Abhijeet,
Let me first clarify my 'left-lib' comment before coming to the issue raised in your post. I made the assumption (perhaps wrongly) based on your emphasis on the HDI issue that you are a votary of the Amartya Sen school of thought - which de-emphasizes growth in favor of HDI / redistribution schemes (as you know, Amartya is the main force behind the HDI idea). This is the classic left-liberal thinking that went behind the economic mess that India is in today (no wonder Jagdish Bhagwati referred to 'those economists' as 'NY cockroaches who turn-up perennially'). In case you are not of that school of thought - my apologies in advance.
Coming back to the post of yours, my primary issue is with the phrasing (& I will elaborate on the couple of dangers I see there). Beyond the phrasing issue, there are only some questions that logically follow from your conclusions that can be validly debated on this thread.
As regards phrasing, you've yourself used the term 'poverty p0rn' in a recent post to describe an article from the Economist relating to India. It refers to the modus operandi of focusing with regular periodicity, for the magazine's own reasons, on poverty statistics of India to the exclusion of other aspects. Usually these statistics are completely true - but that doesn't make it any less of 'poverty p0rn'. I see the same danger with something I term as 'underdevelopment p0rn' which many from the Amartya Sen school regularly indulge in to focus repeatedly and incessantly on HDI / underdevelopment issues to the exclusion of any other positive aspect in India's growth....I definitely see the danger here based on some of your comments such as the ones below, as also many others where you've focused on infrastructure deficits as opposed to 'mental faculty deficits':
The biggest shock of living in India as an adult (after not having been here for many years) is how underdeveloped most people are mentally -- the average person has very rudimentary facilities for logical or analytical thinking. You can see this basic stupidity reflected everywhere in society.
... the average level of thinking skill, initiative, even basic communication, is just incredibly low.
So when I say things like "most people in India have limited mental faculties", I am admittedly being harsh and judgmental, but also accurate.
Btw, this 'underdevelopment p0rn' MO comes not only from one particular breed of 'economists' but also from many overseas sources who are looking to dent India's image and standing as THE leading offshore destination for high-end R&D work (Steve Sailer kind of statistics is an example of racist idiocy of this kind...Your comments will only provide ammo for Steve Sailer, despite the fact that you disclaim any 'genetic factors' as being responsible).
You mention that you are an entrepreneur. The very many entrepreneurs I deal with as part of my business, are typically highly optimistic by nature. In many ways it is an intrinsic part of being an entrepreneur. Entrepreneurs make things happen - they focus on the solution as opposed to the problem. Its the back-office / babu mentality of 'why things can't be done' that has been of immense irritation to me personally (as I am sure it has been for you).
Now that we are past the phrasing, the substance of the issue you've raised is that most (ie >50%) Indians are intrinsically less smart than Americans at the same percentile of IQ, because of HDI issues such as malnourishment. The questions that follow from this, which we can debate are-
1. What is the true percentage of the Indian population with cognitive / mental faculties impaired as a result of malnourishment and HDI issues?
2. What do we know about the effect of malnourishment on intelligence? How can we quantify this?
3. How much of the HDI issue is a drag on achievement of economic growth, ie is the rest of the non-malnourished population already fully productive in gainful occupation such that growth is now stunted because of lack of supply of reasonably intelligent workers?
4. Presumably, using your same logic, the average Keralite is much smarter than the average Maharashtrian or Kannadiga ? And an average Indian Hindu much smarter than an Indian Muslim ? Would you agree with these and other similar statements that apply your same logic regarding mental faculties?
Further, you've also raised an issue with the thinking abilities of the engineers you've come across. Presumably these engineers did not grow up malnourished. So would this mean you are now questioning the intelligence of the entire Indian population (rather than only those who grew up malnourished) ? This would imply that practically all Indians (including perhaps folks like yourself and the rest of us out here) are relatively less smart than an American at a similar percentile of IQ?? Besides obvious conflict with self-perception, this varies widely with the known statistics as to which locations are the most scalable for high-end R&D offshoring globally & available statistics on first generation Indian-American IQ.