Saturday, December 31, 2005

Knowing the problems

The common theme in this article about the Asia Tsunami, and another article about the Kashmir Earthquake, has been the inability to truly understand the problems. Funds came in fast, and relief efforts were immediately initiated, but in many cases these efforts were genuine though misdirected. Even after a year, almost 67,000 tsunami victims in Indonesia are living in tents, and only now has there been a real push to replace tents with temporary shelters. Fishermen were bombarded with offers of new boats, but factories which supplied ice to preserve their catch are not yet running. Efforts to restore education for school children have received more importance from the World Bank than funding to clean clogged ports. Similarly, resort reconstruction has begun in full swing to restore tourism, but roads have not been reconstructed in many parts as yet. Another article also talks in detail about this situation. The situation is even worse in Kashmir where supply is short for plastic sheets and tarpaulins for the tents in the fierce winter, because the areas affected by the earthquake are so inaccessible.

I am not saying that intentions for good work have fallen short in any way. Recovery efforts in both these disasters have been faster than ever seen earlier in history, but it is very important to recognize the problems and prioritize/plan accordingly. The same principles should be kept in mind whenever somebody plans new ventures for rural upliftment, be they related to agriculture, or education, or power supply. Simply setting up an Internet kiosk in a village is of no help unless easy to use applications can be built upon it. Setting up hospitals is no of help unless medical facilities are readily available. Setting up garbage disposal dumps is of help unless sanitation is properly done. Similarly, just opening a school in a village may not encourage people to send their kids to school when they could have lent a helping hand in the fields instead, but if schools are coupled with vocational education like handicraft skills which can generate revenue, then this may be a starter. Such things are not obvious at all: to realise what are the prerequisites for any kind of a project. This also goes into a lot of questions about the social setting and culture as well.

I will encourage all the readers to comment on this, maybe taking the categorization of rural upliftment needs to bring in some organization in the thinking. And a Happy New Year to everybody!

The story of wheat

A very interesting article on how wheat has been man's friend since the last 10,000 years. As soon as humans began making stone tools and took to cultivation, argiculture proved to be the answer to scarcity of meat during harsh climatic changes and cold winter months. Wheat farmers not only got stronger than their hunter-gatherer cousins, but their populations grew and spread, and they quickly became the predominant race. However, innovation in farming was slow. It took another couple of thousand years for cattle rearing to begin, and even more for the first plough to get invented. But human population was doubling at a much faster rate than wheat cultivation. In 1798, Malthus forecasted a population crash, but the crash was repeatedly avoided, first by bringing more land under cultivation in America and Australia, then by inventing the tractor, then by the discovery of nitrogenous fertiliers, and finally in the 1950s by Norman Borlaug who crossed different varieties of wheat to make it fungus-resistant. Borlaug was invited to India in 1961 by M. S. Swaminathan, and managed to adapt new varieties suited for the conditions of the Indian sub-continent. This started the Green Revolution and avoided mass starvation in India. But forecasts suggest that the world population will continue to grow until 2050 and will peak at 10 billion people. This will require further innovations in fertilizers, pestisides, and genetic modifications because "feeding 10 billion people will require at least 35% more calories than the world's farmers grow today, and probably more if these 10 billion people are to have meat more than once a month (it takes 10 calories of wheat to produce 1 calorie of meat)".

Friday, December 30, 2005

HLL Shakti dealers

HLL started the Shakti programme in 2000 to empower women in villages to turn into entrepreneurs and start retail outlets for HLL products. It has been very successful, and now HLL is using the same network to help partners like insurance agencies to get access to the rural population, much like the ways in which ITC is using their e-Choupal network for advertisements. Not only does this give the women entrepreneurs a chance to gain importance and respect in their village, but it also gives them an economical incentive to keep the retail store running. For the other villagers, it brings FMCG items to next door.

The ills of the system will be if this turns into a monopoly because Shakti outlets can only market HLL products. Hopefully this will not happen in a competitive economy like India.

Casas Bahia

Casas Bahia is not just a retail store, but it has pioneered a unique system of installment payments based on the customer history. It now even allows the poorest of the poor to buy essential items and pay back over time in installments.

Construmex: building homes

It is a division of Cemex in Mexico, that not only supplies cement for construction purposes, but also gives advise on efficient design of homes and cheap alternatives to construction. Coupled with micro-finance outlets, it has helped build homes for people who used to live in cardboard shelters earlier.

Btw: You will have to translate the page into english.

Aravind Eye Care System

Aurolabs, the manufacturing division of Aravind, have developed their own mechnisms of making cataract surgery lenses for 4$ as compared to 100$ out west. Not only has this brought new light to many blind eyes of the poor in India, but the products are even exported to over 80 countries. If somebody cannot afford to pay for the surgery, that is fine too, because everybody who pays, is able to cover the costs of two others who are unable to pay. If getting eye treatment is difficult in the village, people are given free transportation to Aravind eye clinics, and free lodging for the assistants too.

Such dedication to the cause is unbelievable. I just watched a video about this, and I was rendered speechless.

Selling soap: handwash or eyewash?

This is an interesting/amusing article on whether soap manufacturing companies are resorting to the rural market only for profits, or also for a social cause.

The facts: More than 6000 diarohhea related deaths in the world in a day. Diarohhea is caused due to bad sanitary conditions.

The propaganda: Must wash hands with soap before meals and after toilet. Use Lifebouy from HLL.

The accusations: This is a ploy. Washing hands is not as important as the supply of clean water, infrastructure for sewage systems, and garbage disposal. Companies are doing it only for earning profits.

The critique on the article: Even if not a 100% solution, washing hands does help, right? Even if the companies earn profits, so what: let a competitive economy take care of lowering prices, and leave the companies to extend their retail network into rural areas please. If the author must argue, then she should argue that the companies are conveying incorrect information to the people by saying that washing hands will solve all their problems. As long as they are not doing this, it is always good to educate people that washing hands is important.

My personal argument against companies on this topic will be that companies like HLL have ignored their socialist responsibilities, and they should use their profits from other products to fund better sanitary conditions for the villages.

Jaipur Foot

This is clearly the cheapest and most efficient way to get people who are below the poverty line, back up on their feet. Generic feet samples are made in advance out of stiff rubber, which allows the feet to grip and twist. The actual limb is prepared by making a mould from the amputated leg, which is then filled with rubber and frozen in a vaccum chamber, painted, and then attached to the rubber foot at the bottom, and a special contact socket at the top that prevents edema and injury to the stump. All this is done within a single day, and people can have new legs by evening. They are able to run, climb trees, jump, and dance! And this is enabled through no sophisticated technology. Whereas below knee prosthesis becomes simple in this way, above knee prosthesis is also possible. Agreed that such artificial limbs are not as good as sophisticated prosthetic limbs, and not exaustive for different kinds of amputations, but all the same, this is an affordable alternative for people who are the sole bread earners of their families.

Voxiva: connecting you and your world

Such a simple solution to such a complex problem - I am highly impressed. The problem is as follows: How do you communicate about disease outbreaks or thefts or other events in remote rural areas to the proper agencies, so that they can take prompt and appropriate action? The solution is to unify whatever infrastructure exists - cellphones, landlines, SMS, fax, email - through information technology and use that to report back incidents. Voxiva hands out scratch cards that carry information of what phone numbers to dial, or what email addresses to write to, and their backend office processes these reports to detect false alarms, clusters the reports together, and notifies the proper authorities to take appropriate action.

Could this be the answer to extending the global brain into rural areas through village kiosks and other means, and use it to put media into the hands of the people for a better and truer democracy? Viplav, are you listening?

A report from the University of Michigan prepared by Dr. C. K. Prahlad and his students.

Kalam calls for global monsoon research

It is not just the accurate and timely prediction of monsoon rains that is important for agriculture, but water management in general, which includes river irrigation, construction of canals, and maintenance of catchement areas. 22% of India's GDP is based on agriculture, and in turn, on the monsoons, and therefore good research is surely of tremendous importance. The projects can prove useful even for hydro-electricity generation.

Socialist Companies for a Socialist Democracy

Axiom #1: There is untapped fortune at the bottom of the pyramid
This was first advocated in 2002 by C. K. Prahlad in his article (now a book) Fortune at the Bottom of the Pyramid, and it has since then become the holy grail for any social entrepreneur. There are 5 billion people in the world living in poverty, and if services are developed for them in the right way, then it can not only help eradicate poverty, but also become a huge business opportunity for the service providers. No wonder Reliance is trying to tap into the rural market with increasing cellphone penetration, and HLL is marketing FMCG items to the villagers. In fact, more than 80% sales of certain goods comes from the rural market itself. Even other companies like Titan, Videocon, and Asian Paints are joining in the fray.

Axiom #2: The top of the pyramid is getting richer with more disposable income
The growth of movie theatres and shopping malls, the exponential increase in the number of cars running on the roads, and more and more Indians vacationing abroad, are clear symptoms of the fact that the upper and middle classes are getting richer and richer. Many factors contribute to this, including the fast growing IT services market, increase in FDI for steel manufacturing, an attractive tourism industry, and positive outlooks for each and every industrial sector. This has resulted in a fast increase in salaries, but inflation is still low, leading to more and more disposable income in the hands of the people.

Axiom #3: Economics is all about cash flow
This is the first lesson in any micro/macro/industrial economics class because cash flow is needed for growth. If a company just sits on its profits without rechanneling it into streamlining processes, or organic and inorganic growth, it cannot grow and remain competitive. Similarly, cash flow is imperative for a country's economy so that appropriate monetary and fiscal policies can be applied to manipulate inflation and interest rates, which in turn mobilize the government, private companies, and the people to make investments. Creation of cash flow was also the main reason for stock markets to come into existence, so that investors could more efficiently utilize their cash reserves.

What happens when you put all these axioms together? You get what I call socialist companies. A socialist company is one which creates cash flow by mobilizing its earning from the richer middle and upper classes, into providing services for the bottom ofthe pyramid. This is rare in today's scenario. Most companies just cater to the middle class and feed their profits back into more and better services for the same middle class. A lot of the companies in the vehicle industry, housing sector, entertainment services, and retail chains are good examples. Why is this bad? For a lot of reasons.

Firstly, the sustainance of these companies becomes dependant upon the state of the economy: till the time the economy is doing well, the middle class will continue to grow, and the industries will profit. The moment the economy dies, as what happened during the dot com bust, all these companies will begin to run into losses. Fortunately India was not badly affected by the 2000 economic downturn, but the economy is much more global now, and becoming more and more global each day. India will not be able to escape the bitter consequences of a global downturn this time.

Secondly, disposable income with the middle class consumers is not infinite. A city can only sustain a certain maximum number of movie theatres and not any more. The basic law of diminishing returns comes into play, and companies need to diversy into different areas in order to grow.

Thirdly, the returns from tapping into the huge rural market can be much higher and faster than the RoI from the middle class. I wish I knew enough economics to prove this, but ITC, HLL, ICICI, and many more are already doing it and it is working.

Fourthly, and most importantly, this should be considered as a moral responsibility by all companies working in a socialist democracy like India. Responsibility does not end just by paying taxes and leaving the socialist aspect to the government, but by taking socialism to the grassroots and applying it yourself.

Many will argue that the core competencies of their companies cannot be applied to rural services. Some might say that even if they want to create other companies, their scale of operations are too small to do so. Very rightly so. Every company or person cannot be rich and/or philanthrophic enough like Bill/Melinda Gates and Bono. But as they say in hindi, Boond boond se hi sagar sagar banta hai. And this sagar or ocean can be organizations none other than micro venture capital firms like Aavishkaar. The VC model of funding ventures is much better than the bank model of giving loans. Companies should partner with micro-VC firms to generate corpus funds which can help create new and sustainable social ventures. These companies will then be called socialist companies, and they can tap into the rural market indirectly and profit from the new ventures. It is all about generating cash flow in the right direction, and this direction is rural India. Profiting from the cash flow directly or indirectly is hardly of any consequence, but the key is to mobilize new ventures by creating the cash flow required by them. Micro finance organizations are using the same principles of cash flow to instead mobilize the poor people. Thus, micro finance circulates cash among the consumers to buy goods and services, and micro venture capitalism circulates cash among the new ventures to provide these goods and services. The huge potential unlocked by this combination of micro finance and micro venture capitalism is still to be realized, but not entirely unachievable.

To examine what kind of new ventures can be created with the help of the so-called socialist companies, we need to first identify the problems faced by rural India, and then examine possible solutions for it. I will do so in my next article.

Wednesday, December 28, 2005

Narayana Murthy blasts corrupt politicians

Everybody can see that the system is broken. Narayana Murthy can see that. President Kalam can see that. Arun Shourie can see that. I can see that. You can see that. But why aren't we doing anything to change it? If the system must be broken down and replaced by a new system, then let's break the damn thing down. If not, and the system can be set right somehow, then let's try to do that at least. Please.

This goes to the height of frustration really. The Economist is running a story about the glory of India in IT, but on the same page there is a column about the 11 ministers video-taped taking bribe. Not only is it embarassing to know that the world is laughing at us, but it is unbelievable that we are putting up with such nonsense. Why is so much crap happening out there? The fodder scam, coffin scam, security scam, stamp paper scam, Enron scam, the list just keeps going on and on. Why? Is it the media, or the illiteracy, or the caste system, or the poverty? Well, it's all of those and none of those. It's you and me who have learnt not to protest and to be happy with our own lives. We are happy that we speak good english and work in callcenters and say "Hello, how can I help you..." all day long and take back fat salaries and fund the corruption even more. Until we don't stop doing that and protest against the system, all talking and bullshiting about the system is of no good.

It's easy to put all the blame on the politicians, but who is responsible for it? If you don't keep a check on your children, you won't be surprised that they waste their time all day long and get into drugs. If you don't keep your dog on a leash, it'll go out and eat filth and bring filth into your home. Heck, if you don't keep a check on what you eat, you will end up all in filth. It's the same thing with politicians, and it's the same thing with a democracy. It's a government for the people, by the people, of the people. We are the people. Until we don't get our act together and become responsible, everything else is in vain.

Tuesday, December 27, 2005

Bharat Nirman

Rs. 174,000 crores have been pledged for development of irrigation, rural water supply, rural housing, rural roads, rural telephony, and rural electrification. Taken together with other initiatives like guaranteeing rural employment through the implementation of the National Rural Employment Act, the improvement of rural health through National Rural Health Missionm, and the improvement of rural education through Sarva Shiksha Abhiyan, there is certainly going to be a new deal to rural india provided they are properly implemented.

Apart from this, the government has also pledged to spend Rs. 50,000 crores on urban development, Rs. 25,000 crores on freight railway development to connect the major metropolitan cities together, and work with the private players to provide telecommunication services ubiquitously.

Gaurav pointed me to this article in the Washington Post, which carries an interesting perspective on how development can be triggered by laying out the appropriate infrastructure, instead of following the traditional view that education precedes any kind of development. In fact, the business of education itself will become more efficient if rural areas are well connected through roads and have a good power supply. Of course, once schools are opened up and literacy levels start rising, dreams also rise, and the society as such moves into a higher spiral of life.

Why are people poor?

Researchers have found that the most important reason for poverty is debt, and the most important reason for debt is healthcare. It works like a spiral. A family member falls sick and his source of income is cutoff. This leads the family into debt, and often times families are not able to emerge out of debt. Sometimes this even leads to the death of the family member, which has even severe repurcussions to the economic health of the family. Is this the reason why micro-financing is so important? And what can we do to improve healthcare in a country having the third-largest number of doctors in the world? Is it a lack of facilities, os is it a lack of accessibility, or is it a lack of dedication, or is it simply incompetency?

Kalam for 10% GDP growth

President Kalam highlighted the following sectors as being the most important ones to uplift the 260 million people of India from below the poverty line: agriculture and food processing, reliable and quality infrastructure, education and healthcare, information and communication technology, and the development of strategic sectors. He also stressed on the importance of micro-financing in being able to accelerate the development process.

The most interesting point was the observation that 50% of the population is below 25. This is surprisingly different from the ageing populations of countries like Germany, and indicates the tremendous amount of youthful workforce in the pipeline, which should be leveraged. President Kalam proposes creating two cadre of people: skilled youth with special skills who can drive the manufacturing industries, and youth with higher education who can drive the IT and other production sectors. Is this something like a fascist approach where the government tells people what to do? Well, even if it is, we know that it worked very well in the past with other countries, and if it can be exercised even loosely in the Indian democratic system, transparently, then it surely makes a lot of sense.

CII highlights the importance of manufacturing to achieve these high GDP growth rates, and also cites skill development as one of the most important to-dos. However, it is not the only to-do and there are many other stakeholders as well. The government needs to revise policies for more flexible labor laws, and cost and access to credit. The infrastructure needs to be improved. And most importantly, new technology needs to be developed.

This last point on research and development in technology has been highlighted in another article as well. We are doing well in the services sector, and hopefully we will continue to do well if the infrastructure is improved and skilled labor is available. But what about the products space, that is, new products to manufacture, and technology to make this production more efficient? The revenues from services are linear in terms of the number of employees, but it is product development that makes these renevues exponential. At least in IT, we are gradually moving to a stage where we can leverage the expertise we have gained from services, to innovate and develop product companies. The same should be done for manufacturing too, just like what China did. The time is ripe and all the investment is already coming in for the sectors of chip manufacturing, networking equipment, automobiles, telecommunications, and consumer electronics. We need to view these developments in not the present tense, but the future vision of gaining expertise and then leveraging it to manage our manufacturing sector ourselves.

Monday, December 26, 2005

Keep going... But how?

The PM says that there is no shortage of development money, and he has committed Rs.50,000 crores for infrastructure improvement over the next 4-5 years towards upgrading roads, bridges, and the transport system.

But this might quite well be an underestimate, considering the immediate needs for an additional 100,000 MW of energy, new airports, waste disposal systems, and better water supply. It is argued that the answer to solve these problems is not by providing funds, but by creating policies that will attract more investment. Currently, there are some things very difficult to do in India. The Bangalore airport proposal has not seen the light of day since the last decade. Enron was quite a disaster. Even though cheap and skilled labor is available, the red tapism is so extensive that it actually takes half the time and 70% of the cost to set up BPO centers in Singapore than in India. Even though the operating costs are lower in terms of salaries, but electricity is more expensive and the infrastructure is very poor to be able to sustain the rapid growth in IT.

This is what is feared even in the latest McKinsey-NASSCOM report, and India must act now to brace itself for the future. Not only should the infrastructure and the set-up processes be improved, but even manpower, which has been the selling point so far, might run out if the problems are not tackled. The dwindling manpower is not because enough students are not graduating, but because the students are not well qualified, or in other words, the education system is broken. Presently, the total strength of people in IT employed today is 700,000, and this is likely to grow to 2.3 million in 2010, but India can provide only 1 million. The reason is that only 10% of the 2.5 million new graduates each year are fit for being employed in BPOs. And only 25% of the 350,000 diploma holders are fit for working in the IT sector. The trend is not restricted to IT alone, but to other sectors like real estate, FMCGs, airlines, textiles, pharma, chemicals, biotech, telecom, and automotive industry as well.

The solutions might not be so simple. The government is trying to frame a national semi-conductor policy where chip manufacturers will be given access to free power and free land, to bring India up to speed in the manufacturing sector. This is something like the SEZ (Special Economic Zones) policy of China, and should be extended to other industrial sectors as well. Simply speaking, if it is difficult to change Bangalore, then a new Bangalore city should be created stocked up with all the essential infrastructural amenities. Things are moving towards this, but only very slowly.

Narayan Murthy has proposed a 4-point plan to improve higher education in India, because education is the only solution to narrow the demand-supply gap. He says that education should be liberalized and the role of government should be kept to a minimum. Private money should be funneled into the education system by the formation of long sighted socialist companies rather than short sighted capitalist companies. Meritocracy should be introduced in the salary structure of the faculty. Subsidies should exist only for basic education and not for higher education. If an economically backward student desires to study, then support should be provided not on the basis of caste, but on the basis of the financial situation. In other words, the reservation system should be de-emphasized. In my opinion, all of these are ideal points, but the ills of an easily hackable democracy will prevent their implementation. Take for example the 104th constitutional amendment that was just passed, which allows the government to micro-manage private schools in terms of the ethnic background of the students for "fair representation" of the minorities.

In short, quite a lot needs to be done, and done soon, keeping a vision of the future in mind.

Vegetable vendors to sell CDMA phones

Reliance has taken sales and marketing to a new extreme, to promote cellular telephony in the rural areas. Not only are they rapidly expanding their deployments, but they are actually roping in vegetable mandis, cable operators, and cooking gas operators to market and sell their products. This is even more grassroot than the ITC plan of using e-Choupals as a platform for advertising. And even more grand, both in vision, as well as in scale.

Broadband on powerlines

If this works well, and is cheap, and can support voice, then this could certainly be a good answer to rural connectivity problems. What more does anybody need - get electricity on power lines, and Internet on the same too! Trials are underway and they sound promising, but I don't really know what to believe because there are articles which argue quite the oppositie. There are other issues too. Using the BPL infrastructure to backhaul data all the way to the Internet will need villages to be wired into the grid, but this may not always be possible, or even needed, when stand-alone power plants can be used to supply energy to the village and other neighboring ones as well. If BPL cannot support voice then it will become hard to sustain and maintain it on the basis of data alone, and communication lines will have to be laid out anyways. Things are not so simple really...

But India is apparently looking at BPL as a viable solution to rural communication. Indeed, in places where the infrastructure does not exist at all, only the best solutions should be implemented, be it BPL, or WiMax, or WiFi, all integrated with the PSTN network where ever it is available.

BBC on rural connectivity

Setting up e-Choupals is a great idea, but the problem of connectivity always comes up. What options do people in the villages have for getting connected to the information centre? Telephony is only limited to 80% of the vilages in India. Satellites provide a viable alternative, but they require to set up VSAT terminals which are both expensive and need to be maintained. Furthermore, their usage is restricted to data, and therefore economic sustainance becomes a greater issue. Wireless meshes using WiFi or WiMax are being actively tested and deployed, but the problem of maintenance and economic viability still remains. However, cellular networds are getting more and more widely deployed, thanks to Reliance and other cellphone companies. Not only do cellular networks being in data communication through SMS and other data services, but they also provide basic voice telephony that can have dramatic affects on the lifestyle of the people. Voice services also ensure a steady source of revenue for the cellular providers, giving them an incentive to extend their deployments. The interesting fact is that 85% of all villages are within 20km radius of fiber connectivity! Therefore it is easier to set up cellular networks without the need for laying out any extra fiber.

The most interesting option however is that of carrying a GSM phone on a bicycle from village to village, and creating a PCO on wheels to provide public telephony services in the different villages!

However, cellular networks do not support high data rates, which are necessary for downloading/uploading educational content, videos, and other transactional data like electricity bills and mutual funds. Our research group at the University of Waterloo is trying to solve this problem by enabling mechanical backhauls like buses and vans to ferry data to and from the villages.

Janaagraha: Participatory Democracy

The lines in my blog description summarize exactly what Janaagraha does. They believe that fighting literacy, poverty, hunger, and all the ills of society is good, but what is more important is to get to the root of the governance structure and improve it so that the ills can be prevented from being born in the first place. They follow a model similar to that of Viplav to ensure good governance, by increaing the involvement of the people in the system. They call this participatory democracy to create a platform for communities and governments to engage with each other. This involves many things, including transparency in functioning, decentralization of administration, and collective decision making.

The vision is correct, but in my opinion there are significant other problems to solve as well. Firstly, people need to realise their responsibilities to create a participatory democracy, which can come only with education and awareness. Secondly, they need to be intelligent enough to analyse the data that is put in front of them, which can come only with literacy if the data is presented as it is, or with a more understandable representation of the same data otherwise. It is actually a phased approach, but which needs to be started rightaway.

Micro Venture Capitalism

The pointer is from Saurav. Aavishkaar is the very first of its kind. Clearly, micro venture capitalism can be a much greater force than micro-financing, simply because of the scale involved, and the impact that a new entrepreneural venture can have. Aavishkaar funds projects of Rs. 10 lack to Rs. 50 lack, and gives strategic support to entrepreneurs in setting up their companies to provide better goods and services to rural and semi-urban India. It surely seems that social entrepreneurism is going to be the answer to it all, and organizations like Aavishkaar are likely to play a big role in making it easier.

How about taking this idea a little further and having successful capitalist companies contribute some portions of their profits to the Aavishkaar fund. The returns on the investment will surely be great.

Wednesday, December 21, 2005

Global Brain

The idea is not new. It's been around since Douglas Adam's HitchHikers Guide to the Galaxy, Scott Adams God's Debris, and a bunch of other books and thoughts. The humans constitute a complex matrix to make a global brain - that's the whole idea. In the context of media and society, and their role in a democracy, the same concept is applicable to remove the biases created by organized media, and more importantly, to bring together the people for increased awareness and to integrate them into the mainstream of politics and democracy.

Tuesday, December 20, 2005

Kalam's digital dream for India

President Kalam entertains a vision about politics in India that is very similar to the goals of Viplav from the point of view of the people. They should be able to gather data on the educational qualifications, employment records, sources of income, and police crime records of the politicians. People will even be able to cast votes from their homes without going to the poll booths.

Clearly, IT and automation can bring in transparency and reduce corruption. eGovernance just not only mean filing of income taxes online!

I do not however agree with the use of an artificial intelligence software to predict the chances of success of politicians. Why use computers for this, when the people themselves constitute a global brain?

Viplav Communications

A first step towards a true democracy is being taken by my seniors from IIT Kanpur who recently started a company called Viplav Communications. Viplav reaches out to the people, listens to them, and communicates their issues to the political representatives of the different constituencies. For the representatives, they let them know what people want them to do, and help them in making future plans for the constituency. Although they are currently looking at this from the latter point of view, that is, acting as a management consultancy for the politicians and political parties, but their long term goal is to help people themselves closely monitor the performance of their elected representatives, and to convey their requirements to the representatives.

This is amazingly similar to President Kalam's vision of the virtual election.

Sunday, December 18, 2005

ITC e-Choupals

Raj Addepalli from Orkut pointed me here. These two presentations contain a good overview of the e-Choupal initiative by ITC. They have managed to install Internet access free of cost to connect more than 31000 villages and supply pricing, fertilizer, seeds, and weather information to farmers. The most amazing thing is that farmers have begun to follow global pricing trends, and decide based on it when to sell their produce. In addition, they have helped create a transport infastructure to facilitate ferrying goods and produce to and from the market and processing centers. All this leads to elimination of intermediaries which not only helps farmers to earn more, but also speeds up the entire supply chain.

ITC e-Choupal Experience Sharing, by S. Sivakumar.
Going Direct to the Farmer: ITC's e-Choupal Initiative.

Micro-financing: The Gains and the Resistance

The Economist has an excellent article on micro-financing. The problem so far has been that interest rates are generally too high for the poor people to afford them. Plus, most banks are really not interested in going into the rural areas for investment because (a) the volumes are too low, and (b) the judicial and monitoring systems are too lame to keep track of loans given to villagers. However, financing the poor is very important because otherwise corrupt money lenders and pawn shopkeepers get a free hand with exploitation, and sometimes the interest rates amount to over 40% with all the bribery that goes on.

However, as The Economist puts it, in recent years, at least in some parts of the world, this bleak picture has begun to change, first in credit, then in savings and more recently in remittances. Grameen Bank and ACCION International pioneered the micro-credit concept, where they gave loans to extremely poor people and made the group members monitor each other to ensure repayment of loans and compensate for the lack of any collaterals. People who payed back were allowed to borrom more. Both the organizations are not-for-profit, but they manage to make profits all the same which they rechannel into other development projects. The idea of starting with credit instead of saving was a great one because apparently, the poor did not believe in savings. However, once the credit concept grew popular, even savings has picked up with BRI in Indonesia. Now, even the bigger banks are venturing into rural markets with more and more financing options.

The sceptism is still there though, because most of the micro-financing banks are not-for-profit and the initial capital comes from philanthrophists and governments, which do not have to paid back. Therefore, large defaults may go unreported if the auditing is not very strict. The very low loss rates of 1 to 3% achieved by these banks may not really be true. But all the same, it is great to have come so far!

Micro-financing cannot alone change the world. It needs support from the government and society alike. For example, a Kenyan microfinance bank closed down when the government stopped cleaning the towns and rebuilding the roads, because a poor infrastructure ruined the small businesses started by people and they were not able to pay back the loans. And even more disgusting has been the attitude of Maoists in Nepal, Islamic fundamentalists in Bangladesh, and drug lords in Afghanistan, who do not like the system because it gives too much liberty to the people and empowers the women.


Srishti means creation, and stands for Society for Research and Initiatives for Sustainable Technologies and Innovation. They seem to be doing amazing work with discovery of local innovations and technological developments, and then promoting it. They conduct Shodh Yatras where they visit different villages and learn about interesting things that people are doing, like an amphibious bicycle, an areca nut husking machine, tilting bullock cart, bamboo splints device, bicycle sprayer, coconut tree climbing device, coconut defibring machine, cycle operated water pump, oil seed crusher, garlic peeling, incubator for hatching eggs, lemon cutting machine, pepper thresher, water turbine with irrigation facilities, and much more.

What is more important is the vision that bringing technology closer to the source of production eliminates a lot of middlemen and red tape, that can only improve production and the economic status of farmers.

Saurav just told me that the person behind Srishti is Prof. Anil Gupta from IIT Ahmedabad. His page is located here. And a good article is here.


This is exactly what is needed! Terra Firma is trying to set up argicultural information centers that will not only provide information to farmers about the right seeds and fertilizers to use, but also help in smoothing out the supply chain so that timely delivery of various raw materials can be made. I believe that a strongly coordinated effort is required to bring together organizations like Terra Firma and Drishtee - independent functioning may not be very scalable and sustainable, but together their sum can make a big difference.

Agricultural development in ACP countries

ACP = African, Carribean, and Pacific countries. This is an excellent page on innovations in agricultural cultivation. The following articles seem really interesting.

Just like drumsticks in India, grain amaranth is grown in Kenya and is resilient to drought, pests, and diseases, while also carrying high nutritional value.

The hammer mill is a portable grain mill, and it is definitely a good idea for the farmers to mill their produce themselves, rather than ship it off to large granaries. Doing it at the source itself will help eliminate middlemen and hence corruption, and also bring in more money for the farmers.

Like Waste Concern from Bangladesh, similar organizations are active in the Carribean as well that use waste to produce biogas for power, and fertilizers for the fields. Infact, waste products from rice husks can be dried and used as fuel.

Some species of nitrogen-fixing plants have also been identified that can be grown with agricultural plants and convert atmospheric nitrogen to benefit other neighboring plants.

Drishtee: The vision

Drishtee is another organization working with the government towards building rural Internet kiosks which will serve as not just Internet cafes, but much more. They defines a kiosk as a multi-point service delivery channel in a village. The kiosk operator will provide different kinds of services to villagers like computer education, insurance, digital photo studio, and the Internet-based services. The kiosk will be equipped with a computer, a digital camera, and a photo printer. ICICI bank is financing these kiosks. And if you read about the portable ATM machine made by the TeNeT group from IIT Madras, then all this makes much more sense. The activity is clearly on with even Microsoft and Intel being interested, and I hope all of this goes through well.

An excellent pointer from Raja Malapati's blog talks in detail about President Kalam's vision of knowledge centers in rural India led by Self-Help Groups (SHGs). It has mention of the role being played by Microsoft, the TeNeT group, and the M. S. Swaminathan Research Foundation. Apparently, some funding also comes from the International Development Research Centre (IDRC) of Canada. Over 1500 kiosks have already been set up and I am eager to know more about the level of success achieved.

Bug free PC from Intel

Intel demonstrated the community computer due by early 2006 which can tolerate temperatures of up to 38 C, and has air filters to prevent dust from entering into the computer. This seems to be just the right platform to use in village kiosks where power failures are common and dust-free operating environments are quite unrealistic to maintain. Especially considering the 1 billion $ committed by Intel for India and it's tremendous push for e-learning, all this sounds quite promising.

The PC is likely to be priced around Rs.10,000, and can prove phenomenal in bridging the digital divide.

A follow-up on this article: Intel released the community PC in India. However, during my trip to India, I talked to many NGOs about it, and all of them were quite disappointed with the product. It is basically the same Celeron 1.3GHz with the standard 865GV motherboard. Only the cabinet seems to have been retro-fitted, but it can tolerate temperatures of only up to 45C, which is quite standard for Indian environments.

Saturday, December 17, 2005

The despairing infrastructure

There are all sorts of conflicts going on in the WTO about opening up foreign markets for agricultural produce from developing countries, but the government of these countries certainly has a lot of homework to do before that. Banana production is abundant in Central American countries but there is no infrastructure to transport these bananas. Plus, there is extensive red tape involved as well. Indian exporters need some 22 signatures on 10 documents, and sometimes over a month of transit time, to export any of their goods. Not even export, but even for circulation within the country, do you recall the food scam from 2003 where granaries in Bihar were overstocked with material but people were dying of hunger in Orissa.

A lot of homework needs to be done. Elimination of red tape by automation and IT, construction of better roads for transport, getting goods to and from the railway stations, and communication infrastructure for setting the right prices are just a few things that are needed.

India's superhighway into the 21st centrury

Sher Shah Suri was certainly a visionary when he built the Grand Trunk Road from Peshawar in Afghanistan to Calcutta in India way back in the 16th century. Building a connecting infrastructure can radically change the life of people. Transport becomes easier from one point to another, improving export of goods and services. Access to medical facilities becomes easier. Awareness increases. In short, it's the first step to globalization of the different communities that get connected through roads.

The same vision is being taken forward by the Indian government who have pledged more than 7 billion $ for paving over 40,000 miles of Indian roads. Not only is this necessary to serve as a nervous system of the Indian people, but infrastructure is also needed to support the rapid growth of IT and business process outsourcing in India. McKinsey and NASSCOM have recently brought a report on what India needs to do to keep growing, and the executive summary is available.

Sure Start Child Care

The government of UK has finally realized that its children were not being look after properly, and were growing up into ruffians and hooligans! Sure Start is a chain of child care centers being set up all across the country to serve as day care and educational units for young children. It's still to be seen how successful and useful this can be, but it's a start. Phulki started in Bangladesh also has similar goals.

All of these are positive efforts for sure, but anybody I talk to in the context of India, gets to the bottomline that so many people below the poverty line would rather have their kids work with them in the fields or factories, than send the kids to schools and day care centers. It's an old problem, and even Albert Camus talks about it in detail in The First Man. My answer is two fold:

1. Society strata are always a spectrum, ranging from the very poor to the very rich. Such day care centers are definitely relevant to people not at the bottom strata of society, but slightly higher up where they can afford to send their kids to school.

2. Talking about the bottom strata, what if the kids were taught some crafts like stitching or pottery or claywork or painting or paper-mache or toy building or just about any small scale industry support activities, so that they could earn and study at the same time. What is needed is to couple vocational training with day care centers and schools.

Bright prospects for renewable energy

The Economist has a story running on the bright prospects of renewable energy. Some exerpts:

All the biggies are getting into the game, including the oil giants Royal Dutch and Shell, and GE's focus on Ecomagination where Jeffery Immelt reiterates his vision of "Green in green" referring to a green environment leading to green bucks. The likely reason is that all nations, especially India and China with their rapidly growing demands, are getting more and more into deployment of environment friendly technology. Therefore companies have to differentiate themselves on its basis, especially with the whole Kyoto deal (which was more or less a failure but it's the first step that matters the most). The upside is more and better options for stand-alone unconventional power production units, which are also environment friendly.

The problem with renewables was their payback periods and expenses that could only be supported by government subsidies, but that it likely to change with all the research going into renewables. Another positive factor are clever business models that allow "smart" meters to do hour by hour changes in electricity prices and switch from one power source to another. For example, self owned solar panels mounted on home roofs can be used on sunny days, and the backup grid can be used on rainy days.

The interesting find was that most efficient wind turbines can produce electricity at the wholesale price (the price at which electricity producers buy and sell power on the grid) competitive with non-renewable sources. Solar panels cannot produce power at such low cost, but comparing their cost-per-kWh with wholesale prices is arguably not the most relevant comparison. This is because in general, solar panels are used not by electricity producers but by consumers who use solar power to supplement or replace power bought from utility companies at retail prices. So, solar power need only match these higher retail prices in order for homeowners and businesses to start to consider it as a viable alternative. And it turns out that the most efficient of today's solar panels do indeed match the retail price of electricity in some parts of the world with high retail prices.

Thursday, December 15, 2005

What India Needs: The Role of Media and Society


No country could be called a true democracy in 1900, but today there are approximately 120 democracies in the world. The reason for this huge success is that the democratic system is wonderfully magical and theoritically utopian in its functionality. In the simplest terms, the system works as follows. People elect their representatives based on the past performance of the candidates, their expectations from the candidates, and the promises made by the candidates. The elected representatives are answerable to the people - if they do not perform well while in office, the people will not elect them the second time around. The elected representatives in power comprise what is called the executive. The executive makes policies that are ratified by the legislature, also called the Parliament. These policies are then implemented by officials in the administrative services; the elected representatives make sure that these implementations are carried out properly. Thus, the bureaucracy is told what to do by the elected representatives, and the elected representatives are roughly told what to do by the people. If anybody in this chain of responsibility fails in their duties, they are ousted from power. It seems to be the perfect monitoring and answerability system. However, all of this rests on some fundamental assumptions, the biggest one being that the people are rational; they do a good job at monitoring the activities of the elected representatives, and make voting decisions accordingly.

Let's see to what extent this assumption holds. India is the largest and one of the most successful of all democracies of the world; therefore, let's take its example. The voter turnout is hardly over 40% - why are rest of the 60% not concerned at all about who gets elected? Politicians have discovered hacks in the democratic philosophy like the caste system, reservation for minorities, poll booth highjacking, and bribery to create vote banks for themselves - how can the people not see through this hypocracy at all? How can people who have studied for 22 years to be engineers and 25 years to be doctors not be bothered with being led by a bunch of highschool-failed politicians with large trails of crimminal records to their credit? This blindness and nonchalance of the people cannot be called rationality in any way. It simply leads to a fake democracy.

Let's see what happens when people become indifferent and stop caring. Well, obviously the elected representatives whom the people were supposed to monitor, now get a free hand. They become lax, corrupt, and the development slows down. Now, there are two ways to solve this problem.

The first approach is to chuck democracy, and do what China did. Communism. In other words, China assumes that its people are stupid and irrational and do not know what are the best things to be done. Therefore, the Communist Party makes strict laws in which it dictates who should do what, and it makes sure that the people follow these laws. The system works wonderfully. Look at the 9% growth rates of China, the foreign investment of over 50 billion $, the manufacturing facilities of China which are just operating at 10% of their capacity, the cash bids for Unocal, and now the space missions as well. Everybody is scared of China, including most of the popular democratic nations of the world.

The second approach is to assume that democracy cannot be chucked out so easily, and to see what is the best that can be done. To infer the solution, let's try to figure out why the people who fought so vigourously for independence and creation of a democratic nation, suddenly turned cold, non-caring, and stupid. In my opinion, it was because of a lack of awareness among the people on what a democracy really is, and what are the responsibilities of the people to ensure a good functional democracy.

Role of media

Adolf Hitler made everybody buy a copy of Mein Kampf so that the people could understand his vision and appreciate it. Martin Luther translated the Bible into German and wrote his own interpretation of how things should be so that the people could read about it. Karl Marx wrote the Communist Manifesto which inspired so many people that it is almost unbelievable. But in India we missed out on the significance of the printing press big time. We wrote books like The-Discovery-of-India and My-Experiments-With-Truth which had nothing to do with teaching people about democracy. We copied the British constitution and to this day we celebrate the Republic Day each year, without knowing what the constitution really contains and what being a Republic really means. Anyhow, there is no point in grumbling over spilt milk. Let's see how things can be changed, and what is the biggest force that can help in bringing the lost awareness back to the people.

It's the media obviously. What does the media do? It supplies good content to the people via a good communication infrastructure. In other words, there are two requirements: creating content so that people can understand it, and creating the infrastructure so that people can access the content. The media brings awareness to the people, and I believe that awareness triggers thinking. Once the people are more aware, it will automatically make them think of good and better ways, which in this case will be good and better ways to create a good and better functional democracy. Look at the Internet for example, and the tremendous amount of awareness it brought to people, which triggered everybody to think of more and better ways of doing many new things. On the same hand, the media is an all powerful force to a scary extent in any democratic system, because it carries the capabilities to radically shift and influence the thinking of people, which can have severe repercussions in the very next elections. Thus, it is imperative to disperse right and unbiased information through right and unbiased channels to have most effective communication.

Role of society

The only way to do this and to avoid all biases and information hiding is to have the people themselves constitute the media. The media, in the sense in which everybody talks about it right now, then just becomes a facilitating infrastructure for propagating the content. The content itself is what the people think. In the words of Marshall McLuhan, the medium is the message because the medium is constituted by the people, and the message (or the content) is also supplied by the same people. The idea is to bring together media and society. Let's see what this means and what it needs.

Talking of content, the relevant kind of information is about awareness of the past performance records of politicians, knowledge of the infrastructure for roads/schools/power/hospitals needed by the people, and the status of development activities initiated by the politicians. Such content is singularly absent from the media today. A first step has been taken by my seniors from IIT Kanpur who recently started a company called Viplav Communications. Viplav reaches out to the people, listens to them, and communicates their issues to the representatives. For the representatives, they let them know what people want them to do, and help them in making future plans for the constituency. Although they are currently looking at this from the latter point of view, that is, acting as a management consultancy for the politicians and political parties, but their long term goal is exactly what was mentioned. That is, to help people themselves closely monitor the performance of their elected representatives, and to convey their requirements to the representatives. The same vision is also partially entertained by President Kalam. The challenge lies in how to bring people together to do this, which is what I mean by merging the concepts of media and society.

However, meeting this challenge is not easy at all, and I do not have one single answer to it. All that I will try to do is to point out various ways in which this can be facilitated.

Urban India

Even if we just talk about the educated urban class, it is clear that magazines, articles, and news reports are just an incomplete answer unless the people themselves read them and write or supply more information for them. This is closely related to the idea of a global brain idea which I talk briefly in another post. Although the societal change necessary for this is coming about slowly as I wrote in my previous article, I will write more on how and why the history and civics curriculum taught in high school needs to be revised to make youngsters aware of their responsibilities from day one and be an integral part of the process.

Rural India

Talking about extending this to people in the rural areas, the problem is much more difficult because firstly the the right kind of an infrastructure and environment should be built to somehow bring the people together and inform each other of the realities, and secondly, economic sustainance of this infrastructure becomes an additional issue. The Viplav solution of making political parties their clients is good but not exaustive because it relies on the clients themselves to support the very same infrastructure that monitors them! Due to this, the solution raises issues of the clients restricting access to the information and its dissemination. Furthermore, the solution cannot be scaled nationwide unless everybody adopts it.

Talking of this rural infrastructure necessary to share information, especially in the rural areas, I strongly agree with the vision of Kentaro Toyama from Microsoft Research Bangalore, Ashok Jhunjhunwala from the TeNeT group of IIT Madras, the ITC e-Choupals, and Drishtee. Their idea of a village kiosk was inspired by the PCO revolution spear headed by Sam Pitroda. Currently there are over 1 million PCOs in India, and the reason for the PCO success lies in having created a sustainable business model. Each PCO owner got a marginal share of money for phone calls made from his booth, which gave him the incentive to maintain the PCO properly, and led to the creation of a nationwide telecommunication infrastructure now used by over 300 million people of India. The role that communication can play in development is so ridiculously huge that it is not even debatable to the tiniest extent.

The village kiosk is similar to a PCO; however, it will serve as not just a telephone hub and Internet cafe, but as a community center for children, women, and men alike. Coupled with a library and encyclopaedia CDs, it will be a small education center for children, and a best-practices resource for farmers to select fertilizers and watering levels based on the temperature. Farmers will also be able to access the latest weather information and market prices for their produce. For those who do not know how to operate computers themselves, the kiosk owner or other educated farmers can help them understand the information. The kiosks will carry portable blood testing devices that are small enough like handhelds and can detect most pathogens in the blood. Medical advise can be sought by placing a VoIP call to a nearby doctor. Video conferencing can be used to do eye testing remotely or to seek aid for treatment of wounds or anything requiring urgent medical attention. The kiosks will also serve as e-governance centers for filing taxes and negotiating land records. Any automation in the bureaucratic process will reduce corruption and streamline the system as well. Maybe they can even serve as day care centers with the women of the villages coming together around these kiosks. And lastly, the kiosks will also be the centers for information exchange, somewhat like the Panchayats in villages. Such kiosks will be run by local entrepreneurs who will get a share of the revenue generated through the various services offered by the kiosk. Amazingly, there is no derth of entrepreneural talent in India who are also socially motivated and want to make a difference. Since the infrastructural resources are already available, the people are willing, and the purposes are many, surely we will see such village kiosks blossoming all over the country very soon.

My vision is to grow these village kiosks into centers of political awakening to bring people into the mainstream of democracy through tools like those of Viplav. Both of them are very small first steps towards bringing about a social change in the entire community. People will be able to report information, activities, incidents, and requirements in their areas, and get back status and development updates which they can share with other villagers through the community created by the village kiosks. And best of all, these kiosks will be self sustainable as well!


All of this is tough no doubt, but it is doable. It is about bringing information to the people, bringing people to the information, getting them to think, and getting them to realize their responsibilities towards the nation. This change cannot occur overnight, but it can be initiated overnight for sure. The initiation is through your own hearts and minds, to understand what is missing, and take a determined step towards the belief of a better land, and to learn to dream.

Wednesday, December 14, 2005

Flying doctors to the rescue

It started off with doctors airlifting patients requiring urgent medical attention to their base at the Maralal Hospital in the heart of Kenya, and now the doctors actually fly to the villages to offer medical aid. Temporary huts are provided to house family members of the patients, and the method has become popular to provide aid to Kenyans in far flung parts of the country away from any medical facilities. Look at the slideshow link from the page. The concept is even catching up in India, but it seems to be restricted to the urban population so far.

A related article is about the extensive brain drain that occurs from developing countries. Young doctors take the training and then relocate to other parts of world, leaving the countries that require most medical attention without any. The link.

And here's how China solved the problem. Mao Zedong set up a program to send skilled doctors and nurses into the heartlands of China to provide healthcare to the peasants, and the program is still functional. The link.

Drumstick cultivation in drought prone areas

Babasaheb Marale has developed techniques to cultivate drumsticks with the minimum amount of irrigation. Can such techniques be the answer to hunger and poverty eradication in drought ridden areas of the world?

Point-of-care diagnostic system

It's a portable pathology lab, small enough like a handheld computer, that can conduct blood tests and other analysis without the need of a doctor! Imagine placing such units in PCOs or kiosks in villages where there are no doctors, but the phone or kiosk operator can simply dial in to the nearest doctor and report the analysis remotely.