A casual glance in to ones wallet and one would wonder where the 50 Paisa and 1 Rupee coins have disappeared. These once ubiquitous coins in the wallets, have today somehow slowly, but definitely, seem to have gotten lost amongst the bunch of bigger, yet lighter currencies, and plastic monies stuffed in their place. Is this any indication that one has graduated from transacting in such smaller currencies? Or is it just that these currencies are much less than their metal value owing to inflation and hence are  economically meaningless?

There is no doubt that there are many gradations of response one could get to these questions. Those 85% of the country's population, who have been just lucky to have gotten their foot on the first rung of development ladder, still transact in these denominations -whether it is buying confectionery, biscuits, shampoo sachet or gutka. However, for those in the higher rungs of the economic growth it is probably deemed shameful to transact in any non-plastic currency let alone such lowly denominations. I might be here accused of discounting those who still keep a bunch of these coins only to fling them occasionally at beggars crowding their cars in the traffic lights, probably not knowing that traffic department in their city has issued a notice forbidding motorists to give to beggars. But, is this act of charity inspired because their hearts are touched by the deprivation in a world of plenty or because they believe in superstitious cleansing of their sins?  

For now, the more important question is what about those poorest of poor in constant hunger and illness fighting for survival every moment? How would Farida Bibi, a landless woman with three-children who dream of food all the time, look at the same one rupee coin? Could the one rupee have saved the 12-year old Kolkatta girl? How would, who died of starvation in Rajasthan, have seen the same currency? Would the skeletal figures lying listlessly, who knew that that death could only be postponed by a few hours with the little food that this could probably buy, glow at the sight of this currency?

However, the same one rupee has been attracting the attention of marketers from financial services to FMCG to telecom to even matrimonial services, to bridge an untapped market. While the effort from the businesses such as HLL in serving the "consumption" class of the poor is commendable, the question is whether this unidimensional approach any enough? What about those who are chronically hungry and lack access to basic amenities and who have never had a purchasing power of any kind? Can the corporates afford to turn a blind to these who struggle to get a foot on the first rung of development ladder?

~ Santosh


Today if one talks of a government school and latest fancy gadgets in the same breath, s/he is best greeted with a scoff, for when one thinks of a typical state-run school, especially in a shanty town or a remote village, s/he does not fail to see the vivid picture of a compound wall shorn of paint, with pigs, dogs and cattle whining their way amidst the scattered garbage to the classrooms, while a bunch of barefoot children squat and slog on the floor, with their bony ankles painfully rubbing against the coarse floor, and pretend to be attentive amidst crumbling buildings with impalpable roofs, windows and blackboards. So who is to blame if  "cutting-edge-technology"  in schools that even lack basic amenities seems satirical so say the least?

While the deplorable state of state-run schools is not to change in the foreseeable future, one must be warned that a hi-tech gadget attached to the school buildings is not a pipe dream. Could you have imagined that under a pilot initiative 680 primary schools in Gujarat and 400 schools in Punjab are today equipped with fingerprint biometric systems for registering attendance? While Gujarat plans to scale it up to 40,000 schools, Rajasthan is floating tenders for the biometrics. At the outset this may seem either nonsensical or a potential massive scam. One might ponder as to what on earth prompted such a move when the best of the private schools in the country don't have such latest systems and still rely on age-old attendance being marked in a registry. But hold on, for this seems to be no short of a well thought out plan to deal with the vexatious school students and teachers.

The potential of a machine that can read finger impressions for not only monitoring but managing school and teacher data seems to have been finally realized. The need for monitoring enrollment, retention and dropout data at school level cannot be emphasized enough in the context of universalization of primary education. Even the seemingly small aberrations in these indicators at a school level has serious repercussions at the national aggregate level given the mandate to meet the MDG goals. So, the pressure at a school administration level to maintain a close to average academic credentials is reasonable. But more often than not this burden and worry obligates one to resort to unwelcome practices. 

Recently, a news daily reported instances of school administration fudging attendance registries to cover up falling attendance rate. When the school knows that the statistics, such as enrollment and attendance rates, have implications on the amount of resources allocated - whether money, infrastructure, teachers or mid-day meals - the administrators crumbling under pressure resort to fudging a few numbers to maximize the share. This cannot be dismissed as a one-off situation. 

Worrying trends show that teachers in state-run schools allow children to come to schools only at meal time, after which they are let off from attending classes, just to show higher authorities that they are handling big classes. While there are cases where the same child appears as a student in more than one school and sometimes in more than in one class in the same school, there are also reported cases where the poor battles with bureaucracy seeking a certificate of non-attendance just so that the child can seek admission to a Bridge Course camp. In fact, it has been found that names of girls who have attained puberty, are found neither in attendance registers nor on the out-of-school children list.

In the wake of such citing, one wonders whether the resources allocated to schools, especially for mid-deal meal schemes, are misappropriated. A rough, back of the envelope calculation gives a glimpse of the potential quantum of misappropriation. Today the estimated expenditure on mid-deal meal scheme, which includes the conversion cost, is Rs. 3 per child per day. So, for the estimated 150 million children enrolled in government primary and secondary schools across the country, even if just 1% attendance is distorted, then over 200 days, the misappropriation would aggregate to a whooping Rs. 90 crores annually!

There is no question that such falsifying of data at school level is a gross violation that has serious consequences at the national level. The absolutely necessity to create structures and processes that encourage the teachers and ensure the school administrators to give correct information cannot be emphasized enough. But, the question is whether hi-tech solutions such as the proposed "Fingerprint Biometric School Attendance System" the holy-grail?

~ Santosh


When Shubra Singh, State Project Commissioner for Rajasthan, made a grave appeal to the REI partners to help the government in setting up toilets, by sponsoring capital and/or operational costs, in the government schools, I was baffled. I wondered if she had gone berserk in bringing up apparently inapt  topic in an ICT forum. As one would expect almost all partners gave their nod with a scoff that was best left to interpretation. I must admit that I was one among those who gracefully ignored the request for I presumed it hardly concerned me , let alone my company. I now realize that I grossly belittled the gravity of the issue that she was attempting to address.I'm ashamed for my blissful ignorance and apathy.

Recently, as I was trying to gain a deeper understanding of reasons for dropouts in primary and secondary schools, I came across shocking observations, both anecdotal and statistical, that trace one of the primary reasons for girl dropouts to lack of toilets in schools. A recent report claims that more than 3 in every 5 schools, which is about 620,000 schools, don't have toilets. The report also found that boys and girls share toilets in every second school at the elementary stage. Let us not even venture into usable condition of the toilets where it exists and add to the already dismal state of infrastructure. At the outset, UNICEF study's claim that sanitation is closely linked to female literacy in India might sound absurd especially given that over 90% of rural people defecate in the open. The bizarre linkage only unfolds when one listens to an 11-year-old girl's woe - "I was always first in the class. I'm very much interested in studies. I want to become a lawyer. But my mother stopped me from going to school after Class V as the middle school I was attending, 5 km from my house, had no toilet. Can someone help me?".

One can hardly dismiss this as one off and an inconsequential case when one realizes that these sentiments are shared by many a girls facing the onset of puberty, and with it the realities of menstruation in a school with no toilet and no hope of privacy other than the shadow of a bush. The impact becomes more substantial given that in rural communities, menstruation itself is so taboo that girls are prohibited from cooking or even banished during their periods. The problems that accompany maturity, like sexual harassment by male teachers and parental pressure to marry, only aggravates the pressure to drop-out.

While buying the case for toilets, one might question how realistic it is to expect a school to have a toilet when more than 700 million people don't have a toilets in their households. But  in a country where 700,000 children die every year due to diarrhea and dehydration caused by poor hygiene, can we choose to ignore? Is this an insurmountable challenge or is it just a lack of political-will? Dr. Bindeshwar Pathak, who has successfully championed the cause of sanitation, has responded to this call by constructing more than 6000 toilets through his Sulabh Shauchalaya. What is even more commendable is his design of toilets that can be constructed at as little as 500 Rupees. He has also shown that the waste can be recycled to make gas, electricity and manure. If there are toilets that can be built at such affordable cost, why isn't the government or community taking it up for its schools?

It is incomprehensible to learn that government is still expending money on designing "ideal" toilets on paper. Is the government showing indifference in warning its tourists, on its official "Incredible India" website,  to not venture into public toilet facilities? I'm sometimes dumbstruck on how the same government which can afford a computer lab in a school at an exorbitant price, be not able to fund for a toilet. Is it because even at a higher cost the socio-economic impact of a computer in a school is much more than that of a toilet? Or can the corporates simply be blamed for coaxing the government to put an ICT solution in place of toilets? Is the government dumb or the corporate a con-man? Probably for a young woman in an Indian village who wrote a letter to her husband  "When you come home, do not bring ornaments for me. I would be more pleased if you bring money so we can build a toilet in the house.", a "personal" computer would hardly be the need of the hour.

~ Santosh


Sometimes certain images linger in your minds even long after they  have beamed in your eyes. I'm not referring to those typical snapshots-in-time images, but those prudent camouflages of harsh truths that seem to have been lost somewhere in eternity. Seizing such moments, which convey much more than what is portrayed, and which evoke emotions and kindles many a thoughts, takes much more than mere talent.; it calls upon a rare combination of passion, creativity and relentless pursuit. To render such a perfect recipe in the very first attempt deserves nothing short of a standing ovation.

Well, kudos to Aamir Khan on his commendable effort for conveying a thought-provoking message and creating awareness on Dyslexia through his directorial debut "Taare Zameen Par"! Last such widely acclaimed movie which portrayed such similar powerful message was in my opinion "Philadelphia" released in 1993, almost more than a decade into the HIV/AIDS epidemic. While there has not been any dearth of movies with a social message, it is only of late that such serious and somber movies as the Al Gore's "An Inconvenient Truth" have shown scattered proofs of movies' capability of inciting some sensitivity, if not a lasting social change, in a subtle and subterranean way. It is not easy to pick on a artsy movie with a message subject such as the side-tracked Dyslexia and weave it into a simple yet a powerful narrative.

Though an estimated 30 million children, which is about 10% of children in regular classroom, are known to be Dyslexic in India, not many are aware, let alone be sensitive, to this learning and attention disorder. What is worse and painful is the shunning of these Dyslexics as mentally disabled - leading the child to feel dumb and isolated. Who could possible imagine that - Einstein, EdisonDa Vinci - who were once pushed-aside, ridiculed and stigmatized in childhood, would become rare creative geniuses to shape the world through their contributions!

A recent study that traces business acumen to Dyslexia, claims that Dyslexics make for fine entrepreneurs as they were more likely than "normal" counterparts to delegate authority, to excel in oral communication and problem solving, and were twice as likely to own two or more businesses. Charles Schwab of the Investment and Financial Management Service by same name and John Chambers of Cisco are a few of many such successful top notch businessmen. Richard Branson, one of the all-time finest businessmen, once admitted in an interview "I had the worst school report ever. They thought I was a hopeless case because I'm dyslexic, although no-one had heard of it in those days. I was always bottom of the class and I left school at 15...".

Well, in a high-pressure society such as India, where scoring A grades and being in the 95+ percentile count for so much, Dyslexia still carries a heavy penalty. One wonders how our educational system would have possibly graded the likes of Einsteins based on its "long-established" assessment methodology! I hope the movie, which couldn't have been better timed and contextualized, is an eye-opener to all those parents who think that the hurdles are insurmountable.

~ Santosh


Drawing upon the Forbes list of most influential individuals, one article in the latest Economic & Political Weekly questions the merits and sphere of influence of these individuals. While raising a valid point that such lists primarily serve the purpose of liasoning individuals from an already established hierarchical structure, the author takes it to extreme in demeriting the influence that such a list has on the society. The article argues that the influence one exerts should be de-linked from the organization that he/she is associated with and that personal influences per se should be measured instead. While this is true to a certain extent, the author seems to seriously downplay the profound influence, both direct and indirect, that iconic symbols such as Indira Nooyi, in her capacity as CEO of Pepsi, if not as an individual, exert in the country's social space.

In a country where women have been facing increasingly violent forms of gender bias, there have been continual attempts to restructure the balance of power between the sexes not just at workplace or at home but in society and in politics. While feminist moments, which have been termed by a leading Indian magazine as one of the 60 revolutions that has shaped India, have had profound influence in making voices of women strong and loud, even symbolism such as an Indian woman making it to the top of business world has done its wee bit in bringing men and women on equal footing.

When we look at the magnitude of the gap between men and women in four critical areas - economic participation and opportunity, political empowerment, educational attainment, health and survival - it is disheartening to know that as per the latest World Economic Forum report, India poorly ranks at 114 in a list of 128 countries. Looking at statistics that claim that proportion of self-employed women as percentage of total workforce is little more than 60%, one might mistakingly associate this to entrepreneurial zeal of women, when the truth of the matter is that regular employment opportunities  for women remain next to negligible. It is startling to know that only 18% of people employed in the organized sector are women. 

In a country that lags astronomically far behind with respect to achieving Millennium Developmental Goal  of Gender parity, even such small feats as Indira Nooyi and Sonia Gandhi being ranked as 4th and 13th most powerful women in the world, is a really big deal! Is it worthy to crib if Nooyi has not proactively done much to empower women?

~ Santosh






I wasn't expecting a grandeur and spic-n-span office premises when I was asked to attend "ICT Partners Meet" at Shiksha Sankul in the pink city of Jaipur. Neither was I expecting a state-of-the art conference room with a neat welcome kit - session details, handouts of all the presentations, stationery items and bottled water - on each participant's table. As though the shock wasn't enough, I was left embarrassed when I conveniently entered the meeting room fifteen minutes late assuming that with government officials involved, the meeting couldn't possibly start earlier than half-hour past the scheduled time.

With Shubra Singh's (State Projects Commissioner, Rajasthan)  welcome note, the stage was set perfect for the quarterly Rajasthan Education Initative's  (REI) partners meet. I was blown away by the bureaucrat's impressive mannerism and her near-perfect articulation of the expectations from the meeting. With representatives from the corporate world - CII, Intel, Microsoft, Cisco and IBM - and development organizations such as World Economic Forum, GeSCI and UNICEF, I presumed the stage couldn't have been set more perfect for a landmark public-private partnership. It was only in the meeting that I realized that the REI is one the among only three public-private partnership in education across the world, the other two being education initiatives in Jordan and Egypt.

However as the discussion progressed, the ground realities of this project unearthed. It is disquieting to know that though this initiative has been in existence for two years, there is still no dedicated project management unit to overlook the initiative. Even though this initiative boasts of high-profile core partners such as WEF, GeSCI and CII, it is incomprehensible that it was only in this meeting that it dawned upon everyone that drawing a road map for the initiative would make sense. I wonder whether this is the kind of professional maturity that such organizations bring elsewhere too. I wonder how learnings from Jordan and Egypt's initiatives seemed a far-fetched idea to the core partners.

The co-partners, which incidentally includes HiWEL, seemed to be keen in advancing ones own agenda and were primarily concerned about raising issues of how government inadequacies and bureaucratic processes were delaying ones projects. Many, including me, who were attending this kind of meeting for the first time, didn't know the proceedings of any of the previous meetings. To ones wonderment, none of the private players were aware of any of the others' initiatives. There were only a few ad hoc suggestions made in the air for exploring possible synergies. What was glaring was that there was an evident discord between the co-partner's core competencies and the projects they had taken up as part of their CSR activities. I fail to appreciate why Cisco was involved in PC maintenance training, while Intel and Microsoft were  conducting teacher trainings.  

It was incognizable as to how this initiative could remotely be called a Public-Private-Partnership (PPP). There was neither a perceivable professionalism in strategic planning nor any operational efficiencies that the private partners brought to the table. Though there was no dearth of earnest concerns about  the pathetic educational scenario of the state, all of the players seem to suggest the same old traditional philanthropic route to reforms. The government on the other hand, let alone make an attempt to benchmark itself against other states, was not even cognizant of best practices from other states. Even after two years of existence, it does not seem to realize that it is indeed reinventing the wheels.

There is no doubt that the enormity and complexity of the education in the country demands much more than a sheer lip service from private players. Nobel Laurette Amartya Sen recently called for synergy between industry and teaching community (Read more here). However, until the time public's concern and private player's competency match and converge, such initiatives can be best relegated as another one of those Poor-Public-Private-Partnerships (PPPP).

~ Santosh


"This is the true joy in life - the being used for a purpose recognized by yourself as a mighty one." - George Bernard Shaw

Of late the print media seem to cover quite a few columns on entrepreneurship. Yesterday's ET has two big columns on this subject - one showcasing three entrepreneurs who dared to not follow the typical B-school crowd mentality, and the other attempting to explore a seemingly ridiculous question on whether one can be taught to become an entrepreneur. This debate cannot be dismissed as a purely academic one for if entrepreneurship can be learnt as a discipline, then it is bound to change the whole paradigm of business.

Today, there is enough literature that identifies typical attributes of an entrepreneur. In fact there are psychometric tests, such as Entrepreneurial Attributes Scale, that could be used to identify whether one has successful entrepreneurial attributes -  high level of drive and energy, self confidence, calculated-risk taking ability, readiness to learn from ones own mistakes and ability to visualize way-ahead. Now the question is whether these attributes can be imbibed in. Or can we categorically say that someone is born with these traits? If these attributes can be taught as a formulas, then is a B-School the right place? Is it not too late to learn these attributes, most of which are soft skills?

On one end of the spectrum, plethora of theories and evidences have been put forth that essentially says that it is absurd to expect to learn being an entrepreneur. However, in citing world's most successful entrepreneurs such as Bill Gates and Steve Jobs, and Indian success stories of Ambani or Dabbawalas, the argument falls into the trap of "Fallacy of biased sample" or what in psychology is termed as a "Confirmation bias".

The most repulsive argument comes when one cites numerous entrepreneurs who have emerged in the developing countries owing to the availability of capital through micro-credit. This calls for a more comprehensive review of two kinds of entrepreneurship - "Necessity based" and "Opportunity based". Are the self-employed bunch essentially entrepreneurs? If so, are the millions of Indians, unlike in the west, born entrepreneurs and hence don't need to be taught the same in a school setting?

Well, while much needs to be researched on teaching this discipline at MBA level, it might be worth noting that occasionally even best of the B-schools might falter and produce people of the George W Bush's (Harvard'75) caliber! Do we draw any conclusions from the Fortune magazine's 1999 article on "Why CEOs fail?" that states that 40% of failed CEOs were MBAs?

For now, time shall speak if like in Science, someday we have Newton's laws of entrepreneurship. Can schools impart confidence if not competence for budding entrepreneurs?

~ Santosh


(..continued from previous post)

The morning discussion on "Rural markets and Entrepreneurship opportunities" had an interesting mix of panelists - one from corporate sector, two social venture captialists, an entrepreneur and a village panchayat head. While Sanjay Kapoor from Bharti made a marketing pitch of how Airtel sees a huge business opportunity in rural, Elango Rangaswamy, who has been heading the Kuthambakkam Village Panchayat, posed a question on why most corporates look at rural as a pure consuming class and not look at ways to increase the dispoable income of the families. As a true Gandhian, Elango spoke very passionately about his community and how his institution has been trying to do its wee bit on the developmental front. From his humble attire and not-so-well- polished speaking style, one cannot possibly make out that he is an IITian who quit the mainstream career options to make a difference to his village (Click here to read more). Not sure if one Kuthambakkam amongst 265,000 Gram Panchayats in the country can be viewed as glass half-full. 

Later Aavishkar Venture Management co-founder Vineet Rai spoke on how they have partnered with Elango's Panchayat on one of their projects to manufacture burners. Now that the demand for the burners couldn't be serviced from the village alone, owing to its production limitations, the firm was looking for other communities that it could partner with. 

All in all, though the panel did manage to throw some interesting tit-bits, it failed to focus on the theme of entrepreneurial opportunities in the rural market. Though the panelists managed to hover around the subject, neither the entrepreneur nor the two social venture capitalists in the panel could bring to light some of the opportunities and challenges of entrepreneurship. It would have been good to hear on some of the entrepreneurial initiatives on ground that the VC firms have funded and how they have created a social impact. Probably, someone from Acumen Funds, Ashoka Foundation or Skoll Foundation would have been more appropriate considering the theme.  

The panel discussion on "Financial Products for Rural Consumers": had a better panel mix - Vijay Mahajan of Basix, Somak Ghosh of Yes Bank, Viral Acharya of LBS, Priya Basu of World Bank and Rajesh Balaraman of Diamond Consulting. Talking about about recent findings (check my earlier post) on missed opportunity in the rural sector, Rajesh spoke about how apart from Product, Cost and Convenience, Eligibility Criteria needed much focus. Many of the rural consumers surveyed lacked financial literacy and preferred borrowing from the money lender owing to huge ambiguity that surrounds the paper work with a formal financial institution.

Priya talked about policy implications and how it would be good to have "Priority Sector Lending" part of a bank's obligation tradeable so that the counterparts more competent in rural banking could do it more efficiently and effectively. Speaking on how from a banking perspective the urban poor was not any different from that of a rural one, Somak Ghosh called for more action from all domestic banks - both public sector and private sector ones.

Taking a tangential view, Vijay Mahajan spoke of how it was not product offerings, but channel that has been a barrier in expanding to the rural market. In his words - "Products is a glib MBA talk. What is needed is one to travel to slums and deliver the product at the poor's footsteps". Speaking of customer friendliness, he cited his experience with a bank in Salempur, which is in the heart of the city, had created such a perceivable barrier for a bank customer, let alone a prospect,  to make any transactions. In a country where one has cumbersome, and in some cases no options, to get a birth certificate as a proof-of-age, it is ridiculous that a formal financial institution mandates this document as prerequisite for opening an account of any kind. He proposed a 3P focus on channel strategy - Place, Process and People.  In his view, STEMS - Single Terminal Enabling Multiple Services - and pre-paid debit cards such as Zipp Interchange, was the key to provide low-cost, yet friendly, banking services to the rural.

In the subsequent key note session, Abhijit Banerjee, Director of Poverty Action Lab at MIT, spoke about primary education and its challenges. His talk was primarily centered on Pratham's ASER report and findings from experiments conducted by MIT. It was sad however that the talk did not dwell on the entrepreneurial opportunities in the sector. More so, not much was spoken about the limitations of a technology in improving the access and quality of education. 

Though the following panel discussion on "Supply chain and Logistics" had dignitaries from Reuteurs, Reliance, HLL and Mahagrapes, it failed to throw any insights into the opportunties and challenges. One interesting thing that came out of the session was RML - Reuters Market Light - a BOP service from Reuters that provides mobile information services to the farmer. It was good to hear some evidences, though anecdotal, on how this information service helped farmers in making better decisions and subsequently in making higher profits.

Overall, the second India Business Forum could be termed informative. However, there was probably a scope for more insightful & quality discussions. The conference seemed to rather just scratch the surface of business opportunities and hurdles in the countryside. It is sad that none of the politicians invited to the panel discussions did not make it, despite this being scheduled on Sunday. I hope such conferences are not an end in itself but a beginning to more fruitful brainstorming, action plans and cross-sector partnerships. I keenly await to see how LBS takes this forward.

~ Santosh 


Who would not want to listen to  the distinguished likes of Nachiket Mor, Dr. Swaminathan Aiyer and Vijay Mahajan, even if it meant  dragging oneself out of bed on the wee hours of Delhi's coldest Sunday morning? I couldn't resist missing the Second Annual India Conference organized by London Business School on the theme "Exploring Business Opportunities in Rural India".  Well, given that it was something to do with rural, I wasn't expecting the gathering to be dressed in the best of business suits. Luckily I was not dressed way out of place. I could manage to hide in the corner and focus on more important things. 

Let me begin with kudos to LBS students for their commendable effort in putting together this conference, especially given that they had to conceive, plan and organize the event sitting in UK. After conducting one such event (Social Responsibility Conclave at ISB), I can imagine and vouch for the amount of efforts that would have gone into this event management. The theme could also have not been more appropriate given the unprecedented interest from all sectors of society in rural economy.

Nachiket Mor was at his usual best in the opening key note setting the stage for subsequent sessions. Though he spoke more from ICICI Foundation's initiatives end, the strategies outlined - strengthening the rural delivery channels and creation of operating business models - seemed relevant to anyone interested in rural business. Touching upon the potential of and risks involved in Microfinance, he compared Grameen model with that of Compartamos (refer to my earlier post). While he was all praise for Grameen model, he cautioned on the commercial model of Compartamos, for in the shareholder's interest, it is virtually impossible to reduce the already exorbitant interest rates charged to the borrower. He said the irrational interest rates that Compartamos could charge was due to the illiquid immature market in Mexico.

He then went on to explain how some of the innovative rural products such as weather insurance which was pioneered along with Basix, as a better alternative to crop insurance, failed for the simple reason that there were not many weather stations close to the farmer's village. In a place where the local weather information was fed from a nearest weather station that was a 100 km away, why would a farmer pay for the premium? The post-analysis showed that in order for this product to make any inroads, a whooping 50,000 additional weather stations were required in the country. Nachiket also made a case for listing India's rainfall index, like that of other countries, in the international market. Moving from the financial products front, he later talked about the need for operating business models such as Fab India and Indonesia's Ramayana stores and networked enterprises such as Rural BPO and Rural tourism in the rural space. 

Taking on questions from the attendees, he mentioned the reason for proliferating ATMs in India. It was interesting to know that though the per transaction cost in a ATM model was much higher than a Teller model for the bank, it was the option that many banks embraced to get around the branch licensing restrictions. He ended his energetic talk on a note that he personally did not believe that market per se was not the panacea for reaching rural poor. 
The next speaker Dr. Swaminathan Aiyer, in a typical journalist kurta, started off saying he was asked to fill in the shoes of Tata Sons' JJ Irani just last night. He wondered why one assumes a journalist, owing to their apparent instant wisdom, is always assumed to be able to talk any topic. What was surprising was he had managed to put in a carefully thought out presentation with  3 relevant preconditions for rural economy to take off - Infrastructure & Connectivity, Capital, and Education and Skills development.

Talking about rurbanization, he went on to explain how due to lack of infrastructural support, an Indian village with 10,000 population was still called rural while an American village with 800 population was considered urban. Tamilnadu, the most urbanized state in the country (44% urban), owes credit to its unparalleled connectivity. He noted from his observation how once he could only cite a couple of tea shops on Delhi-Dehradun roadway when there was no highway. When he recently heard of a 8 crore worth robbery on the same highway, he said, on an albeit lighter note, on how this was indeed a sign of prosperity owing to good connectivity.

He then cited his shocking experience at Dhaka where he was trying to find if microfinance was the panacea to poverty. It is ironical to note that all the recipients of the microfinance were better-off, but in larger picture, the village was not any better-off. There were only limited entrepreneurial opportunities that were viable in a village. Well, it is unrealistic to expect to every microfinance borrower to open a tea shop in the village. He also cited how a woman due to social dis-empowerment has hardly seen a customer and hence cannot think of anything but buying a buffalo, in some cases goats, for livelihood. He ended stressing on the need for expanding the total available business space in the rural India.  

The syntactical oversights ('manks' in the place of 'banks') on and plain template of his Powerpoint presentation was evidence of how short a notice he was given to address the gathering. Anyways, who would complain after such an informational talk that drew lessons from his personal experiences. After all 'Swaminomics' would not have carved a niche and emerged from no where!

To be continued.. (check next post)

~ Santosh


How many times have you been harassed by telemarketing calls at the weirdest of hours asking you if you need a home loan or a credit card? What is so impalpable is how they manage to call you at the most inconvenient time and offer you the most irksome basket of products/services that you hardly perceive as needed. Sometimes one needs to try out the Sienfeld way of responding to these irritant pricks. For me, I have just entered all my contact numbers that I'm even remotely linked to in the National Do Not Call Registry. Hopefully, I don't get bombarded with a series of calls from the service-provider's staff confirming whether I really meant to not be contacted when I opted for this option.

While one learns to patiently deal with these inevitable calls, it is ironical to note that that these marketed services never reach those who are in dire need of them. If we take the banking services in particular, it is shocking to note that the second fastest growing economy in the world has about 240 million unbanked adults as per the reports. Rural lending to total bank lending has shown a steady decline since 1990s. The skewed outreach of our banks becomes evident when one looks at statistics that show that with a mere 19% rural penetration, only 30% of the deposit accounts are in rural areas. What is worse is, where these services are accessible, the poverty penalty is as high as 10%. 

While we acknowledge that there are a number of grassroot changes, such as microfinance, taking place in the countryside, the fundamental question that needs answer is are the rural poor indeed unbankable? To put it the right way, as Nobel Laurette Muhummad Yunus says - "It is not people who are not credit-worthy. It's banks that aren't people worthy". Are the grassroot revolutions, microfinance in particular, a viable solution to poverty - a problem which humiliates and denigrates everything that a human being stands for?

(More on rural banking, agriculture lending and ebanking in the coming posts)

~ Santosh


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