Category: Deeshaa (Rural Development)

Hindustan Times profiled my colleague, Atanu Dey, recently:

Economic development is a cause and consequence of urbanisation. The urbanisation of 700 million people of rural India through migration to the cities is impossible, and so is the urbanisation of 600,000 villages where they live. RISC attempts to urbanise the rural population and do so without the insanity of keeping them confined to tiny villages.

RISC involves the creation of rural hubs across India, each catering to a population of about 100 villages, so that the hub is no more than a bicycle-commute away for people in the villages. The hubs will have state-of-the-art infrastructure including 247 electricity, broadband connectivity, security and sanitation. Sound like a tall order? Maybe, but according to Dey it is achievable.

And how does Dey contribute at this point? From the sound of it, a lot of spade work. Strategic business consulting, talking to companies in the private as well public sector, talking to people in the ministry of Information Technology, evangelising… he rattles off. And then of course, there is the School-in-a-box project Deys attempt at reinventing the educational system.

NextBillion.net writes:

Wireless networks have become the technology of choice for increasing access to phone and Internet services in developing countries. As we detail in our new report, A New Model for Rural Connectivity, they are not only cheaper, easier and faster to deploy than traditional landline alternatives, but also make possible business and service delivery models better adapted to rural, low income communities.

As Wi-Fi and WiMAX technologies enable the rapid expansion of telecommunications into rural developing areas, the market for Wi-Fi equipment will grow significantly. The resulting volumes will drive prices even lower, enabling many customers at the “base of the pyramid” to enjoy the benefits of mobile services for the first time.

WSJ profiles SKS Microfinance:

Vikram Akula runs a company that doles out loans of $100 or less to desperately poor villagers so they can buy a water buffalo or a bicycle. But he’s hardly a typical do-gooder.

Mr. Akula, the 37-year-old founder of SKS Microfinance Pvt. Ltd., is at the forefront of the latest trend in “microlending,” or making tiny loans that help entrepreneurs lift themselves up from the lowest rungs of poverty. Long the province of charitable institutions, microlending is starting to attract the attention of big business. Intrigued by India’s red-hot economy and potential market of more than a billion consumers, financial giants such as Citigroup Inc., ABN Amro Holding NV and HSBC Holdings PLC have already provided millions of dollars for SKS to lend out. SKS, in turn, says it has notched up healthy profits for the past three years.

Atanu Dey writes:

People do gain net benefits from investing in education, and so does society at large. In our case, we who are fortunate enough to be surfing the web and reading blogs, we have the money to invest in education or we have been privileged enough to get subsidized education, and are reaping the benefits of that education. But unlike us, the poor are credit constrained. They too would privately benefit from investing in education, and society too will benefit from having them being educated, but as it happens, the poor cannot afford to make that investment.

The way forward is straightforward: give loans to people so that they will invest in education.

[via The Indian Economy Blog] Washington Post writes:

Started in late 2000, Project Shakti has extended Hindustan Lever’s reach into 80,000 of India’s 638,000 villages, on top of about 100,000 served by conventional distribution methods, according to Dalip Sehgal, the company’s director of new ventures. The project accounts for nearly 15 percent of rural sales. The women typically earn between $16 and $22 per month, often doubling their household income, and tend to use the extra money to educate their children.
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Hindustan Lever is not alone in recognizing the vast potential for profits in rural India. As urban markets become saturated, more businesses are retooling their marketing strategies, and in many cases their products, to target rural consumers with tiny incomes but rising aspirations fueled by the media and other forces, according to experts.
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“In four to five years the rural market will be a major sector that is well beyond anyone’s imagination,” said Rajesh Shukla, principal economist for the National Council of Applied Economic Research in New Delhi. “Nobody was expecting this was going to happen.”

The Economist writes: “Iqbal Quadir pioneered wider access to mobile phones in Bangladesh. Can he do the same for electricity and clean water?”

The aim of his new venture, Emergence Energy, is to establish small, neighbourhood power plants in Bangladesh that can provide electricity to a handful of homes, shops and businesses. This time he has teamed up with Dean Kamen, an American inventor best known for creating the Segway electric scooter. During 2005 they conducted a six-month trial in two rural villages in Bangladesh of prototype generators, created by Mr Kamen, based on a design called a Stirling engine.
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At the same time, Mr Quadir is pursuing two other bottom-up initiatives. The first, CleanWater, is dedicated to supplying safe drinking water to Bangladeshi villages, where arsenic contamination is a grave problem. Rather than relying on aid agencies or governments to install equipment, Mr Quadir hopes to license a chemical preparation that can remove arsenic from water and make it safe to drink.

Sramana Mitra writes about n-Logue (in which I am an investor and on the Board):

India is a complex market, but in rural India, the complexity escalates significantly. And yet, imagine the power that a company would command having cracked the rural India communication / information market?

n-Logue is a contender for such power.

n-Logues business model has been inspired by the success of long distance Public Call Offices (PCO) model and the Cable TV Operator model in India. The 950,000 PCOs, which are roadside booths offering telephony services, account for about 25% of the total fixed line telephony income in India. The success of these ventures proved that demand aggregation, a basket of services approach and local entrepreneurship could combine to make a rural internet cum telephony kiosk operationally viable. These principles are the foundations of n-Logues approach.

From Atanu Dey’s blog:

I say what India needs is an ownership society. The rest of this talk about empowering this that or the other is meaningless without the fundamental notion of ownership. Empowering villagers with knowledge, as the good Dr prescribes, will not have any effect until there is ownership. Remarkable results follow once you identify the problem as not one that is centered on power but on ownership.

Then CJ proceeded to explain what he meant by the ownership society, how to bring it about, and what will be the effects of that transformation if we are ever able to achieve it.

Power without accountability is at the core of many of Indias problems. In a feudal society, the feudal lord has power but is not accountable to the serfs. He can arbitrarily make laws and do what he pleases. At a higher level of organization, in a kingdom, the king has all the power and again no accountability. At its peak, it is imperialism when the entire country is ruled by colonial decree but the rulers are not accountable. After centuries of feudal rule, followed by centuries of foreign invasions, and culminating in the British colonial rule of about 90 years, the habit of power without accountability has been firmly ingrained in the Indian governing psyche.

The Economist writes in a survey:

What makes microfinance such an appealing idea is that it offers hope to many poor people of improving their own situations through their own efforts, says Stanley Fischer, former chief economist of the World Bank and now governor of the Bank of Israel. That marks it out from other anti-poverty policies, such as international aid and debt forgiveness, which are essentially top-down rather than bottom-up and have a decidedly mixed record.
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What is now generating so much hope and excitement is less the discovery of some entirely new way to deliver financial services to the poor than the effect of the rapid innovation that has taken place in the past three decades.

International Herald Tribune writes:

A new prosperity is sprouting in rural India, with tens of millions entering the pressure-cooker-and-television-owning class and tens of thousands becoming sippers of Scotch, owners of premium tractors and drivers of multiple sedans.

The opening of this new frontier of consumer demand from 700 million people could tip India’s role in the global economy from seller to buyer, from a vendor of outsourced skills to a source of consumers for the world’s wares. Multinational corporations, from Coca-Cola to Nokia, appear increasingly keen to understand Indian villagers.
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In 1990, for every $100 earned by an Indian villager, an urbanite made $82 more. Today, the difference has dropped to $56.

Yet the new rural riches are far from ending poverty. In India, 390 million people still live on $1 a day or less.

What is changing is the nature of the rich-poor divide. That divide was once synonymous with the urban-rural split. The only way to get rich was to live in town, and to reside in the country was to be bound to interminable poverty.