The Times of India, the country's biggest-selling English-language newspaper, has adopted a new slogan: "India poised, our time is now".

Despite the hyperbole, what strikes most people when they arrive is the seemingly organised chaos. Cattle roam the capital's poshest avenues and ragged children beg alongside foreign-made cars and glitzy malls.

India's traditional image is overshadowed by strikingly new ones. Today the country is known for call centres and software companies, blotting out older notions of interminable penury or romantic visions of maharajahs.

While jobs are sucked out of Britain and the US to India, the country has gone from begging bowl economy to global giant. But the success of India's hi-tech sector is still to make an impact on the lives of the 360 million people who live on less than £0.50 (Bt35) a day.

There is little doubt the Indian economy is booming. Growth has averaged 8 per cent since 2003, second only to China. According to investment bank Goldman Sachs, the country's young population means India has the potential to grow faster than China in the long term.

There are few better places to illustrate the changing face of India than Gurgaon, a suburb of Delhi. Ten years ago Gurgaon was a collection of muddy villages with a population of 30,000. Today it is home to more than 600,000 people, many of whom work in multinationals such as Ericsson, Pepsi, GE, Honda and Nestle, who have headquarters in the suburb.

A thicket of high-rises and cranes towers over 120 hectares of sculpted gardens and Mediterranean-style villas in Gurgaon's new neighbourhood of Nirvana Country. Prospective owners are offered an Indian dream: houses with air conditioners and Italian marble floors, with 24-hour electricity and water. Fenced off and privately guarded, the neighbourhood embodies the sanitised charm of Western suburban life.

It all comes at a cost. House prices in this part of Gurgaon start at 10 billion rupees (Bt8 billion), about 270 times the average Indian's annual income. This has done little to dampen demand. "When we last offered apartments we sold out all 250 in two hours," said Vikram Singh, sales manager with Unitech, the real estate company behind Nirvana. "On sales days it is chaos here. We cannot keep up with the buyers."

A notable feature of the new Indian economy is the "reverse brain drain". More than 40 per cent of Nirvana Country's housing stock is owned by returnees. Drawn by the money to buy the lifestyle they had overseas, Indians are returning in large numbers. Shiv Dayal, a former banker who worked on Wall Street and in the City of London, returned last year to start up Langham Capital, a corporate finance house with offices in London, San Francisco and Delhi. The 42-year-old says he moved back home for two reasons: the boom and his children. "We came back because we saw what was happening here and I thought Indian companies would need people to find their way in the world. I also felt personally that I wanted my kids to be Indian, speak the language, have Indian friends. It's important."

The influence of the returning talent is amplified beyond their numbers. Highly educated and with Western cultural perspectives, returning Indians have helped to bury India's notion of holy poverty. "I think that mindset has completely gone," said Dayal.

Little surprise then that the nation is set to become the world's fastest wealth creator in the next few years, according to the Boston Consulting Group. In two years there will be 1.1 million households with £50,000 in disposal income.

The paradox is that poverty abounds in a time of plenty. While a recent study found that one in five teenagers in Delhi are obese, a government report showed that one in three children under three are clinically underweight.

India appears not just an underdeveloped society but an unjust one. Last week bulldozers, flanked by riot police, flattened a slum in west Delhi at the request of wealthy residents. Two hundred huts made of bricks and galvanised steel were reduced to rubble in hours. A 12-day-old baby died during the demolition, according to its parents.

"The big people do not care for us," said Puja, the mother of the dead child, whose husband is a construction worker. "We have been here for years and they just wanted to get rid of us to make Delhi look beautiful."

Experts say that the West should not be blinded by India's poverty figures. Pointing out that the country's companies have penetrated hi-tech fields such as software and pharmaceuticals, British think-tank Demos warns that London's "presumed superiority" could breed complacency about India's potential. The think-tank says India has 14 million graduates - twice as many as the US - topped up by 2.5 million graduates in science, engineering and information technology every year. Yet British companies and universities are doing little to tap the talent pool.

"Britain is sleepwalking out of its special relationship with India because not enough people have woken up to how fast the country is changing," said Charles Leadbeater, a research associate at Demos and a former British government adviser.

Indian executives say that until a few years ago nobody thought India could shake off its slumber.

"[Firms] are certainly more respectful now," said Nandan Nilekani, managing director of Infosys, a software company he helped to found in 1981 with six others and £200. Infosys this week announced that sales in 2006 would top US$3 billion (Bt108 billion) and it would spend $300 million to create the world's biggest residential university, with rooms for 13,000 students.

"People did not buy the India story back then. Now they do. Indian motor companies will build the $2,000 car, healthcare firms have the $100 hospital operation and Indian banks offer global services at one-tenth the cost of Western rivals. We are faster, bigger, cheaper."

Randeep Ramesh

The Guardian

New Delhi