more than 670 million cell phone connections in India by the end of August, a number that has been growing by close to 20 million a month, according to government figures.

Yet UN figures show that only 366 million Indians have access to a private toilet or latrine, leaving 665 million to defecate in the open.

"At least tap water and sewage disposal - how can we talk about any development without these two fundamental things? How can we talk about development without health and education?" says Anita Patil-Deshmukhl, executive director of Pukar, an organization that conducts research and outreach in the slums of Mumbai.

India's leaders say they are sympathetic. The prime minister, Manmohan Singh, an economist credited with unleashing India's private sector by loosening government regulation, talks about growth that benefits the masses of poor people as well as a burgeoning middle class of about 300 million.

Sonia Gandhi, chief of the ruling Congress Party, has pushed laws guaranteeing a right to food and education, as well as a gargantuan rural jobs program for nearly 100 million people. But as many as 800 million Indians still live on less than $2 a day.

Many fear the situation is unsustainable.

"Everybody understands the threat. Everybody recognizes that there is a gap, that this could be the thing that trips up this country," says Anand Mahindra, vice chairman and managing director of the Mahindra & Mahindra manufacturing company.

Private companies have tried to fill that gap, and Tata sells a 749 rupee water purifier for the poor. Mafias provide water and electricity to slumdwellers at a cost far higher than what wealthy Indians pay for basic services.

In the slums of Mumbai, home to more than half the city's population of 14 million, the yearning for toilets is so great that enterprising residents have built makeshift outhouses on their own.

In Annabhau Sathe Nagar, a raised latrine of corrugated tin empties into a river of sewage that children splash in and adults wade across. The slum has about 50,000 residents and a single toilet building, with 10 pay toilets for men and eight for women - two of which are broken.

With the wait for those toilets up to an hour even at 5am, and the two-rupee fee too expensive for many, most people either use a field or wait to use the toilets at work, says Santosh Thorat, 32, a community organizer. Nearly 60 per cent have developed piles from regularly waiting to defecate, he says.

Conditions are far worse in Rafiq Nagar, a 15-year-old slum on the lip of a 110-acre garbage dump. Since there are no water pipes or wells here, residents are forced to rely on the water mafia for water for cooking, washing clothes, bathing and drinking. The neighbourhood is rife with skin infections, tuberculosis and other ailments.

"If the government would give us water, we would pay that money to the government," said Suresh Pache, 41, a motorized rickshaw driver.

Yet the world of technology has embraced the slumdwellers with its cheap mobile phones and cut-rate calling plans that charge a sliver of a penny a minute. Mr Pache bought his first phone for 1,400 rupees four months ago. Since then, his wife, a ragpicker, found two other broken models as she scoured the garbage dump, and he paid to have them repaired.

He speaks with fluency about the different phone plans that cost him a total of 300 rupees a month. Now, when his rickshaw breaks down, he can alert his wife with a call. She uses her phone to tell the recyclers where she is in the dump so they can drive out to her, saving her the time and effort of dragging her bag of scraps to them.

In fact, the spread of cell phones may end up bringing toilets.

R. Gopalakrishnan, executive director of Tata Sons, one of India's most revered companies, says the rising aspirations of the poor, buttressed by their growing access to communications and information, will put tremendous pressure on the government to start delivering.

"I think there are very, very dramatic changes happening," he says.

* Associated Press

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Ten tax points to be aware of in 2026

1. Domestic VAT refund amendments: request your refund within five years

If a business does not apply for the refund on time, they lose their credit.

2. E-invoicing in the UAE

Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption. 

3. More tax audits

Tax authorities are increasingly using data already available across multiple filings to identify audit risks. 

4. More beneficial VAT and excise tax penalty regime

Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.

5. Greater emphasis on statutory audit

There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.

6. Further transfer pricing enforcement

Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes. 

7. Limited time periods for audits

Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion. 

8. Pillar 2 implementation 

Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.

9. Reduced compliance obligations for imported goods and services

Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations. 

10. Substance and CbC reporting focus

Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity. 

Contributed by Thomas Vanhee and Hend Rashwan, Aurifer