Out Look Business 05052008

ANNIVERSARY ISSUE
20 APR-3 MAY 2008

www.outlookbusiness.com
25
IDEAS
THAT
WILL
CHANGE
OUR
WORLD
Insights: Kishore Biyani, YC Deveshwar, Corinne Figueredo, Sunil Mittal,

Shiv Nadar, CK Prahalad and Raman Roy
www.outlookbusiness.com
May 3, 2008
VOLUME 3
ISSUE 9
IN THIS ISSUE
The Pull Of An
IDEA
As we begin our third year, we look at

25 disparate ideas that have the
potential to transform the
lives of millions of Indians
10
FEATURES
16 Chindia
This century, the US and EU will have to make
way for China and India. Together, the Asian
powerhouses can dominate the world economy
24 The $3,000 Car

From mobility to frugal engineering, from
infrastructure building to transport policy...
28 Rice Intensification System

A method of rice cultivation that can double
rice yieldsthat too at lower costs
32 Smart Cards
Rural Indias knight in plastic armour will
improve delivery of government schemes,
eliminate middlemen, and ensure the poor also
benefit from advances in technology
38 Aerotropolis
In many towns, the airport will be the hub
around which sub-cities will come up
40 Rs 5 Lakh House
Affordable housing on the periphery of cities
for low-income folks is fast becoming a reality
46 Rural BPOs
Companies cut costs; villagers dont have to
leave the comfort of home for work
50 Piped Gas Ecosystem

Soon, youll just need to turn a knob to get gas
in your kitchenstraight from the basins
62 Micro-pension Schemes
Finally, poor workers in the unorganised sector
are getting access to some social security
66 Mobile Wallet
In the near future, technological leaps will see
the mobile phone graduate from being just a
communications device to a payment device
72 Commodities Aggregators
Farmers can now use various models of
aggregation to get better prices for their
produce. They can also hedge their price risk
IN THIS ISSUE
Kishore Biyani
Raman Roy
YC Deveshwar
Sunil Mittal
ILLUSTRATION BY ARINDAM
Corinne
Figueredo
Insight
An idea is a powerful force that can turn the world upside down. We get a
team of leading luminaries from the world of business to dissect this piece
of creativity and show us what it can do. This elite panel of entrepreneurs
and thought leaders take us through the lifecycle of an idea, right from its
genesis to the time it comes to fruition. Along the way we get to know how
an idea is born, developed, funded, executed and scaled up
Shiv Nadar
CK Prahalad
NILOTPAL BARUAH
74 Migration Services
Agencies that help migrants enter urban
economies with protection and with
dignity have begun cropping up
78 Coal to Oil
With oil prices reaching astronomical
levels, this conversion method may be
the only way India can work towards
self-sufficiency in oil
82 Work From Home

India Inc is gradually awakening to the
benefits of letting employees clock
in from home. The best part is: every
stakeholder will benefit into the bargain
access to electricity no longer have to

remain in the dark
88 Other Ideas
122 Ideas That Have
Changed Our Lives
126 Ideas That Failed
128 Accidental Ideas
130 Rewind
84 Solar For Poor
The good, the bad and the ugly. A

snapshot of some of the key issues,
strategies and opportunities we covered
during the year gone by
With solar power, villagers without
ILLUSTRATION & COVER DESIGN: ARINDAM
OutlookBusiness | May 3, 2008
MAIL
w w w. o u t l o o k b u s i n e s s . c o m
Editor-in-Chief: Vinod Mehta

Publisher: Maheshwer Peri
The JLR deal has given

the Tatas nothing but
headaches. Although no
debt will be transferred
to the Indian buyer,
managing the UK plants
will mean a huge dent in
the Tatas pockets. Only
time will tell if the deal is a
profitable one or not.
K VIJAYALAKSHMI
BANGALORE
More Exposure
This is with reference to the
article The Rise And Fall Of
Greenhorn (5 April, 2008). IIT
and engineering graduates
are more in demand these
days. The schools do a good
job of giving them a solid
foundation in theories. But
when it comes to managing
people, they fall short. So,
the only way for engineers
to manage technology with
manpower is for them to opt
for management courses.
be no excuse for the government to be delaying the Bill.

Arun Narayanan, Bangalore
Spread The Wealth

And, finally, sectors other than
IT are getting their due (The
Playground Just Got Bigger).
VCs are playing it safein
fact, hedging their bets. It is
likely that they are expecting
a slowdown or maybe even
a bust in IT, and channeling
their funds into other profitable businesses.
Mahesh Kumar Dadrwal, e-mail
R Vijayanand, Mumbai
Power-Less
Snipping It Off
It is a shame that the FCRA Bill

has not yet seen the light of
day (Toothless Regulator), as
it will give the Forward Markets Commission (FMC) more
power. Obviously, the government doesnt believe in it
and is still sitting on the fence.
The FMC, in that sense, is like
Sebia regulator that should
be given more freedom to
deal with policy hurdles. The
impending elections should
Taking the income tax break

away from IT companies now
would be a huge mistake
(The Taxman Cometh). Now,
when the industry is under a
margin squeeze from an unfavourable currency, retaining
the tax holiday is a good idea.
Otherwise, IT firms will cease
to be major contributors to
the countrys GDPcurrently
5.5%. After all, IT is the face of
India. At the same time, the Fi-
TALK BACK
Email olb@outlookindia.com
Address Editor, Outlook Business
Nafed House [8th floor], Ashram Chowk, ND 110 014, NCR, INDIA
8
nance Ministry would also do

well to cut down the tax exemption limit, instead of doing away with it completely.
Shyam Govil, New Delhi
Lights On
The column by Dr Pachauri,
UMPPs Need Some Oomph (22
March), has come at the right
time. India needs to look at
providing healthy, clean power to all households. In the
telecom domain, the Universal Service Obligation Fund
is created to roll out telecom
services in areas that arent
financially viable otherwise.
Can we push for a similar fund
to light up the lives of 82 million homes?
AV Gopal, Bangalore
Sea Change
Another important factor in
gaining consulting mileage
is brewing a quick adaptation culture among employees (Consult, But Use New
Boatmen). As they deal with
mature businesses, consulting insights will have to be
gathered on the run. This is
where the existing IT project
mindset will have to undergo
a dramatic change.
Krishna Mony, e-mail
Editor: Sonal Sachdev

Editor
Deputy Editor:
Editor M Anand
FEATURES
Senior Editor Ashish Gupta
Associate Editors Nandita Datta,
Sangita Shah, Snigdha Sengupta
Senior Assistant Editor Sudipto Dey
Assistant Editors Anurag Prasad,
Prashant Mahesh, Sebastian PT, Supriya Kurane
Senior Special Correspondent Dhruv Rathi
Special Correspondents Ajita Shashidhar,
Kunal N Talgeri, Sriram Srinivasan, Vishaka Zadoo
Senior Correspondent Himar Arjun Singh
Correspondent Rajiv Bhuva
COPY DESK
Associate Editor Avinash Singh
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Senior Sub-Editors Irene OBrien, Navan Ignatius
Sub-Editor Karthik Krishnan
ART
Art Director Manojit Datta
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Designers Manish Marwah, Sanjit Kumar
Illustrators Arindam Chakraborty
PHOTO
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Senior Photographers Bhupinder Singh, Saptarshi
Biswas, Soumik Kar Photographers Nilotpal
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IDEA
OPENING
ESSAY
and how it is now forcing capitalism to look beyond

wealth creation and towards transformation of lives
M ANAND
APITALISM IS changing.
Cash, the currency of
capitalism and its prime
driver, no longer rules. Today,
successful capitalism is all
about successful ideas. Ideas,
not cash, spawn new businesses. Ideas
help companies grow. Ideas create
wealth. Ideas burn cash and produce
billionaires. But most importantly,
ideas change lives. And ideas build
the nation.
Cash exists, but merely to serve
good ideas. It is just the means to the
end. Often, the wealth that capitalism
creates is a byproduct of the end. It is
no longer the end in itself.
This shift in the balance of power
away from cash and towards the idea,
which has happened gradually over
the last 10 years, is one of the reasons
why capitalism is changing. If cashdriven capitalism was all about creating wealth, ideas-driven capitalism is
about changing lives.
The ideas victory over wealth, and
therefore entrepreneurships ascension
over capitalism is having a profound
impact on business, economy, society
and mankind. That is why Outlook
Business has chosen to celebrate The
Power Of The Idea in its second anniversary issue. These 25 ideas have
been picked on their ability to change
lives, not on their profit-making or
wealth-creation potential.
ILLUSTRATIONS BY ARINDAM
11
IDEA
OPENING
ESSAY
The example that best demonstrates

this point is the $3,000 car (See Page
24). We picked this idea not because
of the Nanos ability to make profits
for Tata Motors (many, in fact, believe
it wont), but because of its promise of
providing an affordable and comfortable personal mobility solution. In this
particular instance, greater common
good has been put above short-term
profit of a private enterprise. Entrepreneurship has risen above capitalism.
Last anniversary, our theme was
The Power of India. The issue you
now have in your hands
our second-anniversary issueis all about the power
of the idea; the power of
Indias ideas, to be more
precise. After all, it is ideas
that are going to build India
this century.
Our second anniversary issue also epitomises the identity of Outlook Business. At
its very core, this magazine
is all about thought leadershipthought or thinking
being the precursor to the
idea. Without thinking,
without thought leadership,
there would be a definite
dearth of good ideas.
Second, though we are a
business magazine, we look
beyond business. Dare we
say that we have led the rest
of the Indian media in its
coverage of corporate social
responsibility and social entrepreneurship. Unlike the
rest of the pack, we are in
step with the new, changing
identity of capitalism. (Sometimes,
it helps to be a fresh, new player in
a jaded market.) This issue has the
proof of concept. A majority of ideas
showcased here are in the realm of
development, governance and the
welfare of society; a few of the ideas
are about creating profit for a private
enterprise, but even there, the benefit
for society at large is significant.
These ideas are not about profit.
Yes, it is entrepreneurship that is driving these ideas, but not capitalism.
Changing lives is the prime motive
behind these ideas and their ideators;
not wealth creation.

Not that Capitalism 2.0 ignores or
abhors wealth creation. But transformation of the nation and mankind at
large is now taking precedence over
mercenary wealth creation.
What would you call Vinod Khoslaa capitalist or an environmentalist? Doesnt he flit between the two
roles with effortless ease? In fact,
hasnt he actually merged the two
roles into one? Or how would you explain Bill Gatess actions? Many consider him profanely capitalist in the
lives defeats all of the unbridled capitalism they had pursued earlier on.
It is almost as if they are deliberately
undoing all that they created as cashhungry capitalists.
In fact, the fruit of their capitalism
has now become the seed for greater
common good. But they are still riding
on the spirit of entrepreneurship and
the power of ideas to ensure that this
seed will eventually bear good fruit.
The foundations they have set up run
on ideas, not rules. They have ceased
to be capitalists, but they continue to
remain entrepreneurs. The
subtle change evident here
is that as social entrepreneurs, they mostly harness
the power of their ideas for
greater common good, rarely for the profit of their own
private enterprise.
Look at their lives. It is almost as if the free spirit of
entrepreneurship has completely overwhelmed and
subdued though, not eschewedthe profit-minded
DNA of capitalism.
Make no mistake about
it: entrepreneurship was a
child of free markets and
capitalism. It could not have
grown without the fertile
and nurturing environment
that capitalism created. But
now, you could say that the
child is stronger than the
parent. Entrepreneurship is
rising above the petty, profit-minded nature of capitalism. Todays entrepreneurs
want to give and to change
lives, not just build their market capitalisation or bank balance.
In the former ways of capitalism, an
idea that is not a commercial success
or an idea that does not create wealth
would be considered a failure. Such
ideas would no longer attract cash
and would eventually die. But in its
new avatar, money is available and
willing to serve ideas that improve
lives; ideas do thrive even if they
dont create wealth for the ideator.
More power to the idea. Ultimately,
only ideas can change lives. Not governments. Not businesses .
If cash-driven capitalism was

all about creating wealth,
ideas-driven capitalism is about
changing lives
12
way he built and guards Microsofts

turf. But now, others are equally free
in their praise of some of the pathbreaking work of the Bill and Melinda
Gates Foundation. Or consider Warren
Buffett, perhaps the worlds most successful wealth creator of all times. He
spends a lifetime perfecting the art of
making money in the markets, only to
give almost all of it away to charity.
The latest chapter in the lives of
these icons suggests that, in the end,
capitalism is pointless, without any
ultimate purpose. The unselfish philanthropy in the latter part of their
IDEA
CHINDIA
ASHISH GUPTA
HE 21ST century may usher

in a multi-polar world order,
catalysed by the staggering
economic success of two
key regions that have been
reshaping the global economic
paradigm in recent years, much like
Japan and the East Asian economies
did from the sixties to the nineties.
China and India, or Chindia, will

likely determine the contours of this
world, now dominated by the economic might of the US and the European Union. If the burgeoning growth
rates of these neighbouring economies
are any indication, we could well be
on the threshold of what many are
calling, the Asian Century.
The facts are overwhelming. Chindia
now represents two continental-sized
No More
Paper Tigers
China and India together have the potential to reshape the
economic world order in the 21st century
economies with a total size exceeding

$5 trillion, and growing at phenomenal speed; China grew by 11.4% and
India by 9.6% in 2007. Their combined two billion plus populations (of
which, the consuming middle-class
represents the chunk), a relatively
cheap yet skilled workforce, surging
foreign exchange reserves and booming domestic companies with multinational appetites, are just pointers
to its coming clout in the economic
pecking order.
Given these realities, Chindia is already on par with the US, the worlds
largest economy, in certain respects,
contends Surjit S Bhalla, Managing
Director, Oxus Research and Investments, and a keen China watcher.
For instance, the two Asian giants
already contribute 20% to the global
gross domestic product growth, the
same as that of the US. And by 2020,
Chindias share in global growth is
likely to go up to 40%, while the US
share will hunker down to just 1215%, Bhalla says.
MAXPPP
Their Time Has Come

In terms of economic growth, the next two decades belong to China and India. And India is tipped to grow even
faster than China.
Annualised GDP Growth in %
1950-1980
* Projected
HARD HATS, SMART HEADS:

By 2020, Chindias share in
global GDP growth will be 40%
2.9
3.3
2.8
1.5
2.7
1.7
2.5
1980-2006 2006-2025*
1.9
4.0
0.7
-0.1
7.1
4.2
1.9
2.1
5.3
1.8
1.7
6.2
8.3
3.4
GRAPHICS BY SUMEET GUPTA
West
Asia
Latin America
Africa
China
India
World
Source: Penn World, IMF 2006
IDEA
CHINDIA
YOUNGISTAN: In 2020, 547 million

Indians will be below the age of 25
The next 20 years, he says, will

come to be known as the period when
the world changed into a truly multipolar world again, because of the developments in these two countries.
Incidentally, these Asian giants have
achieved higher rates of growth for
longer periods. For instance, between
1985 and 2005, Chindia recorded
a growth of 5.3% per annum. This
closely parallels that of Japan during 1960-85 and is only 1 percentage
point less than what Korea and Taiwan achieved during 1970-95.
The big difference, of course, has
been that Chindia has had a population that was several times larger than
Japan, Korea or Taiwan.
Again, what will also help these two
countries shape the Asian Century is
their demographic profile. Remember, by 2020, India will be the youngest country in the world with around
547 million people below the age of
25, although China will have a much
larger aging population, says Amit
Mitra, Secretary-General, Federation
of Indian Chambers of Commerce and
Industry (Ficci), an industry lobby.
What this means is that India and
China will have a much larger, more
flexible and innovative labour force
than the rest of the world. This is likely to result in greater productivity. In
addition, the dependency ratiothe
ratio of the working population to
those dependent on the government
for grantswill also be much lower.
SANJOY GHOSH
Heavy Metal
At current size, China and India consume one-third of key
metals. And the rate at which they are growing, their appetite and share will only increase. India is a poor second
at the moment, but it will play catch-up.
Rivals or Partners?
Given all this bargaining power, the
reality is that China and India have always seen each other as rivals, chiefly
for resources that help power their respective economic engines. Even so,
whenever these two countries have
come together, they have formed a
formidable third front to counter the
might of the US and the EU.
Take, for instance, the case of the
World Trade Organisation. The duo
has effectively blocked any move by
the West to drag any non-trade issues
like labour standards onto the negotiating table. They have also resisted
18
36.0
29.6
Aluminium Copper
32.2
26.6
36.2
Lead
Nickel
Zinc
Figures show Chindias share (in %) in world consumption

Source: World Business of Metal Statistics
the opening up of their agricultural

markets, unless the West reduced domestic support to its farmers.
Experts say the scope for cooperation can be further expanded. Nagesh
Kumar, Director-General, Research
and Information Systems for Developing Countries, says that the two can
play a significant role on issues such

as climate change, WTO and reformation of the international financial architecture. It is time the Asian voice
was heard, he says. They are the
real drivers of global growth today.
Although Chindia by itself is a huge
enough entity to get noticed, what
can really change the world is a larger
South-South nexus. This could take
the form of an East Asian Summit
that will not only include the 10 Association of South East Asian Nations
(Asean), but also the six dialogue
partnersJapan, China, India, Korea,
Australia and New Zealand.
The combined strength of the 16
fastest-growing economies of the AsiaPacific region would make it a sure
third pole of the world economy. It
could end up challenging the might of
the North American Free Trade Agreement (Nafta) and the EU.
With roughly half the worlds population, a combined income exceeding
$18 trillion (on a purchasing power
parity basis) and forex reserves of
more than $3 trillion, this grouping
will be bigger than the NAFTA or the
EU in some respects.
IDEA
CHINDIA
Trade liberalisation in the

EAS region could produce welfare gains of up to $178 billion
for participating countries, with
proportionately higher gains
for poorer nations, representing
scope for economic convergence.
It would also help Asia play its
due role in global economic governance, Kumar says.
But the key question is whether
Chindia alone can be the driver
of global growth. Paul Rawkins,
Senior Director, Fitch Ratings
thinks so. Thanks to Chinas
robust growth, the world as a
whole escaped recession after
Americas stock market bubble
burst in 2000-01. So, China alone
can easily be the driver of global
growth. And with India joining
in, things can only get better.
ers in Australia, Brazil and South

Africa.
For the rest of Asia, Chinas
huge domestic market has become a locomotive for growth,
accounting for nearly 50% of the
total export growth of other East
Asian economies. Analysts believe the rise of China has played
a big part in Japans recent economic recoverytwo-thirds of
Japans exports are to China.
Moreover, it has been ploughing
back a large portion of its export
earnings into dollar-denominated
financial assets, especially in US
Treasury securities. This has ensured that bond yields and interest rates have remained low.
In contrast, Indias impact has
been far more muted, although
its status as a knowledge economy hub has never been in doubt.
Deep Impact
Its leadership position as an offSuch phenomenal growth, howshore information technology
ever, has resounding implica(IT) and business process outtions for the global economy.
sourcing (BPO) destination has
It has a direct impact on global
helped global majors cut costs
food, commodity and crude pricand move their R&D activities to
es; more so, from the perspec- THE INFLUENCER: Chinas real importance lies in its
India. For instance, Samsungs
tive of developments in China. ability to change the relative prices of various items
R&D division in India developed
The reason: China has a 13-year
the hybrid phone that operates
headstart over India when it comes
base in the Dragon kingdom. Today,
across different mobile technologies.
to liberalising its economy. Also,
China produces nearly two-thirds of
As India Inc improves its global footChina has largely emphasised on its
all photocopiers, microwave ovens,
print, either by taking the acquisition
manufacturing prowess, while India
DVD players and shoes, over half of
route or starting greenfield projects,
focused more on the services sector.
all digital cameras and two-fifths of
Indias stature as a manufacturing
Hence, it is no coincidence that the
all personal computers. Its unrivalled
powerhouse will gain traction. Inblame game for high crude, commodposition as the toy maker of the world
dias biggest surprise could be its inity and food prices is being increasand cheapest producer of textiles and
dustry. Five years from now, it could
ingly attributed to the gluttonous
garments still remain largely intact.
be a major player on the global scene
demand from India and China. After
But Chinas real importance lies
given the kind of entrepreneurial talall, China consumes one-eighth of the
in its ability to change the relative
ent available here, says Bhalla.
worlds energy, one in four tonnes of
prices of various items. Products that
Still, its early days yet. The two
steel and aluminium, and almost half
China makes generally see a fall in
Asian tigers will have to travel a bit
of the worlds cement.
prices, while those it imports rise. It
more before they become models of
Chinas unprecedented growth-it
has already pushed down prices of
development for others to emulate .
has accounted for 40% of the worlds
labour-intensive manufactured goods
crude oil demand since 2000not
and boosted the real incomes of its
only makes it a driver of a long-term
consumers. For example, the average
The EU concept rst
increase in energy prices, but also the
price of shoes and clothing has fallen
arose in the 1920s
most vulnerable to rising oil prices,
by 30% in real terms over the past 10
when French PM
says Rajiv Kumar, CEO, ICRIER.
years, thanks in large measure to ChiAristide Briand and German
Moreover, Chinas staggering exports
na, says a recent World Bank report.
FM Gustav Stresemann tried
(worth $1,218 billion in 2007) and imYet, its import of capital, raw mateto heal the rift between their
ports of $956 billion have much to do
rial and skill-intensive goods and sercountries and create a basis
with the fact that most multinational
vices has also hiked prices of these
for lasting peace in Europe
companies have set up manufacturing
goods, ensuring a bonanza for export-
20
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IDEA
ii
$3,000 CAR
Small Car,
Big Change
Apart from giving wheels to a lot more people, the
$3,000 car is an idea that can catalyse change in
road infrastructure, environment and policy
KUNAL N TALGERI
ENEATH ALL the specs

and frills, an ideas success
depends on answers to two
questions. First, what does
the idea require the user to
do? And second, what value
does it give the user? This has been
a litmus test for many an idea in the
corridors of the Massachusetts Institute
of Technology, one of the best research
institutes in the world.
With a $3,000 car, an automaker innately addresses the second question,
which pertains, quite relevantly, to
the price point of a car.
Until recently, several automakers
considered such a minimalist project,
proposed by Tata Group honcho Ratan
Tata, outrageous. Well, that changed
soon after the Nano was unveiled in
January this year.
At least four global automakers
Nissan, Renault, Toyota and Honda
have since acknowledged the merit
and scope of producing an ultra lowcost car (ULC). The entire product
portfolio of original equipment manufacturers (OEMs) is set to change in

favour of more fuel-efficient, environment-friendly and smaller cars,
believes Kapil Arora, Partner, Ernst &
Young. For starts, this May, Nissans
mid-term plan will spell out how the
Renault-Nissan ULC, along with its
electric vehicle, will be key growth
drivers for this $89 billion OEM.
By breaking the cost barrier, Tata
Motors has now made several other
seemingly insurmountable engineering and design hurdles look more
vulnerable. This might just embolden
other automotive companies to try
and break barriers in the realms of
performance, fuel consumption and
emissions. It could also force global
auto majors to eye India as an engineering hot shop, much like how
IBM, Accenture and EDS saw India as
a talent pool.
The change in manufacturing mindset globally is an indication of the
ideas potential at a time when emerging markets are vibrant. While the
$3,000 car will come from the Indian
Henry Fords genius was responsible for bringing

together brilliant men and encouraging them to develop innovations like the moving assembly line, branch
assembly plantsand of course, the Model-T Ford
24
market, it could cater to other emerging markets like sub-Saharan Africa,

East Asia and even some of the more
mature markets, says Arora.
The finest cars have struggled to
demonstrate scale in the Indian market, which has had less than 10 million motorcars registered between
1951 and 2004, according to the
Department of Road Transport and
Highways. Another 3.6 million new
passenger vehicles have hit the road
between 2004 and 2007.
But, a car sold on price and performance opens the Indian car market
even furtherto touch tier-II cities
and even rural areas. Between Tata
Motors and Nissan-Renault-Bajaj,
there could be 450,000 ULCs produced annually. Along with a sales
spike, the $3,000 car will bring to
bear issues of roads and infrastructure, environment, fuel consumptionand even policy matters. This
is what makes the ULC idea truly
transformational.
ALL IN THE FAMILY:

A car sold on price and
performance will help
companies make inroads
BHUPINDER SINGH
The $3,000 car will compel governments to review the state of

infrastructure and trigger reforms to cope with the greater traffic
Fits To A Model T
The idea of a mass-produced car has
an ancestry that goes back to the Ford
Model T developed a century ago.
One of the less-celebrated impacts the
Ford vehicle had was on daily wage
and, therefore, labour policies. At a
time when daily wages were $2.34 for
a nine-hour day, Ford announced $5
for an eight-hour day.
With the increasing production numbers Ford Motor had to clock, and the
need to train its workforce to handle
assembly lines and carry out repetitive
skilled tasks, Henry Fords car mission made a difference to the hands
that built the Model T. It changed the
lives of blue-collar workers.
India now has a reputation for being
a low-cost labour base. The mass-car
projects will boost employment and

pave the way for a range of relationships with auto-component suppliers.
The Nano project alone has close to
100 vendors on board. Our investments here will create thousands of
skilled job opportunities in India,
both direct and indirect, says Carlos
Tavares, Executive Vice-President of
Nissan. With the Chennai infrastructure (capacity of 400,000 units) at our
doorstep, India will truly become a
global business hub for Nissan.
By 2012, Nissan will have eight
products in India, ranging from the
entry-level car to higher-end sports
utility vehicles and sedans; again,
half of these models will be made
in India. Analysts who have worked
closely with the company assert that
the ULC has required Nissan to

change its mindset when it considered how to go about building a car
at such a low price-point.
The demand for Indian engineers
will also go up commensurately. In
early April, German Ambassador
Bernd Mutzelburg had emphasised
this particular aspect. As much as
there is a crunch of engineering talent
in Germany, our country is becoming more open than ever to countries
with the quality and size of Indias
engineering HR base, he said.
Nissan has already begun sending
its engineers to learn from Bajaj. It is
what Nissan CEO Carlos Ghosn calls
frugal engineering, sparked off in
no small measure by the $3,000 car
project. Indian and other emerging
25
IDEA
ii
$3,000 CAR
markets will drive product development for the next 20 years or so, given
the current state of the US and European economies, says Arora of Ernst
& Young. The focus of developing the
$3,000 car (or a sub $3,000 car) is to
eliminate all inefficiencies in the value
chain. It calls for a 360-degree understanding of its intricacies, from the
raw material to the roll-out stage.
Increasingly, with the $3,000 car,
foreign OEMs understand the value of
catering to different customers with
a smaller, more frugal offering. The
shift is reminiscent of the Model T
again. By making the car affordable,

Fords output shot up from 170,211
units to 501,462 units between 1911
and 1915, around which time Henry
Ford considered further price reductions at $300 levels.
Driving The Environment

In equal measure, history also deems
the Model T to be Fords folly. In taking his cars to the masses, Ford triggered a trend of mobility at a considerable cost to the environment. Time
magazineborn fifteen years after
the Model Trated the Ford vehicle
last year as the second-worst car of all
time. This was an indictment of the
air over our cities and putting every
living soul on gas-powered wheels.
It is a familiar argument in India already with the $3,000 car concept
and an opportunity to drive change on
environmental policies. It isnt just
the question of a small and affordable
car, notes Anumita Roychowdhury,
26
Associate Director at the Centre for

Science and Environment (CSE). It is
also about governments planning mobility within cities. People must buy
cars, but there should also be policies
to ensure that mobility needs are met
by public transportation, she says.
Roychowdhury cites CSEs 2006 research on Delhi. More than 80% of
Delhis road space is occupied by cars
and two-wheelers, which address less
than a quarter of the travel demand
in the city. On the other hand, buses
occupy only 5% of the roads and
meet 60% of the travel requirement.
through congestion-pricing and roadpricing systems, which have yielded

reasonable results in the UK. Congestion charges discourage people from
taking cars into busy sections of the
city. They have helped in reducing
traffic in targeted areas of London by
30%, says Roychowdhury.
The influx of more small cars in India should spark off a rethink on similar lines, especially on parking charges, excise duty rates on buses (which
are much more than on passenger
cars) and other subsidies on cars.
The rapid entry-level expansion of
the auto sector will be accompanied
by a shift among buyers, who will
move from smaller to bigger cars. Given the size of the market by then, environmentalists see the period as the
best time to raise emission standards
and fuel economy regulations. We
will have to do a technology leapfrog
to cope with such a rise in vehicle
population, says Roychowdhury.
Roads and infrastructure will be
pushed just as much by the $3,000
car. Less than 50% of the 16 lakh kilometres of available roads in the coun-
Small cars might embolden other auto

companies to try and break barriers in the realms
of performance, fuel consumption and emissions
Such a situation is unsustainable,
she says.
Fuel consumption also becomes a
critical issue with personal mobility
for the masses. Between 1980-81 and
2003-04, fuel consumption grew at
5.7% per annum, though it has moderated to 3% in the past four years.
For most of this period, personal
motorised transport and increase in
vehicle population have contributed
to the rise in fuel consumption. The
Nano has been a concerted effort to
provide more kilometres (20 km) per
litre. Still, the spread of any $3,000
car will need to be balanced with a
robust public transport system to
moderate fuel consumption.
The solution lies in monitoring (even
monetising) passenger car usage
try are surfaced, as of 2002. About

one-fifth of these available roads
were in urban areas. With the $3,000
car, governments will be compelled
to review the state of infrastructure.
From road widening and introduction
of more lanes to bridges and flyovers,
the idea will trigger reform to cope
with the volumes of traffic.
The concept of the $3,000 car comes
bang in the middle of the green movement in the global auto industry. Given the clout that emerging markets
have in the global economy, the idea
is relevant. However, one century on,
the $3,000 car still poses a valuable
opportunity of doing what the Ford
Model T failed to do beyond becoming an affordable carto evolve into
a truly transformational idea .
IDEA
IDEA
iii
SYSTEM FOR RICE

INTENSIFICATION
... More Shall
This new method of rice cultivation can increase output

dramaticallywhile using fewer inputs and at a lower cost
NAREN KARUNAKARAN
More Rice Per Hectare

ICE IS a staple food in India.
Once a plank for bragging
rights, this pride of place
for rice in Indian diets is
gradually turning into a
burden. The root cause for
concern is the stagnation in the annual
growth in rice productivity at 0.5%.
According to the World Wide Fund for
Nature (WWF), India needs to increase
its rice production by 2.5 million tonnes
a year to meet its requirement in 2050.
Put another way, rice output needs
to increase by 92% from the current
140 million tonnes to meet demand in
2050. If production fails to keep pace
with demand, rice prices will continue
to rise at an uncomfortable rate and
the government will have to increase
its dependence on imports. A food
security issue is looming.
R
28
Yet, the leviathan agricultural research

apparatus is shockingly cavalier about
the silent wave sweeping rice-growing regions of the world: the system
of rice intensification (SRI). Developed 20 years ago by Father Henri de
Laulanie, a Jesuit priest in Madagascar, SRI is a designer innovation in
which younger and fewer seedlings
are transplanted with wider spacing
and no continuous flooding.
By merely changing how plants, soil,
water and nutrients are managed, SRI
can increase rice yields to up to 15-20
tonnes per hectare. Given that Indias
average rice yield is 3.1 tonnes per
hectare, SRI has the potential to bring
about a manifold increase in rice productivity and productionthat too
with fewer inputs and at a lower cost.
Says Dr Biksham Gujja, Policy Advi-
WORLD WIDE FUND FOR NATURE
You Reap
RICE BOWL: SRI can increase rice yields
by 64% from current levels
sor, Living Waters Programme, WWF

International: A change in mindset
is required. The green revolution was
a high-input, seed-centred approach.
Farm practices were never given importance, which SRI does.
Rice is a thirsty crop. About 45
million hectares are under the crop
and about 5,000 litres of waterone
persons daily water needs for four
monthsis required for just one kg
of rice in the conventional flooding
of the field method. SRI uses 25-50%
less water. Instead of flooding paddy fields, SRI requires only the root
zones be kept moist. It also cuts seed
requirement by an astonishing 95%.
Fewer seedlings are planted, with
more space between them (See table:
A Rich Tradeoff).
Cost savings and greater productivity improve profitability. Studies
show that the net returns per hectare
of rice farmers who adopted SRI was
67% higher than those who followed
IDEA
iii
SYSTEM FOR RICE

INTENSIFICATION
A Rich Tradeoff
Be it costs or benefits, SRI scores over the traditional method of rice cultivation
Conventional Method
SRI Method
5 tonnes per hectare
5 kg per hectare
Seedlings about 8-12 days old
16 per sq m
1 per hill
Organic fertilisers; pesticides,
insecticides usually not needed
Moist conditions only
With a weeder
Source: WWF study
AP
FARM LESSONS: SRI uses 25-50% less water than the conventional method (above)
the conventional method. A farmer

in Andhra Pradesh achieved a rice
yield of 17.3 tonnes per hectare. Although such super yields are more of
an exception, an increase of around 2
tonnes per hectare64% more than
current levelsis achievable.
Weeds In The Way

If the establishment is looking away
from this revolutionary method, its
because of inertia, reluctance to stray
into new territory and vested interests. Says Gujja: Seed companies
have been deploying SRI methods to
grow seeds for years, but didnt encourage its use in rice cultivation.
Other countries too went through
a similar phase. SRI was met with
hostility by the western agricultural
establishment when it first breached
the borders of Madagascar around
1999. It was derisively described as
agronomic UFOs (unconfirmed field
observations). However, now, criticism is muted, as farming communities from China to Peru have begun to
root for SRI.
Much of the credit for this change
can be attributed to the global SRI
evangelist Norman Uphoff, Director
of the US-based Cornell International
Institute for Food, Agriculture and
Development (CIFAD). He briefed
the Prime Ministers Office recently
30
to emphasise the urgency for SRI in

India. Says Uphoff: An increase of
two tonnes per hectare is all that is
needed to meet the food needs of
most countries.
Only after the Uphoff briefing is a
sceptical Indian Council of Agricultural Research waking up to SRI. Even
then, the inclination is to discredit it,
says Ravi Chopra, associated with
two NGOs popularising SRI in India,
Pradan, in the plains, and Peoples
Science Institute, across the Himalayan ranges.
SRI has been included in the National Food Security Mission, which talks
about increasing rice production by 10
million tonnes by 2012. Admits Dr BC
Viraktamath, Project Director, Directorate of Rice Research, Hyderabad,
ICAR: SRI has to be encouraged.
The pace of change could use a concerted push. So far, SRI has found
acceptance in scattered areas in just
three states: Andhra Pradesh, Tamil
Nadu and Tripura. Says Viraktamath:
About 100,000 hectares is under SRI,
which can be scaled up to 500,000
GRAPHIC BY SUMEET GUPTA
3.1 tonnes per hectare

50-60 kg per hectare
Seedlings about 30 days old
30-40 per sq m
3 or more per hill
Chemical fertilisers, pesticides,
herbicides and insecticides
Water management Continuous flooding
Weed removal Manually
Yield
Seed requirement
Transplanting
Clump density
Seedlings
Fertilisers
hectares in the next five years. Still,

thats only 1.1% of the total rice area
under cultivation, though SRI is said
to have a presence in 130 of the 500
rice-growing districts.
Today, the policy response is piecemeal. For instance, some governments
are looking to give a subsidy on weeders, which currently cost around Rs
1,800; some governments are looking
to motorise it. For a truly transformational impact, SRI needs a groundswell of support. That means training
and building awareness among farmers, agricultural extension workers,
policymakers and scientists. Says Gujja: There is a crying need for a wellthought out, comprehensive policy
initiative on SRI, with national-level,
time-bound targets.
SRIs potential to alter Indian agriculture can extend beyond rice. We
are trying this system for other crops,
like wheat and madua (ragi), says
Chopra. Experiments with wheat in
Dehradun saw yields increase from 18
quintals per hectare to 21 quintals per
hectare. Similarly, traditional methods
of growing sugarcane, another thirsty
crop, require 10 tonnes of seed buds
per hectare, SRI methods require only
one tonne; as for the yield, it can increase from 65 tonnes per hectare to
144 tonnes. For India, intensification
ought to be a war cry .
Each aspect of Laulanis technique was already in

use in Madagascar before SRI was labelled. What
the Jesuit priest did was to draw these variables together
into a single suite of agricultural techniques
IDEA
iv
SMART CARDS
The Card
Trick
The government has woken up to the power of the

smart card to implement rural development schemes
and eliminate corruption in the pipeline
SEBASTIAN PT
T IS mid-afternoon and the sun is

burning brightly in Ghatog village
of Rajasthans Jalawar district.
Ramesh Chander, 38, and his
wife and children, are however,
unperturbed by the heat as they
pose for a photograph. The excitement
on Chanders face is obvious as he
happily flashes his gingivitis-ridden
teeth to the camera. His enthusiasm
is understandable, given that hes
about to receive something that will
change his life for the better.
The photograph of Chander and
his family is embossed on a biometric card issued by the Union Labour
Ministry and handed to him. It will
enable the family to avail the benefits of the ministrys health insurance scheme, the Rashtriya Swasthiya Bima Yojana, with ease.
About 300 km away, 18-year-old Imran Khan, a resident of Manoharpur
Kacchi Basti on the outskirts of Jaipur, has already come face to face
with technology. A daily wager with
an irregular income, this marble mason is beginning to cultivate the habit
of saving for a rainy day, thanks to a
pilot project run jointly by ICICI Bank
and an NGO. The project aims to
bring people on the fringes of society
32
into the formal banking system.

Imran, like many others in his
slum, has had no formal education.
Ordinarily, this would have discouraged the illiterate lad from operating a bank account because of the
amount of writing involved. All that
has changed thanks to this biometric
card. Whenever Imran wants to deposit or withdraw money, all he has
A Simple Solution
POCKET HISTORY : A health insurance

card given to a poor family in Rajasthan
to do is get his fingerprint authenticated by a biometric device wielded

by a mobile banker. The banker, who
makes the rounds of suburban slums
with his handheld biometric device,
then completes the transaction. This
project has huge potential for expansion into the hinterland.
At the centre of this technological

revolution that is gradually spreading
across rural India is the smart card.
The card seems a lot like a debit or
credit card in appearance. However,
the similarity ends there. Debit and
credit cards (at least most of those issued in India) have a magnetic stripe
at the back. A smart card, on the other hand, usually contains an embedded microprocessor and a memory
chip. The microprocessor allows data
to be added, deleted and edited on
the cards memory. Some smart cards,
such as prepaid cards issued by telecom firms, have only the memory
component and can only undertake
one particular operation.
Smart cards are being used widely
in Europe, particularly in the banking,
public transport and health insurance
sectors. In Germany, for instance, ev-
PLASTIC POWER: Ramesh Chander

displays his familys health insurance card
PHOTOGRAPHS: BHUPINDER SINGH
already begun extending its health

insurance scheme using smart cards,
helping people like Ramesh Chander.
Smart cards are also being used on
a pilot basis for social security pensions and the National Rural Employment Guarantee Scheme (NREGS) in
Andhra Pradesh.
Again, in its recent budget, the Rajasthan government has announced
the use of smart cards in a financial
inclusion plan for 5 million families
living below the poverty line (BPL).
Apart from a savings bank account,
the smart cards will be used to access
other benefits like health insurance,
old-age pension and NREGS wages.
Says development economist Jean
Dreze: Information technology (IT),
including the use of smart cards, can
indeed be of great help in imparting
transparency and preventing corruption in programmes such as the
NREGS. However, he cautions: ITbased solutions are not problem-free,
especially in the early stages where
a largely uneducated population will
struggle to get familiar with them.
They are certainly no substitute for
the strict implementation of all transparency safeguards.
The need of the hour is convergence. Instead of separate cards for each
scheme, the government should issue a single card embracing all of them
ery citizen has such a card for health
insurance. In Asia, smart cards are
most commonly used in bus and
suburban train systems in countries
like Japan, South Korea, Singapore,
Taiwan, Malaysia and the Philippines
(even Kolkatas Metro and Mumbais
BEST bus service have begun using
smart cards).
In India, the Gujarat government
was the first to embrace this technology, introducing a smart card driving
licence in 1999. However, the technology has not become ubiquitous and
has largely been confined to use in
the ID cards of security agencies.
All that is about to change however,
and rural India could well be at the

vanguard of the smart cards widespread adoption in India. The smart
card has proved to be the ideal tool
for the furtherance of e-governance
initiatives and delivery of government
schemes, as well as in spreading formal banking, as highlighted in the
case of Chander and Khan earlier.
The Central government, as well
as states, have begun to realise the
power of the smart card to spur development. The Finance Ministry
will launch a pilot project using such
cards for PDS in Haryana and Chandigarh, hoping to cleanse the system of
corruption. The Labour Ministry has
As part of a pilot project, the Union

Home Ministry has issued 1.2 million
Multipurpose National Identity Cards
(MNICs) in select sub-districts of 12
states and one union territory. The
secure card has a chip containing personal data, photographs and fingerprints, along with a 16-digit National
Identity Number (NIN). The pilot
project will study the complexities of
integration of data, verification of citizenship as per the Indian Citizenship
Act, 1955, preparation of a National
Population Register, and establish a
sound base for implementation nationwide. The scope and methodology
of nationwide implementation will be
33
IDEA
iv
SMART CARDS
studied by a Group of Ministers

schemes are to be clubbed with
after the projects completion.
the health insurance scheme, a
Says Veerappa Moily, who
new card will have to be issued as
heads the second Administrative
the old one cannot be upgraded.
Reforms Commission that recentThis will result in needless duplily recommended the early implecation and a waste of resources
mentation of the MNIC project:
and manpower.
The corruption and harassment
Again, it must be noted that the
of the target group for any govuse of smart-card technology can
ernment scheme is mainly at the
have a downside. One of the priidentification stage. The delivmary concerns is data security; if
ery system cant be perfected till
this is compromised, it could lead
there is an MNIC in place.
to fraud, not to mention loss of
The MNIC idea was initially
an individuals privacy. The posconceptualised by the Vajpayee
sibility of personal data falling
government in 2003 to check ilinto wrong hands, despite assurlegal immigration. However, its
ances by the government to the
scope has now been widened.
contrary, could have dreadful conAccording to official sources, the
sequences. Such incidents have,
MNIC will even be able to serve
in fact, taken place in several deas proof of identity while openveloped countries. In the UK for
ing a bank account, securing a
instance, a government agency
passport and so on.
recently lost discs containing data
Again, it is not only in the rural
on about 25 million people who
space that smart cards are changwere recipients of a government
ing things. The Indian passport
benefits scheme.
too will soon get smart, thanks
There is also the fear of corrupt
to a 64 KB microchip implanted ACCESS TO A NEW WORLD: Imran Khan gets his
officials leaking classified inforin its back cover. Apart from per- fingerprint validated for a banking transaction
mation to unscrupulous elements.
sonal details, the chip will conAnd, no doubt, as technology
Shetty says that it is technically postain biometric data, making manual
becomes more sophisticated, crimisible to integrate all the schemes into
immigration clearance a thing of the
nals will find new ways of commitone card. However, lack of coordinapast. The Ministry of External Affairs
ting crimes. New technologies must
tion among the various departments
plans to commence an e-passport pitherefore be adopted with adequate
of the Union government with each
lot project in May.
safeguards in place. But adopt them
other and with states is an obstacle.
The passport will contain biometric
we must if India is to go ahead.
That is indeed true. Multiple govdata as recommended by the InterWhile it must be lauded for ensurernment agencies and institutions are
national Civil Aviation Organization
ing that the poor also benefit from
working in parallel, but without cohe(ICAO). BN Shetty, head of the Extechnological advances, there is much
sion. For instance, there is no clarity
ternal Affairs Informatics Division,
more the government can do. If it proon whether the MNIC will replace the
points out that the Indian passport
ceeds with some foresightedness, the
election card distributed by the Elecalready has several visible and invisday may not be far when all Indians
tion Commission.
ible security features. The biometric
have a single social security card.
Meanwhile, funds are still being
version will prevent impersonation
This smart card, if it comes into
expended on making election cards.
and prevent a person from holding
being, could also do away with the
Again, while the Labour Ministry is
multiple passports.
PAN card and election card, among
going ahead with its health insurance
others, unifying them under one umNow, For Some Intelligence
smart card, the scope to introduce
brella along with ones PPF account,
However, while its all very well that
other schemes using the same card
EPF account, medicare, and so on.
the government is going the smart
is limited as the cards microchip has
When that day comes, we can indeed
way, it needs to be smarter in exa capacity of only 16 KB. If any other
say we live in a smart society .
ecuting its plans. As things stand,
various ministries, both at the Central
The rst smart card was developed in 1974, by
and state levels, are individually isFrench independent inventor Roland Moreno. He
suing cards to promote their various
mounted a chip on a card and devised a system to use the
schemes. The need of the hour, howcard for transaction payments
ever, is convergencea single card to
embrace different schemes.
34
IDEA
AEROTROPOLIS
Airport City
The new paradigm: rather than shunt an airport to the periphery,
put it in the middle and build a bustling city around it
SUDIPTO DEY
ICTURE A dot and three

circles around it, each larger
than the preceding one.
The dot in that picture is
the Suvarnabhumi Airport,
in suburban Bangkok. The
innermost circle, a stones throw away
from the airport, will house businesses
and facilities that feed the airport and
feed off itlike trade zones, warehouses
and logistics hubs. The middle circle
will house companies and other things
business like convention centres and
hotels. The outermost circle, 20 miles
from the airstrip, will have clusters
of high-rises for people who work in
the two inner circles, and their other
necessities and indulgences.
In terms of size, the airport is
dwarfed by everything around it.
Yet, its the primary reason the three
circles can create a bustling, self-con-
38
tained ecosystem. Suvarnabhumi is

the shape and logic of our future cities. The essence of this thought is that
rather than shunt an airport to the periphery of the city, put it in the middle
and build everything around it.
Flights Of Fancy
Aerotropolis is the concept the makers or renovators of Nagpur, Durgapur,
Kochi, Hassan, Hyderabad, Delhi and
Bangalore airports have in mind as
they build or modernise their airports.
While their projects may not have the
scale and sophistication as a Suvarnabhumi, the idea is the same.
They are being built not just as junctions for flights to take off and land.
They are being designed to shape and
drive economic activity in a region.
They will alter the cityscape. They
will change where and how we live,
work and play. Says Professor John
D Kasarda of Kenan-Flagler Business
School, University of North Carolina, who conceived the aerotropolis

model: Airports will shape business
location and urban development in
the 21st century as much as highways
did in the 20th century, railroads in
the 19th and seaports in the 18th.
Since business linkages are paramount to make an aerotropolis viable,
special economic zones (SEZs) are an
obvious catalyst. Without the SEZ,
the airport will not be viable. Without
the airport, nobody will come to an
SEZ, says RC Sinha, Managing Director, Maharastra Airport Development
Company (MADC), which is developing a cargo hub and an SEZ in Nagpur
over 4,000 hectares at a cost of about
Rs 5,500 crore over the next 20 years.
When finished, the SEZ and the hub
will employ 120,000 and give indirect
employment to another 300,000. According to Sinha, five million will settle in and around the hub. About 35
RIPPLE DEVELOPMENT: A Google Earth

image of the aerotropolis built around the
Hong Kong International Airport
Dr John D Kasarda
ARCHITECT OF THE
AEROTROPOLIS MODEL
Ground Realities
THE SUCCESS of an aerotropolis rests on the
extent of air connectivity. And connectivity is
determined by the number of markets served
by the airport and the frequency of the service, which, in turn, depends on the strength
of the respective markets. The small airports in
India are just inactive World War II era airstrips
in weak markets. An aerotropolis also assumes
good surface transport access to the airport,
and skilled labour for aviation-dependent
businesses. The small city airport region has to
measure up on both fronts.
Only a few airports can become aviation
hubs. There are examples of an aerotropolis
evolving around smaller city airports: Campinas (Brazil), Fort Worth (Texas, US), Louisville
(Kentucky, US) and Subic Bay (Philippines). In
each case, air cargo was the driver, and was
tied to the airport being selected by an air express or air cargo airline as a hub. The bottom
line: aerotropolis has to be more than a build
it and they will come dream. Success rests on
market realities, good surface transportation
accessibility and adequate air service.
companies have booked space in the

SEZ, including TCS, Wipro and L&T.
Around 30,000 flats are being developed. And annual passenger traffic in
the airport, which currently sees only
20 flights a day, is projected to grow
from 500,000 to 14 million.
In Hyderabad, the GMR Group is
looking to develop assembly hubs for
gold and jewellery units and for medical tourism, besides IT, pharma and
financial services, around the new airport it built. Says V Jayaraman, Chief
Operating Officer (Property Development), GMR Group: The artisans in
similar assembly units in the Gulf are
mostly from India. Working closer
home can reduce the lure of travelling overseas. In Kochi, Cochin International Airport Limited is planning
to invest Rs 5,000 crore in a 450-acre
aerotropolis, which will include an
aircraft maintenance, repair and overhaul (MRO) facility, aviation training
school, hotels, amusement park, golf

course and an IT park.
Air Pockets
Given the huge contiguous land requirement and project cost, an aerotropolis, in its truest form, is likely to
come up around non-metro cities and
towns. Like the Bengal Aerotropolis
project, a Rs 10,000 crore greenfield
project across 2,375 acres in the middle of the Durgapur-Asansol industrial
belt. This will trigger a reverse flow of
businesses from cities to towns, and
spread the fruits of economic success,
across regions and people.
For now, though, aerotropolis plans
in India are either on the drawing
board or in early stages of execution.
A lot more needs to happen for it to
become a reality. Says Albert Brunner, Chief Executive Officer, Bangalore International Airport: The
aerotropolis concept will succeed in
India, but we dont know how long

it will take. The question marks are
less over attracting business and more
over getting supporting infrastructure
like water and power in place. Several agencies need to work together,
which may take time, he says. Adds
GMRs Jayaraman: The government
should create a single-window clearance system. Many dots need to be
joined to complete the circle, but the
idea is taking wing .
With Kunal N Talgeri and
Supriya Kurane
Amsterdam Airport
Schiphol is the rst
aerotropolis, though it
wasnt conceived like that.
Its makers kept on developing it, till someone pointed
out the grand design.
39
HOME WORK: A project in

Neral using pre-fabricated fibre
cement boards
PHOTOGRAPHS: SOUMIK KAR
vi
IDEA
RS 5 LAKH
HOUSE
Karjat is the epicentre of

an experiment to provide
affordable housing within
travelling distance of cities
PRASHANT MAHESH
HERE IS nothing remarkable

about the town of Karjat,
Maharashtra, except perhaps
its proximity to the popular
hill station, Matheran.
Situated about 80 km from
Mumbaia 2-hour drive by roadthe
town is home to about 220,000 people.
Karjat has now become the focal point
of an innovative low-cost housing
experiment that may offer a solution to
Indias urban housing problems.
Matheran Realty, promoted by Mumbais Silva family and the London-
T
40
Home,
Cheap Home
based Eredene Capital, is laying the

first bricks in a 100-acre settlement
that will eventually have 200,000 lowcost houses. The idea is to sell these
houses at Rs 999 per square feet, or
roughly Rs 3 lakh to Rs 5 lakh per
house. The flats will come in three
sizes: 300 sq ft, 400 sq ft and 500 sq
ft. These are not big enough to be
called one-bedroom apartments, but
they are certainly bigger and better
than the shanties lined along many
of Mumbais bustling roads. Besides
the dwelling units, the site will have
schools, hospitals and other facilities.
Ten years down the line, the num-
ber of houses in Karjat is likely to

outnumber the adults in the towns
population now. So what use does
Karjat have for all the houses?
The town is connected to Mumbai
by suburban trainabout 35,000 people do the two-hour commute every
day. A new local passenger train
from Karjat to Mumbais Chatrapati
Shivaji Terminus via Panvelis also
likely to start this month. This will
improve connectivity and cut commuting time further. Matheran Realty
is hoping to leverage this factor to
lure many of Mumbais poor to buy
houses and settle in Karjat, and make
vi
IDEA
RS 5 LAKH
HOUSE
the daily commute to Mumbai. Says

Raju kaka, a tea stall owner on Railway Road, Karjat: My son works in a
private company in Dadar (Mumbai)
and travels by local train, or long distance trains, which halt here.
Quicker, Cheaper
There are two strands in the low-cost
housing experiment being scripted in
Karjat. First, the location: it is not too
close to Mumbai and hence avoids
high land costs; at the same time, it
is not too far, enabling the daily commute. The model is replicable in more
locations around Mumbai and also
around several other Indian cities
bursting at the seams.
The second strand is the technology.
Matheran Realty has handed out a Rs
4,800 crore construction contract to
Philippines-based Sterling Construction Company. The latter has the
patent for a low-cost construction
method based on pre-fabricated fibre
cement boards. Sterling Construction has used this technology to build
homeslow cost and otherwisein
the Philippines (8,000 houses), Australia (250), Jordan (two buildings
for the British Embassy), India (212
houses in Neral, Maharashtra), Oman
(500) and Qatar (250). But it has never attempted anything on the scale of
the Karjat project. Moreover, none of
PIECEMEAL: Pre-fabricated fibre cement boards reduce construction costs by 15-20%
nila using this technology, we are

fairly confident about it, says Nikhil
Naik, Chairman, Erdene Infrastructure, which invests in infrastructure
and specialty housing projects. It has
invested Rs 131.2 crore in the project.
Besides saving on material costs
(bricks, cement, plastering and masonry can largely be done away with),
the other advantage of this technology
is that it slashes construction time to
one-fourth the normal duration, without compromising on quality, says
along the suburban railway lines in

Mumbai, but only in the outskirts.
Huge Potential
About 52% of people in Mumbai live
in slums. Not just taxi drivers and vegetable vendors, but even office staffers, says TS Hariharan, President,
Matheran Realty. All of them dream
of owning a house, he adds. Many
such families have incomes in the
Rs 10,000-per-month range and could
manage to pay the Rs 3,000-Rs 5,000
Location is important in the low-cost housing story. Not too close to cities
to avoid high land costs, yet not too far, enabling the daily commute
the earlier undertakings had the same
cost compulsions.
Besides lowering costs by 15-20%,
the technology also facilitates faster
construction. We can build two
houses in a day, says Mark Taylor,
Chairman, Sterling Construction Systems. In January this year, Sterling
Construction started work on a 212house project called Tuscan Terraces
in Neral, Maharasthra, using the technology (although not on a low-cost
venture). The houses will be ready
next month. A cursory glance shows
the houses to be sturdy enough.
After studying houses built in Ma-
42
Taylor. Sterling has been using this

technology since 2000. There are savings on masonry work and the construction is environment-friendly as
it eliminates the use of bricks. Construction cost savings could be to the
tune of 15-20%, compared to conventional construction, says Salman Sayeed, Vice-Chairman and Chief Technical Officer, Sterling Constructions.
The first prototype at Karjat will be
ready by May. The initial phase of the
project will see 10,000 houses built
over 12 months. Later, based on the
success of this phase, Matheran Realty plans to look at other such options
monthly instalment on a loan taken

to purchase one of Matheran Realtys
low-cost houses.
But good quality, low-cost housing
has been hard to come by thus far.
Since its inception in 1977, the Maharashtra Housing and Area Development Authority (MHADA), which
was formed to create affordable housing for the lower- and middle-income
groups, has built merely 213,00 houses (data till 2001). Even this has involved various controversies, including allegations of poor construction,
MHADA favouring builders backed
by politicians, and giving out land to
NILOTPAL BARUAH
vi
IDEA
RS 5 LAKH
HOUSE
family and friends. According to estimates at the start of the 11th Plan, the
total housing shortage in the country was 24.7 million, out of which
14.1 million was in rural areas and
10.6 million in urban areas. Even the
private sector has largely been reluctant. With land costs in the city being high, unless the government gives
subsidised land, how can we build
low-cost houses? says Ali Lokhandwala, Director, Lokhandwala Infrastructure. But a few companies sense
a business opportunity.
Low-cost housing is a high-volume,
low-margin business, says Ashwin
Ramesh, Principal, Primary Real Estate Advisors. Here, one would have
to use different technology to bring
down costs and make it viable, he
adds. But it is this unique use of technology and the idea of locating large
settlements of low-cost townships in
the far, but well-connected, outskirts
of big cities that makes the experiment in Karjat compelling.
The Twin Innovation

Karjat is also in the vicinity of several
high-employment, industrial clusters
like Patalganga (10 km away; home
to Reliance Industries polyester plant
and employing 5,000 people) and
Taloja (26 km away; has factories of
Hindustan Copper and Indal, among
others). More like the Mukesh Ambani-led Navi Mumbai SEZ (20-25 km
away; expected to employ two million people in the next 10 years) and
Indiabulls 6,000-acre SEZ in Raigad
district (about 20 km away) are coming up. The new international airport
to be located in Navi Mumbai, too, is
only 23 kms away. All these factors
will drive up demand for housing in
Karjat, says Hariharan.
The model could be replicated in
other cities too. For example emerging
auto hubs like Maraimalai Nagar and
Thiruvaloorboth in a radius of 50
km from Chennai and connected by
HOUSE THAT: 7 days,

Rs 2,000-4000 per sq feet
Wood House In India

IF A builder promised to construct a
house within a week, he would be declared insane. Incredibly, one company is doing just that. New Delhi-based
Wood Barn India is importing wooden
houses that can be assembled in less
than seven days. The cost: Rs 2,0004,000 per square foot.
Wood Barn is importing the wooden
houses from three Canadian companies. Made in China using kiln-dried
spruce, the houses have a 50-year
guarantee. The entire house is imported in knocked-down form. A basic version, consisting of a bedroom
and a bathroom, costs Rs 3 lakh. This
could come down further if import
duties, as high as 32-34%, are cut.
The wood is treated for termites and
is water resistant. In colder regions,
there is no problem. In the plains, as
the soil is different, we suggest an
annual termite proofing, says Vivek
Bhatter, Director of Wood Barn India.
suburban railcould be the next stop

for similar solutions. In Delhi, areas
like Ghaziabad and Meerut, about 5070 km away, could well be the answer.
Low-cost houses have to be built in
places that are a generator of employment, says Sourav Goswami, Managing Director of private equity firm
Walton Street Capital, which focuses
on real estate. Walton has tied up with
Laurie Baker, the pioneer of low-cost housing, built

houses using mud, locally available stones and plant
material. He focused on retaining a sites natural character and a style that integrated well with local culture
44
The houses have been built to

withstand Indias extreme weather
conditions. They come in a number
of designs and layouts, and can be as
tall as four storeys and as wide as a
departmental store. With steel and cement prices going through the roof,
and construction time increasing by
the day, these wooden houses offer a
viable alternative.
In the last two years, the company
has built 16 such houses around
Delhi, and is in talks with the governments of Jammu and Kashmir and Uttarakhand to set up resorts and tourist houses in the states. Again, Delhi
will face an acute shortage of hotel
rooms during the Commonwealth
Games, and the state government can
use these houses as a quick fix. After
the games, each house can be dismantled and taken elsewhere, sold, or
even made into a PG wood house!
Anurag Prasad
Shriram Properties and Starwood Capital to develop a 314-acre township in

Kolkata, a part of which will be dedicated to low-cost housing.
Designing small houses also presents a space challenge. Aesthetics is a
challenge, says Amit Kulkarni, of Edifice Architects. Low-cost structures
use different construction methodologies. There is no plastering and, at
times, recycled materials are used.
Identifying a cheap, yet strategic,
location is only the first step. Technology innovations in materials and
construction cost are also required to
keep prices under the psychological
Rs 999 per sq ft mark .
IDEA
vii
RURAL BPO
Village
Voice
Rural BPOs have the potential to transform the

employment landscape of Indian villages
NANDITA DATTA
N THE city, I could never hope

to get a job with an Infosys or a
Wipro because of my educational
background. So, I did odd jobs for
companies that didnt pay much
and, worse, offered me no career
growth. Today, I can support my family
and am looking forward to becoming a
team-lead soon. Im also saving money
for a skill upgradation course.
This is not some disgruntled employee moaning about his career graph,
but a twenty-something associate
working at a rural business process
outsourcing (rural BPO) firm in north
Karnataka recounting his four-year
struggle to come good in Bangalore.
Currently viewed more as a social
responsibility rather than a real business opportunity waiting to be capitalised, rural BPO has definite potential
to change the face of rural India. Especially, in addressing its unemployment problem and countering distress
migration to urban areas.
To understand just how, one must
talk to Jayaram K Manivannan, the
man in charge of Hyderabad-based
Byrraju Foundations rural BPO initiative, GramIT. Manivannan, believed
by many to have pioneered the concept in India, says 15% of his 520strong staff are people who have re-
46
turned to their villages from various

cities and towns in Andhra Pradesh.
And, his isnt an isolated case. HOV
Services, a specialised finance and
accounting BPO firm with more than
11,000 people spread across 40 delivery centres in India, China, Mexico,
Canada and the US, says it has over a
hundred rural BPO employees (out of
BPOs in villages enjoy the cost advantages of

comparatively lower salaries and rentals
a total of 4,000) who have voluntarily
opted to return.
As one woman employee writes:
This opportunity has given me a
chance to fulfil my ambition of being
part of the IT sector and to live happily with my family. Another middleaged man tells us that had he got this
opportunity earlier in life, he would
never have migrated to Chennai and
scrounged there for a livelihood.
Apart from its social connotations,
rural BPO makes for tremendous
business sense. High operating costs
in cities, coupled with uncontrollable
attrition and margin pressures (on account of falling realisations and the
rupee-dollar mismatch) are forcing all
of us in the industry to do a rethink
of our business models, says Suresh

Yannamani, President & Chief Operating Officer, HOV Services.
HOV is partnering with academia
to offer a BPO module to final-year
graduate students. It is also putting
in place a rural BPO network to take
care of Level 1 work: data extraction
services like capturing account opening data for a bank, or formatting the
data captured in a marketing survey
carried out by an insurance company.
A rural BPO is also not about some
extra cash in the hands of unemployed villagers. If you really look
at it, the rural BPO salary isnt that
great. In fact, during peak season,
an agricultural labourer earns more
than Rs 150 per day, which is mar-
SRIKANTH KOLARI
ginally more than what we pay our

entry-level guys, says Manivannan
of GramIT. Of course, our salaries
arent seasonal!
Rural BPO is more about employment and wealth creation in a village.
Earlier, most rural initiatives focused
on delivering services to a village by
outsiders, but rural BPO is all about
employing the local population and
exporting services out of the village.
So, what is the cost advantage that a
rural BPO enjoys over its urban counterpart? Manivannan explains: One
obvious differential is salary (an entry-level rural BPO employee earns a
gross salary of around Rs 4,000-5,000,
which is less than half of what his
urban peers take home each month)
and the other is rental (this is difficult
to estimate because real estate prices
vary from place to place).
But the cost of extra power back-up
and last-mile connectivity in some areas offsets the cost arbitrage. Even so,
it could be 50% less expensive to run

a rural BPO than an urban one.
But the catch is that a customer
looks at the total cost of ownership
vis-a-vis the service level when it
wants to outsource a process to a
third-party, urban or rural. If they
doubt the quality of your work, no
amount of cost advantage will help
you, Manivannan concedes.
Cost arbitrage apart, rural BPOs
score over their urban counterparts in
terms of employee attrition, which is
almost non-existent. Rural BPO jobs
are a source of livelihood for most of
our employees; they view this as a
career and not just a job that earns
them a fast buck, Yannamani says.
OPENED WINDOWS: Most of the jobs are

level 1 works like data extraction services
In fact, many see this as a route to

their salvation, so the effort they put
in is much more.
Sai Seva Business Solutions, which
currently runs one rural BPO facility
in Puttaparthi (Andhra Pradesh), is
another rural BPO that has taken off.
With long-term engagements from
clients like HDFC Bank, micro-credit
firm Basix and US-based ReaSource
Info Systems under its belt, it has
grown from four employees two years
ago to 75 today.
The biggest challenge facing rural
BPOs is not HR-led but business de-
Business outsourcing management goes back to the

1830s, when the US commissioned workers in Scotland to build wagon covers and ship sails. By the 1970s,
US computer rms began to export payroll services.
47
vii
IDEA
RURAL BPO
NILOTPAL BARUAH
HELP AT HAND: Rural BPOs can stem their long march to the cities in search of jobs
velopment related, says Sais Board

Member R Sujatha, who also runs another BPO company, Trayee, in Chennai. It is a myth; there is absolutely
no dearth of talent in our villages. I
currently have 400 resumes with me,
what more proof do you need?
Significantly, Sujatha says, the
key HR challenge rural BPOs face is
grooming raw talent. An entry level
associate in an urban BPO centre becomes billable in one to two weeks; in
a rural BPO this can take up to three
months. Apart from technical skills
and written language proficiency, we
need to train them in soft skills and
social etiquette, she says.
The bigger challenge is to build a
sustainable business by expanding
the basket of service offerings and
focusing on long-term client engagements. Because rural BPO are perceived as a corporate social responsibility initiative (which it is not), our
sales cycles are longer. There arent
too many chief information officers
who understand the business of a rural BPO. That poses a big problem,
Sujatha says.
This perception, however, is beginning to change. Once your capabilities are demonstrated by consistent
delivery quality, clients will follow.
But in the initial start-up phase, the
going is not easy, Manivannan says.
GramIT was lucky in that it had
Satyam Computer as a ready client
when it started off in 2005. Satyam
48
outsourced a few of its non-core HR

and finance processes to it and, today,
GramIT works on 25 processes for Satyam. The rural BPO has also added
two reputed telecom companies, a
large FMCG firm and various government departments to its client list.
The Byrraju Foundation currently
runs four GramIT centres in Andhra
Pradesh. It plans to open six more by
the year-end, taking its total employee
headcount to 1,500.
There are more than 15-20 rural BPO
initiatives, including one incubated by
scanner. Comat is now in talks with a

domestic telecom major and a bank
to replicate this success.
Kunal Chawla, who heads Drishtees
rural BPO initiative, says his organisations focus is on digitisation services. We are looking at building a
competitive edge in this space before
the market gets crowded, he says.
Although Drishtee has just one rural
BPO centre in Bihars Madhubani
district, it is looking to replicate this
model across its other centres.
Because most of the rural BPO work
in India has been pioneered by social
organisations, a chunk of their profits are used to subsidise other rural
initiatives. Our rural BPO idea was
born out of the need to create an economic surplus for our initiatives like
healthcare services, rural education,
rural sanitation and water management. But this does not necessarily
mean GramIT is a social initiative. We
are a for-profit business and we intend to stay that way, Manivannan
points out.
On the other hand, Yannamani says
HOVs rural BPO foray was born out
of a business necessity to shift lowend work to more cost-effective locations. There were no social compulsions for usit was driven by hardcore business reasons. Even though
The challenge is to expand service offerings and

to create long-term client engagement
IIT Chennai, but most of them are pilot ventures. However, two recent entrants to this space are now attempting to scale up their operations. One
is Noida-based Drishtee and the other,
Bangalore-based Comat Technologies.
We have established proof-of-concept and are now looking to scale,
says Sriram Raghavan, Co-Founder
& President, Comat Technologies. By
using the companys existing infrastructure (rural IT kiosks in Karnataka and elsewhere that deliver a range
of rural services) during the night for
data entry work, Comat is helping an
American bank to clear cheques that
remain unprocessed by its high-speed
the idea behind Sai Seva Business Solutions was a mix of business and social factors, Sujatha says the company
is run just like any other business.
Saloni Malhotra, the 25-year-old
CEO of rural BPO firm DesiCrew,
which employs mostly women in its
eight centres in Tamil Nadu, sums it
up best. At the end of the day, business has to make sense; the social
side will automatically get fulfilled.
Rural BPO may be a still-evolving
business model, but it seems to be
slowly gaining traction. And if it can
deliver on the promised numbers,
Indian villagers could get to tap one
more avenue for employment .
IDEA
IDEA
xviii
viii
PIPED GAS
ECOSYSTEM
ASHISH GUPTA
Y MID-2009,
MID- 2009, people in
100-odd cities along the
1,440-km Hazira-Kakinada
pipeline passing through
Gujarat, Maharashtra and
Andhra Pradesh could well
be enjoying the benefits of piped gas at
home. A host of power, fertiliser and
other companies, languishing for want
of feedstock for many years, would
also benefit. Apart from maximising
production, these firms would also be
bolstering their bottomlines. All this
will happen because Reliance Gas
Transportation Infrastructure Limited
will transport some 120 million
cubic metres of gas from the newlydiscovered Krishna-Godavari Basin.
Companies across sectors in these
three states, including Torrent, Essar,
Dabhol, NTPC, KRIBHCO, Nagarjuna
Fertilisers, National Fertilizers, Arvind
Mills and Maruti will be heaving a
sigh of relief and also thanking Indian
oil majorsboth in the public and
private sectornot only for making
such discoveries, but also for creating
a network of pipelines to feed them
the potential.
Other states need not feel disheartened. Pipelines for gas transportation
to Bangalore, Mangalore, Chennai,
and Kolkata are also being planned,
in line with the gas requirements,
says a senior Reliance official.
True, the potential of gas as a source
of clean and efficient energy, and its
latent demand in an economy of the
size of India, was never in doubt.
What was holding back the country
from becoming a gas-based economy
was inadequate supply. Thankfully,
the new discoveries in the KrishnaGodavari and Mahanadi basins will
go a long way in changing the image
of India as a gas-starved economy.
Mother Lode
The KG basin is fast turning out to
be the countrys gas basin. Reliance
Industries Limited is likely to produce
nearly 80 million metric cubic metres
of gas from the basin beginning this
August. Others, too, are expected to
make significant contributions. They
50
Piping
Hot
The pipelines are pumping gas like never

before. And theres a grand design to deliver it to
industrial units and homes across the country
include Gujarat State Petroleum Corporation (20 to 25 million metric
standard cubic metres per day), Scotland-based Cairn Energy and Oil and
Natural Gas Corporation (10 to 20
mmscmd). In addition, new finds in
the Mahanadi basin by Reliance and
Niko Industries (20 mmscmd) mean
that India can gradually move towards
becoming a gas-based economy.
These discoveries, says Kumar
Manish, Associate Director, KPMG,
could double or even triple Indias
gas production from the current production (domestic and LNG combined) of 98 mmscmd. Adds Ajay
Arora, Partner with the global consulting firm Ernst & Young: Nearly
150 to 180 mmscmd of gas would be

coming up in the next five to seven
years from the new discoveries made
in the KG and Mahanadi basins. Such
significant supplies, coupled with
greater LNG imports, will provide
the necessary energy support that the
Indian economy requires to sustain
the current level of GDP growth (8%
plus), even in the next decade.
Even the Hydrocarbon Vision 2025,
the strategy paper on Indias hydrocarbons sector, projects that between
coal, oil, gas, hydel and nuclear options, only the share of gas will grow,
and that too at an impressive rate
from 7% in 1997-98 to 14% by 201011 (8% in 2006-07). It also highlights
Joining The Dots

At present, the gas ecosystem is thin and concentrated in the
North-West. Five years on, it will traverse the country
Himachal
Pradesh
Punjab
Haryana Delhi
Barmer
Assam
Jagdishpur
Jodhpur
Auraiya
Cambay Basin
Tripura
Vijaypur
Kandla
Jamnagar
Bongaon
Dahej
Hazira
Pipavav
Mumbai
High
Kakinada
Dabhol
KG Basin
Mangalore
Bangalore
Coimbatore
Kochi
Ennore
Chennai
LNG Terminals
Gas Fields
Proposed Pipelines
Gas Pipeline
Trunk Gas Pipeline
LPG Pipeline
Kuttalam
Existing Pipelines
Cauvery Basin
LPG
Other Gas Pipeline
tonnes. Piped gas from Iran and Turkmenistan (as and when it becomes
a reality) will also help in reducing
supply-side constraints.
The seven rounds of the New Exploration Licensing Policy also indicate
that there are more chances of finding oil and gas in India. In fact, some
experts believe that for a short time,
India could become a gas-surplus
state. But in the long run, whatever
the output, it will be used up.
According to the Eleventh Five-Year
GRAPHIC BY SUMEET GUPTA
the fact that natural gas is expected to

be the fastest growing energy source
for a variety of reasons, including environmental concerns, fuel diversification for energy security issues, price
and market deregulation.
Such large-scale discoveries, and
that too in new fields, which take longer to mature and will therefore enhance the possibilities of more discoveries, could not have come at a better time for Arora. With crude prices
touching record highs, the oil import
bill touching nearly Rs 2,98,432 crore
in 2007-08, and other alternatives
fuelsbiomass, solar and hydrogen
yet to take off, natural gas could well
become Indias saviour. Apart from
reducing crude import bill by substituting natural gas for naphtha, highspeed diesel and fuel-oil, it will also
lower the forex outgo and help in fiscal consolidation.
Moreover, increased imports of liquefied natural gas (LNG) from Qatar
and Australia could also help Indias
cause. Already, public sector firm
Petronet LNG is doubling the capacity
of its Dahej plant from 5 to 10 million
tonnes (by 2009) and its Kochi plant
from 2.5 to 5 million tonnes. Global
major Shell has also made provision
to increase the capacity of its Hazira plant from 5 million to 10 million
Plan (2007-12), India will need to provide 15,000 mw of power every year.
And estimates show that 1 trillion cubic feet (TCF) of gas will be required
to produce 1,000 MW of power. So,
the power sector alone will require
some 15 TCF of gas.
Transforming Industry
Using gas as a feedstock could change
the fortunes of the fertiliser industryone of the biggest consumers of
gas. Switching over to domestic gas
ga
The new discoveries in the Krishna-Godavari and

Mahanadi basins will go a long way in changing
Indias status as a gas-starved economy
51
viii
IDEA
PIPED GAS
ECOSYSTEM
Gas Is A Cheap Fuel...

Input cost to produce per million metric British thermal
Coal
Gas *
LNG
Fuel
Oil
3.5 4.2-5.7 6.1-10.1 10.5
Industrial Naphtha
LPG
15.1
16.2
* From Reliances D6 Basin
and India is discovering

more and more of it
Major gas finds in India since 2002
Reliance
GSPC
Reliance
ONGC
* Trillion cubic feet
Estimated
Reserves
(tcf) *
35
20
20
14
Area
Year
KG Basin
KG Basin
Cauvery Basin
KG Basin
2002
2005
2007
2007
Source: Industry reports
petrol or diesel-powered vehicles. For

instance, CNG emissions of carbon
monoxide are approximately 70%
lower, non-methane organic gas emissions are 89% lower, and oxides of
nitrogen emissions are 87% lower.
There are other benefits too. Being
lighter than air, CNG, unlike gaso-
A Gujarat government study shows that a switch

to gas helped industries save Rs 2,500 crore and
increased their cost-efficiency by 30%
torsfrom ceramics to pharmaceuticals, and textiles to white goodsare
all replacing traditional feedstocks
such as naphtha, ethanol and petrol
by gas.
Better Living
But it is the large-scale distribution
of piped natural gas (PNG) to households and compressed natural gas
(CNG) to the transport sector that can
change our lives for the better. While
piped natural gas for city distribution
will mean availability of cooking gas
for all, it will also go a long way in
improving the living standards of people through eco-friendly and efficient
energy. The use of CNG for transportation will also improve the quality of
life by providing a clean and pollution-free environment.
Exhaust emissions from CNG vehicles are far lower than those from
52
line, dissipates into the atmosphere

in the event of an accident. CNG fuel
systems are sealed, preventing any
spills or evaporative losses. Also, natural gas is not toxic or corrosive and
will not contaminate ground water.
In fact, Gas Authority of India Limited, which pioneered the concept of
PNG and CNG in Delhi and Mumbai
and has the biggest pipeline network
in the country, believes it can replicate the model in others cities that fall
in the catchment areas of its pipeline.
These cities would span 15 states
and have a total estimated population
of 160 million. Similarly, we will ensure that a large number of vehicles,
including public transport, will run on
CNG, says a senior GAIL official.
The extensive use of piped gas will
also free up highly subsidised liquefied petroleum gas (LPG or cooking
gas), which can then be sent to the
MANISH MARWAH
(costing between $4.2 to $5.7 per million metric British thermal units) for
feedstock will be far cheaper than the
prevailing practice of burning naptha ($12 to $16 per mmbtu), or fuel
oil ($10.5 mmbtu) or LNG ($6.13 to
$10.08 mmbtu). Coal is cheaper ($3.5
per mmbtu), but it is more polluting
than other fuels.
It will also mean greater savings for
the companies and lower subsidy cost
for the country. The fertiliser subsidy
bill has jumped from Rs 24,202 crore
(revised estimates) in 2006-07 to nearly Rs 50,000 crore (RE) in 2007-08.
And that does not include fertiliser
bonds regularly issued by the government to help fertiliser companies.
In fact, a study by the Gujarat government has shown that switching
over to gas has not only helped the
industry save Rs 2,500 crore, but also
made them 30% more cost efficient
compared to similar industries elsewhere. No wonder then, small- and
medium-sized industries across sec-
poorer section of the populationa

section that has been forced to use
coal or twigs or even kerosene, and
suffer extreme health consequences.
Now, this group of people will have a
chance to lead a more healthy life.
Moreover, since the size of a gasbased power plant is a fraction of the
size of a coal-based one, it can be set
up in the city itself, ensuring lower
transmission and distribution losses
because of its proximity to the final
point of consumption.
But to make piped gas a success,
there is a need to create a pan-India
gas distribution and transmission network, and a gas grid. Says Arora of
E&Y: A transparent regulatory environment and a strong regulator will
be the key for the overall development
of the sector. What he means is that
there is a need to provide a level-playing field for both public and private
players, and allow market determination of gas prices.
Thankfully, a regulatory board to
sort out issues regarding building
pipelines, transmission and distribution of gas, etc already exists in the
form of the Petroleum and Natural
Gas Regulatory Board.
The best thing about gas is that its
producers would find it more difficult
to form a cartel as easily as oil-producing countries (though there has
been some talk of such a possibility).
This is partly because gas-producing
countries are dispersed across the
globefrom Russia to Bangladesh,
and the trend is to ink long-term contracts running over 25 years.
So, gas will always be priced lower
than crude. And thats a good enough
reason for us to become a gas-based
economy. Add to that the green element, and you could achieve the impossiblegetting the environmentalists to smile .
As early as 400 BC,

the Chinese were using natural gas for fuel and
light. The boreholes they
drilled yielded gas and they
used long bamboo pipes to
transmit it to their homes
CORFU
3 May 2008
COSMOPOLITAN
CHIC
Dazzling, elegant, steeped in
Venetian nobility and elegance.
Corfu offers its appeal in abundance,
and leaves an indelible impression
on anyone who visits.
PHOTO: IML
Mouse Island and monastery

of Vlacherna in foreground.
OUTLOOK BUSINESS
Perennially connected to its Venetian rulers, Corfus

kantounia (narrow streets paved with cobblestones) still
reverberate with the escapades of Giacomo Casanova.
British commissioners spent many an hour here challenging
noblemen to a cricket match, and prominent European
aristocracy sought Corfus grand palaces for a summer retreat.
The French, czars from the Russian fleet, as well as Maltese
stone craftsmen whose works adorn Corfu, are just some of the
enduring symbols of the islands rich cultural legacy.
The visitor is at once enthralled by the Venetian fortresses and
the uniquely constructed, yellow-tiled buildings from the days
of the British protectorate that rise stately above the Old Town.
Corfus kantounia provide another delightful yet enduring
spectacle the Corfiot housewives daily wash perched along
windows.
Corfu in and of itself can be likened to a work of art, a painting
portraying the height of nature with a lush greenery that
envelops the island.
At the heart of Corfu lies the Spianada (Esplanade), a vast main
square lined with cafes frequented by Corfiots and tourists
alike. Waiters proudly boast that its the largest in the Balkans.
This Venetian jewel has striking fountains adorned with a lion
commemorating past nobility, and grounds modeled after the
British Royal Gardens. Liston, a huge building complex with
stone arches, is reminiscent of Paris Rue de Rivoli. The edge of
the Old Fortress southern moat houses Corfu Palace an iconic
symbol of Corfiot tourism. Justifiably so, having entertained
shipping magnates, billionaires, opera divas, world athletes and
chess champions alike.
In addition to the picturesque town of Corfu, crystal clear
blue waters and superb sandy beaches will put a spell on any
visitor. You can discover cosmopolitan beaches for some star
gazing, or isolated coastlines that lend themselves to discovery
and adventure. Travel is simple and convenient with an
extensive road network. A bustling nightlife caters to the most
demanding of partygoers. To the discerning palate, Corfus
restaurants and bistros offer an array of Greek dishes and
authentic local cuisine.
A visit to Corfu isnt complete without sampling the islands
trademark liqueur --Koum Kouat. Its unique taste will remind
you of Corfus individuality.
FLOWER OF THE EAST
Navagio Beach.
The island of poets, musicians, and artists. Serene and pleasing to all,
Zakynthos heartily embraces the visitor, and abundantly offers the most
gratifying hours of rest and relaxation alongside its crystalline waters.
akynthos has a long and rich musical tradition. You

can say, it flows in their veins. Their penchant for
music can be traced to ancient times, when the god of
music Apollo cherished the island. It is only fitting then that
the first music school to be established in Greece was here in
1815. During Venetian rule, a distinctive brand of folk music,
unique in Greece, called cantada, came about. These choral
pieces, accompanied by guitar and mandolin, withstand the
test of time. Parallel to music, theatre flourished as far back
as the 15th century. Aeschylus play The Persians made its
theatrical debut in the mid 16th century, and the first satire
surfaced as Omilies, a sort of folk theatre that townsfolk
took to. And all this creative renaissance during a time when
the Zakynthian aristocracy was listening to opera.
The dawn of the 18th century saw the creation of the
"Comedy of Pseudo-Doctors", written by Savojia Rousmeli
and considered the oldest work of dramaturgy.
Zakynthos is a cultural beacon in the middle of the Ionian
Sea. Many distinguished and celebrated poets and writers

are native sons: Dionysios Solomos Greeces national poet
Andreas Kalvos, Ugo Foskolos, and Gregory Xenopoulos,
among others. Still today, you are afforded the luxury of rare
concerts and notable performances year-round.
Locals are welcoming, love to have fun, adore music and dance,
with a strong disposition and a predilection for the arts.
Zakynthian passion extends well beyond the arts and letters to
include their homeland. They worship its surreal beaches, and
revere traditions and customs.
The town of Zakynthos offers numerous entertainment
options: tavernas and traditional cafes found in charming
villages are favorite haunts for gastronomes and tourists alike,
patrons from the four corners of the earth.
Navagio beach, or Smugglers Cove, with its white sandy
beach and clear blue waters, has taken its place among the
top beaches in the world and a must on anyones itinerary
to Greece.
3 May 2008
PHOTO: IML
ZAKYNTHOS
CEPHALONIA
PHOTO: IML
Fiskardo, view of
boats and houses
on the port.
LOVE AT FIRST SIGHT
One of a kind, proud and charming, with a distinct geographical makeup.

The island is named after the mythological figure Cephalus derived from
the Greek word for "head".
heres a plethora of attractions: the katavrothes

(swallow holes)underground beauty, the geological
wealth of Melissani Cave, the silvery cypress trees in
the north, the natural phenomenon Kounopetra (moving
rock), the Paliki peninsula, and Avitho Lake where one can
marvel at Drogaratis Cave the geological wealth of the domed
roof and its unique, captivating formation. The filming of
Captain Corellis Mandolin might have put this island on the
Western map, and received attention as a preferred vacation
spot by Madonna, but its nevertheless well known to Greeks
for unwinding along its azure waters, its mountainous
regions, and treks to the Black Mountain range the
highest land in all of the Ionian. The combination of sea and
mountain is best experienced with a trip from Argostoli to
Sami. Along the way youll discover magnificent beaches and
stunning mountain ranges. Dont miss out on Fiskardo, a hub
OUTLOOK BUSINESS
for extravagant yachts and sailing vessels, where fish taverns

routinely host the international jet set. Kourkoumelata, with
its neoclassical flavour and flower-strewn gardens, is also
worth a visit. The celebrated vineyards which produce the
white grape variety Rompola, also lay claim to the landmark
Monastery of Agios Gerasimos the islands patron saint.
Two of the most stunning and popular beaches the island has
to offer can be found near the seaside hamlet of Katelio and
Skala. Panoramic views here reward the traveler with an eyecatching glimpse of the ruins of a 3rd century B.C. building,
with its well-preserved mosaics dating back to the height
of the Roman period. Let your imagination run wild as you
make your way along the east coast from Skala to Poros,
where rugged rocky shores give way to pebbled beaches.Its
not by chance that Cephalonia has been welcoming hordes
of travelers the world over for years now.
PHOTO: IML
LEFKADA
HEAVENLY BEAUTY
Nydri, view
of the village.
Awash with contrasts, tradition, physical splendor, and some

of the most suburb beaches in the world, Lefkada has rightfully
lured millions of tourists.
he town welcomes the traveler from the very onset,

and reveals at once its distinctiveness. Lefkada is
connected to the mainland by a causeway and a
50-metre floating bridge. Agia Mavra castle overlooks the
entrance to the island, and Amoglossa, a spectacular beach
that joins the mainland with the sea, offers a first glimpse to
the magnificent coastlines one will encounter.
The island of poets and history, buried in the sands of time,
and countless scenic mountain villages that conceal unique
local architecture. Regional products gratify even the most
discerning gastronomes, not to be outdone by the crystalline
waters that take ones breath away. Lefkada caters to the
adventuresome and the low key visitor alike.
Vasiliki is a large picturesque village situated along a bay
of the same name. Exanthia is a veritable picture postcard
with colorful traditional homes. Tsoukalades is a minimalists
paradise, in stark contrast to Agios Efstratios, where an

afternoon stroll is de rigueur along its stone-cobbled narrow
pathways, where charming tavernas and cozy bars await.
Lefkada lays claim to some of the most impressive beaches
anywhere. Porto Katsiki, Egremni, and Kathisma are among
the finest, and a visit will remain etched in your mind.
Distinctive turquoise waters and sandy beaches conjure up
images of tropical destinations.
But its more than just scenic beauty that make Lefkada what
it is. Town planning here is truly a unique feature in Greece
and all of Europe. Rebuilt almost in its entirety in the wake of
a devastating earthquake, Lefkadas homes are made of wood
with iron sheet metal walls to withstand tremors. Indicative of
this structural design is the building which houses the Public
Library. Stark design and striking gates dominate the town
landscape and that of the island as a whole.
3 May 2008
PHOTO: IML
PAXI (PAXOS-ANTIPAXOS)
Paxi, Galazio bay.
JEWELS OF THE IONIAN

The two stunning tiny islands of unparalleled beauty entice travelers on
a never-ending journey for all the senses to delight in.
axi is a veritable refuge for pleasure boats and

numerous watercraft that frolic along its shores. It
tempts with a plentiful array of sparkling, pebbly
emerald beaches, both secluded and cosmopolitan, and a
verdant rugged countryside.
The natural port at Paxos is charming and picturesque, and
provides a serviceable marina. Nights can be spent along
the marina, where the two main bars provide all the revelry
needed to dance under the moonlight.
Paxos is a virtual wonderland of olive groves, and neighbouring
Antipaxos an expanse of vineyard. The eastern coasts are
smooth, in contrast with the west that is rugged with
astonishing physical formations such as caves, arches, domeshaped configurations, and sheer cliffs. Gaios, Paxos capital,
is a picturesque village built around a port sheltered by two
islets, Agios Nikolaos and Panagitsa. Scenic Lakka graces
OUTLOOK BUSINESS
the islands northern tip, while the east coast features the
enchanting village of Loggos. Telling of Paxos touristic
prosperity is the fact that a local population of approximately
2,300 inhabitants welcomes more than 200,000 visitors in
summer. In 2004, Paxos served as the Cultural Village of
Europe, an honor bestowed on communities claiming to
preserve traditions and customs. For the locals who cling to
their roots, this seemed an almost natural occurrence.
In Greek mythology, the god of the sea Poseidon created
Paxi by striking Corfu and breaking off its southern tip with
his trident in order to form Paxos, so that he and his wife
Amphitrite could have a respite. Poseidon lost his trident
in the process and it was found by the inhabitants, who
proceeded to make it the islands emblem.
Two of the finest sandy beaches, with crystalline waters, can
be found at Antipaxos Vrika and Voutoumi.
HOME OF ODYSSEUS
Harbour scene, Frices.
A breathtaking location with immense archeological and historical legacy,

Ithaki keeps to itself a multitude of secrets full of the salt of sea and
journeys to verdant mountains that defy imagination. Come to discover an
inexhaustible Greekness.
he most historic of all the Ionian Islands, it can thank

Odysseus, who after a journey filled with adversity, was
able to return to his beloved homeland. Every summer,
the capital Vathy, home to one of the world's largest natural
harbors, is teeming with sailing vessels and extravagant
watercraft that never fail to make a stop at one of the Ionians
bright blue wonders.
At the harbors entrance youll come across the famed Loutsa,
a diminutive fort built in 1807 during the second French
occupation. It smugly displays two cannons, testaments to the
islands host of European conquerors.
The Cave of Nymphs is situated north of the capital, where
Odysseus is supposed to have hidden his treasure on his
return from Troy. At Aetos mountain ridge, you can visit the
ruins of a citadel built in the 8th century and abandoned in
Roman times.
These arent the only existing remnants of island culture.

At Stavros, overlooking the bay, lies a Byzantine city in its
entirety which acted as a temple of worship for the Gods
during the Helladic period. At the Stavros Archeological
Museum situated in the main square, one can read the
engraving Dedicated to Odysseus, etched on a female face
mask, considered an important Homeric find. Anoghi, a tiny
picturesque village, the huge imposing boulders, Meniri to
locals, are a sight to regard. Of note is the striking 9 m. Irakles,
a peculiar rock formation perched on a cliff.
Beyond Ithakis historic legacy and unique archeological sites,
there lies an ideal destination for peaceful holidays amidst
turquoise waters. Sample regional fare at fine fish tavernas
sprinkled throughout the island; pay a visit to the diminutive
villages of Kioni and Agios Ioannis; and travel throughout
Ithakis unblemished landscape.
3 May 2008
PHOTO: APEIRON
ITHAKI
KITHIRA
PHOTO: IML
Kythira Hora.
THE SOPHISTICATED CHOICE

Breathe in thyme and fragrant courtyards, transport yourself, with the blue
of sea and sky as your companion, to the far reaches of your imagination.
Kythira is the subdued alternative to chaotic summer destinations.
ythira lies at the crossroads between the seas

of the Ionian and Crete, in the Mediterraneans
deepest and seemingly most impassable crossing.
The afternoon humidity that mysteriously envelops the
island and veils its beauty, in its own way, serves to shield
against the evil eye.
With tales from yesteryear, numerous would-be conquerors,
myths and customs, Kythira has a beat on the pulse of the
traveler. Shades of purple-green, scenic villages, exquisite
local dishes, and engaging churches serve as a backdrop
for journeys to any of its over 60 villages.
In the 1700s, the French were among the first to set foot
on Kythira. Renowned painter Jean Antoine Watteau
found inspiration among young lovers who boarded
galleys destined for the shores of Kythira. Watteau painted
the masterpiece Pilgrimage to Cythera in 1717, and it
OUTLOOK BUSINESS
remains a lasting depiction of this dreamland of spiritual

delight. To this day, nothing comes close to portraying this
unique islands character.
Agia Pelayia, Kapsali, and Platia Amos are must-sees. The
sun sets just beyond Chora, best viewed counting the
waves at Kapsali with a Banda Landra cocktail close by.
Gaze upward and you will be rewarded with a breathtaking
view of the Castle of Avlemonas, perched precariously
along a steep rock. The Venetian castle is a visual delight,
and a testimony to Greeces history and culture. Kythira
is tailor made for the traveler who loathes mass tourism,
crowded beaches, and restaurants. Life here is simple
and easy going, in harmony with a natural world that is
unassuming. Little by little, Kythira reveals its mystery and
allure, all the while leaving room for new discoveries.
ix
IDEA
MICRO-PENSION
SCHEMES
Bringing Them
Into The Fold

The lowering of the investment bar from Rs 500 to Rs 50
gives the poor access to a social security option
okay. I have trust in the bank that has

promoted this idea, she says.
Gauriben and Sitaben are just two
among some 45,000 women in Gujarat who have decided to squirrel
away a part of their earnings in a
micro-pension scheme that UTI Mutual Fund launched in partnership
with the Shri Mahila Sewa Sahakari
(SEWA) Bank, a micro-finance institution, in April 2006. And the idea has
the potential to surely extend beyond
Gujarat and UTI.
The Big Idea

VISHAKA ZADOO
AURIBEN PATEL, a 50-yearold vegetable vendor from

Ahmedabad, decided to opt
for a micro-pension scheme
when she witnessed her
aged mother being ill-treated by her
brothers. I am not too sure if my sons
62
will take care of me and I dont want to

be at their mercy, she says.
Sitaben Kachraji Thakore, a 38-yearold sweeper and part-time household
help, too zeroed in on micro-pension
when she realised it was the surest
hedge against financial difficulty in
old age. I know this scheme invests
my money in stock markets. That is
A micro-pension scheme is a social

security measure tailored to address
the needs of the poor who may not
have other avenues to invest in for
old age relief. It involves the contribution of voluntary savings from members over a long period. The savings
EMPOWERED: SEWA Bank has enrolled
45,000 women in the UTI scheme
SANJIT KANDU
CUT TO GROW : Reduced minimum investment amount may attract new investors
Taking In Micro SIPs

workers in India, of which only 10%,
including government workers, enjoy
organised pension benefits. The rest
do not have access to any kind of retirement planning tool due to lack of
affordable minimum deposit amounts
in savings instruments, a spokesperson of Prudential ICICI Mutual Fund
says. Assuming one out of two people
invests just Rs 100 a month in equity
funds, the total investment could
touch $5 billion every year.
But many factors have restricted
its popularity. In February 2008,
Sebi made PAN cards mandatory for
mutual fund investments. Second,
distributors are not keen to push such
low-value products. If we sell a Rs
100 SIP, we will earn only Rs 2 as commission, which is unviable, says Ravi
Agarwal of Millennium Investments, a
Mumbai-based distributor. Still, these
are teething troubles, and the numbers should go in only direction: up.
Prashant Mahesh
SHYAM KUMAR earns Rs 4,000 each

month working as a waiter in a restaurant located on Mumbais Dalal
Street. Until recently, for people like
Kumar, investing in equities would
have remained a dream. However,
with some mutual funds reducing
the minimum monthly investment
amount in systematic investment
plans (SIPs) from Rs 1,000 to Rs 100,
even Rs 50, from April 2007, now that
dream looks possible. Kumar has so
far invested Rs 1,000 in one such MF,
by paying Rs 100 a month.
SIPs entail fixed investments at
regular intervals, either monthly or
quarterly. But micro-SIPs of the kind
Kumar is investing in are an Indian
innovation. SIPs of Rs 50 and Rs 100
are unique, says Rajiv Shastri, Head,
Business Development and Strategic
Initiatives, Lotus India AMC. In developed markets like the US, the starting
amount would be $500.
There are about 370 million paid
Access Allowed
The minimum investment requirement in micro-pension
and micro-SIPs is Rs 50 per month. The saving habits of
low-income workers shows that this is within their reach.
Average Monthly Income Average Monthly Savings
1,842
233
Women
1,166
158
Urban
2,491
316
Rural
1,508
183
Men
Source: Invest India Income and Savings Survey 2007
schemes. Thus, while the population

of the elderly is growing, India has yet
to start work on offering pensions for
the unorganised sector, says Gautam
Bharadwaj, Managing Director, IIEF.
Bharadwaj was working on drafting
SUMEET GUPTA
are then invested in financial markets

by professional fund managers.
Generally, a third partymicro-finance institution, co-operative group
or a non-government organisation
acts as an intermediary between the
individual saver and the fund manager. The accumulated balance can be
withdrawn at a specified age (usually
58 or 60 years) in a phased manner,
with the balance amount continuing
to be invested in the markets.
It was not difficult for UTI Chairman
UK Sinha to be convinced about the
success of this micro-pension initiative. One pleasant February afternoon
in 2006, Sinha came to Ahmedabad
to conduct an informal survey of
SEWA members there. He was surprised at the level of financial literacy
the women of a slum displayed while
they grilled him on UTIs pension programme. Though not educated, these
women had a strong common sense
(approach to finance), Sinha says.
Soon after, Sinha launched the
scheme with SEWA Banks 25,000
women members ready to contribute
Rs 50-200 a month. For these women
who earned, on an average, Rs 1,5003,000 per month, this was the way to
financial independence in old age.
Since we started the scheme in
2006, we have had 45,000 women
who have enrolled for it. Till date,
a consolidated contribution of Rs 3
crore has been made, says Jayshri
Vyas, Managing Director, SEWA Bank.
The average three-year return that
the members have earned on their investment is about 12%. Convincing
women to contribute towards a balanced fund was not as tough as we
had imagined.
The success in Gujarat has netted
UTI nearly 90,000 pension scheme
subscribers from all over India. But
this coverage is still a fraction of the
potential market, which, according
to Invest India Economic Foundation
(IIEF), is as high as 116 million.
The number of people above 60
years of age in India will touch 198
million in 2030, compared to 47 million in 2000, according to United Nations figures. But at present, only 12%
of the working population (the organised sector) is covered by pension
the New Pension Scheme for government employees in 2005 when he realised that while the NPS intended to
include the unorganised sector also
under its umbrella, in practical terms
this could take years. Vyas too had
been thinking of helping the elderly
poor for some time. Our bank had
been giving credit to the poor for
25 years. But, when I saw that even
women who were 70-80 years of age
were coming to borrow from us, I
started to feel dissatisfied, she says.
So, Vyas and Bharadwaj, who regularly interacted with SEWA Bank,
got together to devise a scheme that
would help the poor save for retireOutlookBusiness | May 3, 2008
63
IDEA
ix
MICRO-PENSION
SCHEMES
SOUMIK KAR
The government, in
our judgement, is in no
position to provide pension
to the entire population
UK Sinha
CHAIRMAN, UTI MUTUAL FUND
Convincing women to
contribute towards a
balanced fund was not as
tough as we had imagined
Jayshri Vyas
MANAGING DIRECTOR, SEWA BANK
NILOTPAL BARUAH
ment. And, they decided to try out the

micro-pension initiative starting with
members of SEWA Bank itself.
Luckily for Bharadwaj, he was interacting with a man who had done
considerable work on pensions during his stint as a joint secretary in the
Finance Ministry. Sinha had just been
sent on deputation to UTI as its chairman. UTI then devised the current
micro-pension initiative.
Challenges Galore
But the effort came with its own set
of challenges, the foremost being how
to reduce transaction costs for largescale viability. The challenge Bharadwaj faced was in devising a plan
wherein the transaction costs could
be cut to the minimum. Making the
scheme flexible enough to allow for
meagre and irregular contributions
from its members was another.
Sinha too was of the view that involving private sector micro-finance
institutions was a good idea. The
government, in our judgment, is in
no position to provide populationwide pension. Moreover, the self-help
groups are ready for ground-level involvement with the subscribers. This
is important for sustained membership, he says.
Vyas faced another kind of chal-
64
lenge. It was in convincing the women to contribute money to a scheme

from which they could withdraw only
years later. They had to be educated
about mutual funds.
Of course, transaction costs can be
further trimmed only if more people
come into the fold, says Bharadwaj.
If there are more people, then even
the asset management company will
have a wider base of clients, which
balances the risk too, he says.
Another way to reduce costs is by
effectively using information technology. One needs to set up an IT-enabled system of record keeping and
channelling funds in the aggregate
to asset managers. As many microfinance institutions have a total life
of less than 10 years, such a system
can help in longer-term savings, says
Mukul Asher, Professor of Public Policy, National University of Singapore.
Identifying the target group is yet
another challenge, says Ashish Aggarwal, Executive Director of Invest India
Micro Pensions (IIMPs), a company
incorporated by Vyas and Bharadwaj

to do work on micro-pensions. So,
we have decided to use occupational
groups like trade unions as a proxy.
The other way is to zero-in on the microfinance customers, he says.
The next step is to convince state
governments to chip in. Employees
in the organised sector get tax breaks
on their retirement savings, but the
poor are not in the tax bracket at all.
It is only equitable if the states also
contribute towards the pensions,
says Bharadwaj.
As a start, Rajasthan, in December
2007, launched the Vishwakarma
Scheme, whereby it will contribute
up to Rs 1,000 per month for 500,000
people. The state has identified 20
occupational groups, including rickshaw-pullers, taxi-drivers, barbers and
milkmen as part of the initiative. Even
Madhya Pradesh has evinced interest
in a similar programme.
However, changes are needed at the
payout stage. The current system
exposes the elderly with no other
source of income to risks of inflation
and market fluctuations, says Asher.
The micro-pensions sector needs to
be regulated, as that will instil confidence in investors that such long-term
savings arrangements are sustainable,
he says.
Christian Haas, Director of German
development bank KfW, which gave a
Rs 2 crore grant to IIMPS to enhance
its IT efforts, is optimistic. Micropensions are now at a stage where
the micro-finance sector was 20 years
ago. Despite initial hiccups, it can be
successful on a large scale, he says.
As for Gauriben, she has now increased her monthly share from Rs
50 to Rs 200, within the span of just
two years. Sitaben too has a similar
plan. Now, I contribute only Rs 50
a month, but after my daughters are
married, I will increase my share. .
(With inputs from
Sangita Shah and Rajiv Bhuva)
In 1774, a Dutch merchant, Adrian van Ketwich,

created an investment trust thinking that diversication would appeal to investors with minimal capital.
The trusts name translated to unity creates strength
IDEA
MOBILE
WALLETS
Swipe
That
W
ANURAG PRASAD
HENEVER ANJU SNEH

goes to shop, she does
not carry her wallet
along. This 35-yearold schoolteacher in
Japans Kyoto city simply uses her cellphone to pay up. For
Anju, credit cards or cash deals have
become pass ever since her cellphone
service provider, NTT DoCoMo, started
offering its mobile wallet service in
2004. Now, Anju flashes her iMode
cellphone for everythingfrom departmental store buys to car parking to local train and movie tickets. In addition,
she also remits money to her parents in
India by just sending an SMS.
Welcome to the world of mobile
wallet or m-wallet, a cashless payment service that works by converting the cellphone into a smart card.
M-wallets serve as a handy tool for
multiple functionsas bank cards,
credit cards, house keys, swipe cards
to enter premises, electronic cash,
train tickets and much more.
In Japan and Hong Kong, these
phones come with embedded contact-less chips that commuters often
use to buy local train tickets. In Kenya, Safaricom, a Vodafone affiliate,
enables its 150,000 subscribers to deposit cash with agents and use SMS to
pay for purchases. Vodafone is likely
to introduce this concept, M-Pesa, in
India too. In Congo and Zambia also,
mobile phones are used to transfer
funds and pay for goods and bills. In
South Africa, a mobile bank, Wizzit,
provides bank accounts that may be
accessed through a cellphone. While
the local retailers use their phones as
a point of sale terminal, customers
pay for their purchases through their
Wizzit accounts.
India, on the other hand, has only
recently started offering m-wallet ser-
Mobile wallets are already a rage in
vices, that too only for customers who

have bank accounts. Abroad, this facility is used both as a mainstream
tool of convenience (for example, Japan, Korea and the US) as well as a
low-cost channel to service the nonbanked or under-banked customer
(Kenya and Zambia). In India, only
banks are allowed to maintain an ewallet. Transacting through banks
is considered safer here, says Srini
Vasu, Director and Co-Founder, BillDesk, a company that offers online
billing and payment solutions.
India does have an Internet-based
Mobile wallets originated from a universal problem:

lack of small change. When Japanese commuters
ran out of loose change at gas stations and ticket counters,
they wanted another option. The result: m-wallet
66
banking facility, which can be accessed through data-enabled handsets to purchase air, rail and cinema
tickets. This is, however, not the same
as an m-wallet. It is simply mobile
banking. A true m-wallet service has
a non-financial company like PayPal
storing funds in an e-wallet. This account may be loaded (read recharged)
from anywhere by depositing cash.
The cellphone, then, may be used to
access that money from anywhere and
for any transaction. The same concept
holds true for an account linked to a
credit card.
In India, paying for ringtones and
downloads using a pre-paid mobile
connection could be called a limited
form of m-wallet payment. Since there
is no third-party transfer of money,
it is not covered by Reserve Bank of
India (RBI) guidelines. However, that
Phone!
Japan and elsewhere. In India, the concept is all set to pick up
VIVAN MEHRA
is expected to change once the RBI

comes up with rules for mobile banking and m-wallet services, expected
any day now. Today, the Indian banking system has robust and seamless
payment systems across platforms.
And, with a cellphone user base now
in excess of 250 million, India seems
just ripe for m-wallet services.
One Mobile, Many Uses

Soon, mobiles in India will move beyond communication
services and become all-purpose payment devices
Banking
Withdraw money, make remittances and interaccount transfers
Electronic Wallet
Shopping at convenience stores and malls
E-Commerce And E-Trading
Smart Start
Internet shopping, content downloading and

online financial transactions
Train Ticket
For use as a pass and seat reservation ticket
ADMT
ONE
In fact, the then Bank of Punjab was

one of the earliest to launch an mwallet in 2002. The bank customer
could make purchases by sending
messages through the mobile phone.
The bank, in turn, would send a message confirming the purchase, both to
the merchant and to the buyer.
Later, in 2006, the Times Group,
launched Wallet365.com in association with Yes Bank. Although this
Electronic Ticketing
Admission ticket for a movie, concert or
amusement park
Membership ID
Store multiple card datagym, library and
club, among other things
Identification, Access Control

For employee or student identification, door
access and recording of check-in times
was strictly not an m-wallet service, it

permitted online money transfer, payments to businesses and shopping.
Now, the Delhi Metro Rail Corporation has started trials for m-tickets using contact-less chips. This is via a
tie-up with Citibank, which has been
providing mobile transit solutions for
the New York subway system and Singapore Metro.
During the first phase, Delhi Metro
commuters would be able to use their
Citibank cards at the turnstiles. The
next step would be to put it up on the
cellphone when the ecosystem is in
place, both in terms of software and
hardware says Vijay Ramachandran,
Marketing Director, Citibank India.
In Bangalore, train commuters can
buy platform tickets just by sending
an SMS. The subscriber gets a fivedigit alphanumeric code as the e-ticket. The charge is the same as a regular
platform ticket and the amount is deducted from the customers monthly
bill or pre-paid account.
The mobile device would be used
for person-to-person payments initially
and subsequently for person-to-merchant transactions, says Ravi Shankar, Country Head, Direct Banking,
Yes Bank. This would typically begin
as purchase of pre-paid air-time, postpaid monthly payments, utility payments and other value-added services.
Then we would slowly reach remote
and under-banked regions through
the mobile phone, he says. The idea,
Shankar says, is to enable inclusive
banking in a cost-effective manner.
Reliance Communications and
HDFC Bank recently launched the
mPay virtual credit card. This can be
used at any merchant establishment
that accepts payment via mPay. The
bank authenticates the information
with RCom, and will authorise all
payments using the customers mobile phone.
The service currently supports Reliance Mobile post-paid bill payment,
pre-paid top-ups and payment of
Reliance Energy electricity bills. It is
expected to be extended to booking
movie and travel tickets, payments at
restaurants and online shopping.
Airtel too has launched mChek for
bill payments through tie-ups with
67
IDEA
MOBILE
WALLETS
the State Bank of India, ICICI, HDFC

and Corporation Bank. We have seen
single transactions of up to Rs 1 lakh.
Through this route, we can reach all
mobile users, says Sanjay Swami,
CEO, mChek.
The company has handled almost
Rs 20 crore worth of transactions in
the last four to five months. Airtel also
has a money-remitting facility through
Western Union. It is also partnering
with IBM to create mobile wallets that
will allow subscribers to link their
credit cards, debit cards or bank accounts to their cellphone service.
These kinds of services are not free.

In the United States, the transaction
fee for m-wallet services is as little as
10 cents due to the higher volume of
such transactions. In India, however,
a revenue-sharing model is being developed, with banks, network operators and service providers getting a
share of the revenue.
Here, the fee can vary between
0.8% and 1.5% of the transaction.
If people are paying for bank drafts,
credit cards and post office money
orders, they should be willing to pay
for instant and easy form of payment
through their cellphone, says Aditya
Menon, Executive Director, Obopay
India. Obopay has tied up with Yes
AP
Pay For It
SAYONARA CASH: A phone that works as a smart card embedded with a chip.
Japanese commuters have to just tap this phone on reading devices to pay train fares
dispute-settlement mechanisms, and

reconciliation processes, among other
things, says MBN Rao, Chairman
and Managing Director, Canara Bank.
Benchmarking needs to be clearly
defined to provide comfort to customers and the facilitator, he adds.
In India, the challenge is one of
successfully handling large volumes.
Marketing these services and creating a brand would need huge invest-
Any day now, the Reserve Bank of India is

expected to issue guidelines for mobile banking
and m-wallet services, giving them a fillip
Bank, and is in talks with four other
banks for m-wallet services.
For the banks, m-banking means
more savings in cost of delivery.
Typically, an ATM transaction costs
Rs 10-18 and transactions through a
teller costs Rs 50-150. Comparatively, an m-banking transaction would
work out to less than Rs 5. For nofrills banking meant for rural areas,
payments through the m-wallet route
can come in handy.
Banks need to focus on quality of
service and customer satisfaction,
68
ments. Customers have to accept cellphones as a valid form of payment,

says Menon of Obopay India. They
have to understand that a good fraud
risk-management system is in place.
The low average revenue of the Indian cellphone user is another issue. Today, almost 85% of the mobile services market is pre-paid. That makes it
unviable for high-value transactions.
With less than $7 as the ARPU, it
would be impractical to put airline
ticketing on the pre-paid phone account, says Swami of mChek. While
post-paid bills are paid at the end of

the month, most of the billers want
immediate settlement. This makes the
process unviable, he says.
The fear of misuse is also likely to
limit the value of m-wallet transactions. Typically, these transactions
could be limited to one-tenth of the
credit card limit. Market estimates
show that, on average, for every
one rupee worth of transactions, the
stakeholders get less than 2 paise as
revenue. This means either the volumes should be really huge or customers should start using their cell
phones for high-value deals to make
it a profitable venture. Any transaction that ranges between Rs 500 and
Rs 2,000 is decent enough to support
the entire chain. If we get even 0.1%
of the $28 billion money transfer market, it would be a sizeable amount,
says Vasu of BillDesk.
The concept of paying bills using the
m-wallet sounds good, but the question is whether the newspaper vendor,
the paanwala or milk-man would be
ready to accept virtual money instead
of cash. An entire ecosystem that includes these small billers has to be
created before the idea of m-wallets
can take off in India. However, the
concept itself holds promise .
(With inputs from Rajiv Bhuva)
IDEA
xi
COMMODITIES
AGGREGATORS
SANGITA SHAH
O ANY high-profile speculator dabbling in the commodities futures market,

Purshottambhai Savsibhai
Talsania would come across
as a highly savvy investor.
This 38-year-old farmer from Mokasar
village in the Chotila taluk of Surendrangar district in Gujarat has easily
grasped the workings of the derivatives
world, thanks to a project implemented
by the Aga Khan Rural Support Program (AKRSP).
The AKRSP is a non-government
organisation (NGO) that works in association with the National Bank for
Agriculture and Rural Development
(Nabard) and the Multi Commodity
Exchange (MCX) for the betterment of
farmers in this drought-prone area.
The programme, conceptualised in
March 2007, has helped farmers like
Talsania understand the derivatives
market despite a lack of communication material in the local language.
Even so, we have managed to dis-
Cart Pool
cuss this concept with some farmers
verbally, says Keshubhai Kotharia,
the cluster manager overseeing the
project for the AKRSP in Chotila.
Talsania and many other farmers of
the area have also learned the nuances of the entire supply chain management of their produce, thanks to the
AKRSP programme.
It was a revelation. We got advance
intimation that this year our produce
will fetch higher prices because the
contracts on the exchange reflected
a bullish trend. Our group decided to
sell cotton for up to Rs 550 a quintal,
about Rs 50 higher than the previous
year, Talsania says.
72
Aggregation as a concept is
nothing new, but a renewed push
might just be the answer to many
of the problems plaguing the
agricultural sector
Under the AKSRP initiative, farmers

were permitted to sell up to a maximum of 2 metric tonnes of cotton on
the MCX platform.
Each farmer was allotted 50 maunds
(around 37.3 kilos make one maund),
just enough to learn the intricacies
of the futures market without falling
prey to heedless speculation.
This programme was meant to
give the farmers exposure to hedge
their price risk, not fall into the trap
of greed and overshoot their price
guesses, Kotharia says.
But the real gain of this initiative
was that it reiterated the power of
pooling or aggregation.
Aggregate Model
If the Chotila project is anything to go
by, aggregation is a concept that will
change the agro dynamics of the country in the next few years. Aggregation
might just be the answer to many of
the problems that have cropped up
due to the scattered and meagre land
holdings across the country.
The idea of aggregation in agriculture is not new as such. There have
been successful aggregation models
for value addition and marketing of
agricultural produce earlier as well.
The Gujarat Cooperative Milk Marketing Federationowner of the popular
brand Amul, a $1 billion enterprise
Gupta, Managing Director, National

Multi-Commodity Exchange (NMCE).
Now, aggregation has got a push
from futures exchanges, which are
working on various models of aggregation to get better price realisations
or hedge price risk. The National
Commodity and Derivatives Exchange
(NCDEX) also has started promoting
the idea of aggregation in both the
NGO and self-help group formats.
We are still fine-tuning the models,
says an NCDEX official. Federal Bank
helps rubber and pepper aggregators to trade on exchanges. Efficient
farmer cooperatives with sound accounting policies and management
can take aggregator models to much
higher levels, says M Venugopalan,
Managing Director, Federal Bank.
This aggregation effort that posits
trading as a hedge against price volatility is actively being promoted by the
regulator, the Forward Markets Commission (FMC). It aims to increase
the presence of producer hedgers in a
AWAITING THE BELL: (Left) Keshubhai Kotharia (in glasses) and Purshottambhai
Savsibhai Talsania examine cotton brought to a mandi by traders. (Above) A group of
farmers learn the nuances of cotton trading from experts visiting their village
that has 2.6 million producer-members supplying 2.4 billion litres of

milk annuallyis a prime example.
Even the co-op model of aggregation has been quite well-established
in villages for long. However, over
the years, except for big co-ops such
as the state-level and national-level
marketing federations, most have become inoperative. I think we need
to resurrect the co-operative model
as it has a precedent, says Kailash
market mostly having trader hedgers,

speculators and arbitrageurs.
We are pushing for aggregators at
all levels. At the policy level, we want
changes to allow banks to act as aggregators. And at the grassroot level,
we are holding awareness programs to
sensitise farmers, BC Khatua, Chairman, FMC says.
Globally, aggregation models for cotton growers have been successful in
Uganda where ginneries have acted
as aggregators and hedged on the futures exchanges on behalf of producers. Similarly, such a project has been
successfully implemented in Canada
for livestock management. This is
why we at the MCX decided to promote this model for aggregation,
says Lamon Rutten, Joint MD, MCX.
The Samaj Pragati Sahyog, a self help group at Bagli in Dewas (Madhya
Pradesh), has also begun exploring
possibilities of price risk-management
on the NCDEX. Over the last three
seasons, farmers of soyabean and
wheat have been able to get higher
prices for their produce.
This is the third season after we adopted the aggregation model. During
the first season, we sold 30-35 tonnes
of wheat directly to a miller, not just
saving on the logistics cost but also
realising a higher price. In the second
season, we sold 130 tonnes of soyabean to an oilseed crushing plant,
Ravi Tadiwala, the man overseeing
the operations for Sahyog, says.
The soyabean farmers also got an
opportunity to witness the power of
holding stock until the right time.
Last year, on NCDEX, we saw that
prices were on an uptrend. We held
the soyabean stocks for two months
in a warehouse, and incurred a cost
of Rs 20 per bag. Eventually, we sold
at a price that gave us a net gain of Rs
160 a quintal, Tadiwala explains.
Trading on the futures exchange
helps farmers realise that they will not
have to sell in distress, as they would
have hedged their risk, says Raghvendra Singh, Director, Cardinal Edge,
a Delhi-based private consulting firm
to NGOs operating in the farm sector.
One thing is amply clear; this new
aggregation model helps increase the
efficiency of the agricultural supply
chain and gives a better final price to
the farmer for his produce .
If Amul is a successful co-operative, some

credit goes to the Utterly
Butterly girl. Born in 1967,
to counter the sexy Polson
butter girl, that campaign
may be the longest-running
73
NAREN KARUNAKARAN
EJU, MANGELAL and

Shivlal, Gameti tribals
and school dropouts, are
beginning to make ripples in
Gogunda, a small town near
Udaipur, in the unforgiving,
dry scrubland of Rajasthans Mewar
region. The energetic trio have formed
a plumber-electrician combine. We
have already bagged nine work sites,
says Teju, the electrician, who started
his working life as a helper to a tractor
driver, earning Rs 70 a day. Today, by
stringing together wiring and other
electrical works, he takes home over
Rs 4,500 a month.
T
xii
IDEA
MIGRATION
SERVICES
Workers Without
Borders
New agencies are helping migrants enter
urban economies with more dignity by
offering training and social security
SILENT ARMY: Some

estimates peg the number
of migrants at 100 million
He is the familys youngest, earns

the maximum, and is the most educated (ninth pass) in the entire Kachaba hamlet, says an ageing Laluram,
Tejus proud father. Laluram is a
share-cropper, and his life has always
depended on the benevolence of the
rain gods in the parched region.
Mangelal, who pilots a fledgling
collective called Shree Ganesh Pipe
Fitters Group (it currently has 16
members), is an ace plumber. He had
spent many years working under different contractors, who confined him
to drudge work and never cared to
initiate him into the skills of pipefitting. We now undertake plumbing
contracts as big as Rs 16,000, says a
proud Mangelal, as if to reinforce the
groups position as the most skilled
in town.
Shivlal, the eldest of the trio, toiled
in Surat for several years as a sari
cutter and folder, until a death in the
family made him resolve never
to go great distances from his
village. After trying his hand
at housekeeping in a heritage hotel in Mount Abu, he
decided that plumbing was
his vocation.
Mobile, Invisible Populations

All three tribals are now clawing
their way out of poverty in a region
with feeble agriculture and scarce
opportunities for livelihood, which
leaves large sections of the population with no option but to migrate,
within the district, state or out of the
state. Unlike the hordes, the trio has
been lucky, for they have been able to
make a living in a town just a short
hop from their villages.
Southern Rajasthans six districts
alone account for 600,000 seasonal
migrants. In Relmagra tehsil of Rajsamand district, 2,587 of the 7,195
families bank on migration and hard
labour to keep hunger at bay. In Bamnia-Khurd, every household in the village, including that of the sarpanch,
has a member working as an ice
cream vendor in cities.
In Kotada, entire families migrate
to work as agricultural labourers in
northern Gujarat. Over 100,000 children from Udaipur, Banswara and
Dungarpur work 12 hours a day, for
three months a year, in Gujarats
Bt cotton seed farms in Sabarkantha
and Banaskanta, across the border.
Estimates of migration and migrants
in the country vary in the absence of
reliable data; the National Sample Surveys (NSS) do not capture the extent
of migration. Some estimates peg the
migrant population at 100 million.
Warped Notions
Seasonal migrants, however, remain
an invisible lot for policy makers in
the country, the bureaucracy and
even the development sector, obsessed with the old-fashioned concept
of developmentretaining people in
villages and protecting the agrarian
way of life.
This approach is absurd, says Rajiv
Khandelwal of Aajeevika Bureau. The
Bureau is a unique initiative in Udaipur that straddles the entire migration
chain from the sourcevillages in
southern Rajasthanto migration
destinations, within the state and
also outside the state.
Its an old-fashioned development
warp that still weighs heavily on our
minds. But the fact is, migration is
inevitable, and its happening, says
PHOTOGRAPHS: NILOTPAL BARUAH
Khandelwal. As a development practitioner for 16 years, he did the very

same thingseeking solutions for rural poverty in the village itself, till he
realised that very few rural lives were
actually changing.
The Bureau, which has taken up the
migration cause, provides an array of
services, training programmes and social security to the burgeoning numbers of migrants. Khandelwal wonders why migrants are treated with
Training For New Emerging Markets
Our main strength is

creating opportunities for
labour and preparing young
people to take up new
roles in the market
to make eye contact while speaking.

Fast-track, intensive, high-quality
training, in fact, has been the hallmark of Aajeevika, which believes that
those at the bottom of the pyramid
dont have the time or resources to
sit through long training sessions like
the ones given by our dismal chain of
ITIs. None of our training schedules
go beyond 30 to 40 days, says Sanjay
Chittora of the Bureau, who has been
trying to take the programmes to the
block level, closer to villagers.
Down south, LabourNet, which has
been working with construction labour, is also battling the training conundrum. LabourNet, an intermediary
of sorts between clients, builders and
construction workers in Bangalore,
has been training labour contractors,
Maistris, the lynchpin of the sector.
Rajesh Joseph, Coordinator of LabourNet, sits on a database of over
4,500 construction workers, available
on call to any builder or individual.
Joseph seconds Aajeevika: Quick,
Rajiv Khandelwal
DIRECTOR, AAJEEVIKA BUREAU
disdain when the Indian economy

its growth, infrastructure expansion,
SEZsis fashioned entirely around
mobile labour.
While the Bureau doesnt proactively encourage migration, it has been
striving to help migrants enter urban
economies with dignity. We help the
rural poor to enter cities more competitively, says Khandelwal. For instance, the Bureau has turned scores
of unkempt youngsters toiling in dhabas into housekeepers in hotel chains
like the Hilton and Rajasthans heritage palace hotels.
Its not just conventional vocations

that figure in Aajeevikas training
map. The Bureau is putting over 16
rural youthmany tribals, including
a few familiar with National Rural
Employment Guarantee Scheme work
sitesthrough the paces. In 40 days,
the small bunch will be with Hindustan Unilever (HUL) as salesmen.
These are the very boys who, until a
few days ago, found it difficult even
75
xii
IDEA
MIGRATION
SERVICES
short-term re-skilling is the way to

go. In these times, when agriculture
is failing, migration acts as a safety
valve, he says. LabourNet and Aajeevika have decided to work in tandem.
The former will handle North Indian
migrants in southern destinations,
while the latter will preside over
source issues in the North.
But training programmes for the rural youth are fraught with
challenges. The retention
rate in jobs has been a
dismal 53% for Aajeevika.
A large section of tribals,
given their dislike for regimentation, often fall back
into unskilled modes of
employment. A screening
process is now in place.
We hope to take retention to 75% shortly, says
Chittora.
and loan sharks. The breakaway loan

retires expensive loans and breaks the
cycle of bondage.
ICICI Bank, which seeded the microfinance initiative, has extended Rs
20 lakh to the RSSA. Other products
include a food loan that ensures food
and nutrition to families left behind as
migrants move to new places.
Both Aajeevika and LabourNet view
they have to devise robust revenue

models. LabourNet is working towards creating a for-profit company
that can attract social venture funding. We are already talking to three
venture capitalists, says Khandelwal,
who plans to widen the organisations
presence to a pan-India level once the
deal is through by the end of the year.
Both Joseph and he believe that partnerships with likeminded
organisations would be
the ideal way to scale up
migration services across
the country.
Khandelwal, however, is
wary of the markets imperative, and would like to
consolidate and scale up to
the state level before going
the whole hog. He is working with the Rajasthan
government to train over
2 lakh, eighth standard
Financial Inclusion
pass SC/ST students under
Aajeevika has trained and
what is called the eklavya
placed over 600 people,
scheme. For now, he would
mostly tribal youth. Over
like to strengthen his tech14,000 migrants are alnical resources and create
ready registered with the
an open source mechaBureau and the number is
nism for others of his ilk to
growing at 1,000 a month.
emulate. He is also considEach migrant is provided
ering establishing a centre
an ID card, which the Lain Orissa, which has seen
bour Department of the
an exodus of rural poor to
Rajasthan government recities in recent times.
cently endorsed. This is a NEW LIFE: Plumber Mangelal spent many years with contractors,
The other unfinished
breakthrough, as a lack of who confined him to drudge work. Now, he has a collective of 16
agenda for Aajeevika is the
migrant records has been members, and executes plumbing contracts as big as Rs 16,000
issue of rural-rural agricula major hurdle in addresstural migration, especially
ing issues besetting the community.
financial services and training as an
to northern Gujarat. The body has
This move, in one stroke, has enabled
ideal platform to scale up operations.
been unable to address the issue in a
financial inclusion of migrant hordes
LabourNet, for instance, has already
meaningful way. Its centre at Idar in
in cities and villages. Both Aajeevika
rolled out micro-insurance policies
Sabarkantha has filed over 350 cases
and LabourNet are rolling out finanfor construction labour with HDFC
in labour courts against affluent Patel
cial inclusion strategies with select
Chubb and Healing Fields, an NGO.
farmers of the region, who treat tribal
banks, enabling migrants to save,
The scheme provides cashless health
families as indentured labour. The inaccess credit and remit money. Uninsurance family cover of Rs 28,000,
creasing feminisation of migration is
til now, they were banking with the
for a premium of just Rs 450 per year.
an issue that remains untouched. Undevil, their own labour contractors,
Both these migrant-centred organitil then, Khandelwal is content with
says Khandelwal.
sations now recognise the fact that
spawning more Tejus and Shivlals .
The Bureau has seamlessly integrated financial services in its portfolio
California was built by the growth in the services
through a newly created company, the
industry, not by gold miners. Businessmen
Rajasthan Shram Sarathi Association
fed, clothed, housed and transported the migrants Levi
(RSSA.) One of its products, the breakStrauss sold pantscalled Levisto miners
away loan, is unique in its ability to
wean migrants away from contractors
76
IDEA
xviii
OIL FROM
COAL
RESERVE STRENGTH: India
is the worlds third-largest
producer of coal
IDEA
xiii
COAL TO OIL
The New Black Gold

Coal is the new crude. And India has an abundance of the
commodity, which could increase our energy security
ASHISH GUPTA
ASOL IS not a household

name, but maybe it should
be, as India and other
countries increasingly look at
alternative sources to quench
their thirst for oil. Every day,
this South African company churns
out 160,000 barrels of gasoline, diesel
fuel and jet fuel without using a single
drop of crude oilthe pricey raw
material that is getting pricier by the
day. Instead of crude, Sasol uses coal
as the raw material to meet about 30%
of South Africas energy needs.
Sasol has been converting coal to oil
since 1956. When it started doing so,
the only company and country in the
S
78
world to do so at any scale, it didnt

have a choice. An economic embargo on South Africa, brought on by
apartheid, meant it couldnt import
crude. So, it looked elsewhere, and
found coal and a technology called
the Fischer-Tropsch process, perfected
by the Germans in the Second World
War, to convert it into oil.
The cost-benefit wasnt favourable
back then, but it is today. So much
so, that even the US, China and Indiathree of the worlds top four coal
producers and massive oil importers
think this could be their breakthrough
for increasing oil self-sufficiency. All
three countries are working on mainstreaming this alternative method of
oil production, even courting Sasol.
NILOTPAL BARUAH
Tata Power has tied up with Sasol

for an $8 billion coal-to-oil project.
Apparently, the company has sought
access to 30 million tonnes (MT) of
coal per year to produce 21 MT of
oil per year and 1,500 MW of power.
Elsewhere, Reliance Industries has
asked the Centre for coal mines to
synthesise about 30 MT of oil a year.
As has the Anil Dhirubhai Ambani
Group and IOC, and a few more. The
potential of those numbers is mindboggling. An output of 51 MT per year
what Tata and Reliance are said to
be looking atis 33% of Indias total
oil production of 151 MT in 2006-07.
The Economics
Its simple economics. The capital cost
of a coal-based refineryit first converts the coal to gas (synthetic gas,
or syngas), which is then converted
to oilis about three times the cost
of a conventional, crude-based one.
IDEA
xiii
COAL TO OIL
Thats obviously unfavourable. But it

becomes favourable if the coal-based
refinery can earn a greater margin on
sales on a sustained basis. It couldnt
till 2003. It can now.
If crude is above $50 a barrel, the
coal-based producer is in business.
Today, when crude is above $100 a
barrel, Sasol is making an insane margin, prompting some South African
policymakers to call for a windfall
tax on it! Oil-based refineries, on the
other hand, will always buy crude
Sasol technology, with production

projected to increase to 4 MT by 2010
and 50 MT by 2020. China has several more such projects in the works.
In the US, coal-rich Pennsylvania has
started a pilot project worth $625 million to make diesel from waste coal
using Sasol and Shell technology.
The Issues
In India, this technology got a big
boost in January 2007, when the
three-member Investment Commis-
GASP: A gas-to-liquid plant in Ras Laffan industrial city, Qatar
at market rates, unless they are also

crude producers.
Even for crude producers, its getting difficult. A recent CLSA report
says that the age of peak oil is over.
Oil on the surface is drying up, and
companies have to dig deeper, which
means higher drilling costs. Only if
crude is above $55 to $65 a barrel
does it make sense for them to drill.
When this is read along with the everincreasing demand for oil, one thing
is clear: oil will stay on the boil. The
longer it stays so, the greater will be
the urgency to look for alternatives.
And today, the input with the maximum output potential is coal.
In China, the Shenhua Group will
start producing oil from coal in August 2008 in inner Mongolia using
80
AP
sion, set up by the Finance Ministry

and headed by Ratan Tata, recommended coal-to-oil as a feasible technology. Based on its recommendations, the Prime Minister had directed
the Planning Commission to set up an
inter-ministerial group to further examine the proposal and recommend a
time-bound plan. Even Finance Minister P Chidambaram said that India
would have to give Sasol identified
coal blocks to allow it to start doing
business in India.
At present, only two companies in

the world, Sasol and Shell, have mastered the technology to convert coal
to oil. Fischer-Tropsch synthesis is restrictive, and not given on third-party
license. That means companies have
little choice but to enter into a joint
venture either with Sasol or Shell.
Compared to crude refining, the production range of the Fischer-Tropsch
method is limited75-80% high quality diesel, 15-20% naphtha and 2-3%
liquefied petroleum only. Thats obviously a limitation, but not that much
with such high crude prices.
It takes about five years to set up
a coal-to-oil refinery (three years
for conventional projects). Says BM
Bansal, Director (Planning and Business Development), IOC: A coal-tofuel project aiming to produce two
million metric tons of diesel per annum will require an investment of $68 billion and around 4 million metric
tonnes of coal per annum.
Thats a lot of coal. While the Planning Commission estimates that Indias coal reserves can last 100 years,
others are not so sure. Leena Srivastava, Executive Director, The Energy
and Resources Institute (TERI) puts it
at 40 years. Coal should be used to
produce electricity for the masses, not
fuel, she says. There is an environmental issue also, as coal is polluting.
However, Sasol and Shell have shown
that the waste can be dealt with. The
ash can be used in cement production
and the carbon dioxide can be captured and pumped into offshore and
onshore oil and gas fields.
Another advantage for Indian companies is the flexibility to use gas. In
the coal-to-oil process, the first step is
conversion of coal to gas. Given our
increasing gas reserves, they can even
bypass the coal stage. In the emerging energy scenario, India has the raw
materials to increase its energy selfsufficiencyand reduce its dependence on an unstable world .
In 1914, Friedrich Bergius put coal dissolved in recycled oil in a vessel, and added hydrogen and iron
oxide. He raised the temperature to 400C and the pressure to 700 atmosphere. Result: petrol, diesel and oil
IDEA
xiv
WORK FROM HOME
Ho
Adva
Thanks to the Internet, some companies are letting

employees work from home, and everybody benefits
SNIGDHA SENGUPTA
ITU BHATI, mother of two,

clocks an average of 50
hours of work a week in her
job as a learning consultant
with IBM India in Gurgaon,
Haryana. She also doubles
up as a programme manager for one of
the companys intranet portals. It is a
demanding job, and sometimes her day
starts as early as 6 am, when she has to
collaborate with colleagues in Australia,
Hong Kong or the US. But Bhati does
R
82
not miss out on spending time with her

young children despite her hectic work
schedule. For the last seven years, she
has been using IBMs work-at-home
facility, which is part of a suite of half
a dozen flexible work-schedule options
offered by the company to employees
who, for varying reasons, prefer not to
work out of its offices.
Bhati is one among the 153,200 who
make up Big Blues global mobile
workforce. This constitutes about
40% of its global workforcea huge
leap from the 10,000 it had in 1995,
when the concept was first introduced in its US offices. The company
is not willing to state how many of its
73,000 people in India are currently
mobile, but the numbers, post-2004,
have gone up dramatically, says
Prathima V Shetty, India Diversity
Manager, IBM India/South Asia.
At IBM India, Bhati is one of the pioneers of the work-at-home experiment
that Big Blue introduced here as early
as 2000. I was the first mobile employee in India when we started piloting the concept. At that time we were
known as Tata-IBM, and used dialup Internet access to connect to the
office, she says. Since then, things
have become much easier due to the
leaps in communications technology.
ome
antage
time-zones and offshore locations,

would require a whole new attitude to
managing workforces. Globalisation
has created an environment that can
be defined as the new normal. This
means non-stop and expanded roles
for employees and a daily schedule
that combines work, family and other
interests between 7 am and 12 midnight, says an IBM spokesperson.
Sound Rationale
Factors such as late-night shifts, multiple time zones or simply the need to
cut out a hectic commute have seen
as many male employees as females
opt to work from home. So, for instance, at the companys remote infrastructure management division,
which spans several countries and
time zones, employees on odd-hour
shifts prefer working at home.
While work-at-home is a standard
option available to all employees
across the board at IBM India, the
concept is yet to gain ground with
many employers in India, even in the
dynamic information technology (IT)
services and business process outsourcing (BPO) sectors.
A leading BPO service provider
headquartered in Gurgaon is work-
LOCATION, LOCATION:
IBM consultant Ritu
Bhati in her office
nues are projected to touch $60 billion, and will require a workforce of
close to 5 million to achieve that target, according to Nasscom studies.
In addition, an IT worker in India
today means being part of a globally
integrated workforce that delivers
services to multiple countries across
equally diverse time-zones. While
India still offers attractive cost advantages to customers in the US and
Western Europe, it will not be easy to
hold on to that advantage if it is not
able to cut back on critical costs such
as real estate and wages. Salaries in
the last three years alone have risen
30-40%. Key hubs such as Bangalore,
Delhi and Mumbai are bursting at the
seams from over-worked infrastructure and inadequate public transport.
Win-Win Situation
Take Bangalore, for instance. If just
10% of the citys knowledge workers
started working out of home offices, it
would make a huge difference. Companies would not have to develop expensive real estate to provide workstations for these employees.
The employees, in turn, would not
have to relocate and find rented accommodation. Both factors would re-
Instead of spending two hours commuting, one

can use that time productively working at home
BHUPINDER SINGH
Faster Internet speeds, telecom infrastructure and robust security standards enable virtually any activity to
be done remotely, she explains.
With nearly seven years experience
in flexible work schedules, the company has realised that both men and
women take to such options equally.
It has less to do with gender and
more to do with convenience. For instance, instead of spending two hours
commuting, one can be more productive during those two hours if one is
working at home, says Bhati.
The cultural shift within IBM was
initiated in 2003 when it realised that
its new global delivery model, which
envisaged 24/7 delivery of services
worldwide by leveraging multiple
ing on a scheme it plans to introduce

soon. The company declined to comment as it has not firmed up its plans.
Yet, the benefits that companies can
derive from this cannot be ignored
anymore. The way organisations are
scaling up today, this is one of the
more attractive methods to help build
motivation, enhance productivity and
attract talent that may have differing
sociological demands, says Shetty.
Since 2004, growth in the Indian IT
services and BPO sectors has been
explosive, to say the least. Export
revenues have jumped from $10.4 billion to $31.4 billion as of March 2007.
The number of people employed has
swelled from 830,000 to 1.6 million.
By 2010, the industrys export reve-
duce an organisations total costs and

ease pressure on real estate prices.
Again, most of the vehicles used to
take these workers to work and back
would be off the roads. In addition,
since employees would have the comfort of working from home, retention,
which is a key concern in this space,
would be less of a concern .
The term home ofce

originated from the
homeshoring that began in
the US in 2004 when rms
started outsourcing call center work to agents who operated from their homes
83
xv
IDEA
SOLAR POWER
FOR THE POOR
Charge Of The
Light Brigade
A gaggle of solar entrepreneurs is
revolutionising the renewable energy space
at the bottom of the pyramid
NAREN KARUNAKARAN
HE UNEVEN mud walls and

the smoke-blackened thatch
of Hurji Rangas home in the
Bhil village of Kanchla in
Rajasthans Banswara district
is aglow with a new flame. Its
illuminating his life like never before.
Hurji is sitting on a technology leapfrog systema combination of thinfilm solar panels and high-efficiency
Light Emitting Diode (LED) bulbs. Its
a giant leap for himfrom kerosene
lamps to LEDs, from retiring for the
night immediately after dusk to, on
occasions, even threshing at night.
The familys future seems brighter
for his grandchildren spend longer
hours reading into the night. Earlier,
I read for less than an hour but now I
T
84
spend three hours and also teach the

others, says Rakesh, the eldest.
The unlettered Hurji remains indifferent to education and is focused on
coaxing more out of his land of four
bighas. But in the neighbourhood,
Rakam Singh, in class XI, was surprised with his fathers change in attitude. For the first time in 10 years,
he wanted to know what I was doing
and how I was faring in studies, says
Rakam. His feverish, nocturnal preparations for the exams, under LEDs,
had puzzled his father.
Power To The People

These Bhil homes are among the 78
million Indian households, or roughly
390 million lives, without access to
grid electricity. In Banswara, 1,308
families were given these systems
LIGHT, YEARS BEHIND: In Kanchla,

Rajasthan, people make a show of power
through the joint efforts of World Vision India, an international NGO and
Mumbai-based Grameen Surya Bijlee
Foundation (GSBF), which provides
solar solutions for the poor.
One of our mandates is to reduce
drop-out rates in schools. Solar lighting is a tool to achieve it, says Deepak Daniel Mohan of World Vision. He
has installed the portable Rs 3,000
lighting system in all project households, with children in high school,
under his purview. The system has
been installed at a subsidised rate of
Rs 700, even in villages with electricity under the governments massive
rural electrification drive, which is by
and large an incomplete effort.
PHOTOGRAPHS: NILOTPAL BARUAH
xv
IDEA
SOLAR POWER
FOR THE POOR
In Kanchla itself, the state electricity board had drawn electricity wires
to within a kilometre of the village in
November 2007. However, since then,
little has been done to hook up individual homes. Even if connections
were ready, few could afford them. It
costs Rs 11,000 to connect an individual home, says Mohan of World Vision. Only one farmer, Hakjee, with 26
bighas close to the last erected pole,
has secured a connectionnot for his
home, but for his water pump.
rity in rural India, a clutch of social

entrepreneurs are making significant
headway with for-profit models. With
rapid advancement in solar technology and steep reductions in costs a real
possibility, the market, experts say, is
on the verge of an explosion.
Solar module costs hover around $3
per Wp (watt peak). The talk now
is of a dramatic drop to $1 per Wp,
even by 2010, says Parimita Mohanty, Associate Fellow, Renewable
Energy Technology Applications, The
The Solar Potential

Renewables, therefore, are seen as
a solution to tide over the many
challenges that beset conventional
ways of ensuring energy access to
villages. The Centre has promised
a minimum lifeline consumption
of 1 unit per rural household per
day by the year 2012.
This can be a reality only if solar
power catches the imagination of
policymakers. A 1 MW solar plant,
for instance, can supply power to
at least 5,000 families. West Bengal has been proactively running
a solar programme in the remote
Sunderbans by using a mix of solar PV plants, from where power
is distributed through mini grids
and individual lighting systems.
In the former model, poor
households pay Rs 75 to Rs 130 a
month, close to what they would LET THERE BE LIGHT: Solar power can help 390
have paid for kerosene. Stand- million Indians without access to grid electricity
alone home units, depending
on capacity, can cost anything from
Energy and Resource Institute (TERI),
Rs 8,000 to Rs 27,000 and attract a
which is readying for a massive progovernment subsidy of Rs 2,500. In
grammeLighting Up A Million
Rajasthan, over 73,000 such systems
Liveswith the Clinton Foundation.
are operational. Dabkan in Ajmer is a
A revolution in market penetration
complete solar village!
of solar technologies is therefore exHowever, despite the sops, home
pected, especially in the rural hintersystems remain beyond the reach of
lands. What mobile telephony did to
rural folk, as their ability to pay is
telecom, solar photovoltaic, it is bepoor and their linkages with lendlieved, can do to the energy sector.
ing institutions tenuous. Sections of
Jasjeet Singh Chaddah, the IIT
the renewables bureaucracy from the
trained technocrat of GSBF, has a
states are therefore keen on subsidy
penchant for providing cutting-edge
ramp-ups. They argue that the Centechnologies to the poor. He has spent
tre can gain heavily from reduction in
over Rs 30 lakh just on R&D in the
kerosene consumption by the poor.
past three years. Chaddah says the
While the government battles with
systems cost will fall sharply as it
the subsidy conundrum and NGOs
gains critical mass.
take the charity route to energy secuSolar home systems can be sold for
86
Rs 990. Its doable, he says, even as

he transits into a for-profit model to
ensure sustainability, attract venture
funding and ramp up reach.
Laying The Groundwork

Chaddah and Harish Hande of Bangalore-based Selco Solar Lights, also an
IIT alumnus, are preparing for a major push into rural India. Selco, with
over 85,000 installations, hopes to
reach 200,000 homes in the next four
years. Turnover in 2013 is expected
to touch Rs 30 crore from about
Rs 13 crore today.
We are in the process of wrapping up venture funding in excess
of $3 million by May this year, he
says. Chaddah, with a turnover of
Rs 2 crore and over 15,000 installations across India, has an ambitious target of hawking 10,000 systems a month by the end of 2009.
Linking up the poor with microfinance institutions is something
that both are focusing on. Hande
is already partnering with SEWA
Bank in Gujarat, while Chaddah is
talking to Basix of Hyderabad.
Solar systems possess immense
potential to generate livelihoods.
Scores of entrepreneurs across the
country are making a living by
renting out solar lamps to petty
traders on a daily basis. In Hassan, Karnataka, an entrepreneur
who started out with just 10 lamps
now has a hoard of 155 lamps.
The Barefoot College in Tilonia,
Rajasthan, has already trained legions
of barefoot solar engineers (BSEs),
mostly women from rural households,
in India, and in several other developing countries. These BSEsadept at
installing, servicing and also fabricating solar systemsare preparing for
the great solar energy boom on the
horizon, across continents .
AE Becquerel discovered the photovoltaic

effect in 1839 while experimenting with an electrolytic
cell made up of two metal
electrodes placed in an electricity-conducting solution
IDEAS THE OTHER 10

IDEA
xvi
ALTERNATIVE PDS
New System Throws Up

Some Food For Thought
HYSICALLY AND fiscally unsustainable is how
the Central governments Department of Food and
Public Distribution describes the tottering Public
Distribution System (PDS).
The Indian PDS, perhaps the largest welfare measure
anywhere in the world, amounts to a food subsidy bill of
Rs 23,828 crore (2006-07). The subsidy stood at Rs 2,850
crore in 1991-92. Despite the size of the outlay, however,
a large number of the 180 million families targeted by the
system do not receive their share of foodgrains.
NC Saxena, Commissioner of the Supreme Court on
Food Security, considers the prevailing state of affairs a
mockery of the entire governmental exercise in securing
food and nutrition for millions of Indians living below
the poverty line (BPL). The PDS requires over 75 million
tonnes of foodgrain, at 35 kg per family per month. The
entitlement, however, is only on paper. In reality, the PDS
gets only 25 million.
Of this, too, diversions and leakages take away a bulk.
At the national level, the average leakage amounts to
around 36.4% of the offtake of the BPL quota. Bihar had
recorded a high of around 81.5% in diversions and leakages. Alarmed by the states inability to shore up food security, policymakers have been contemplating a number
of measures. It will be good idea to look at direct transfers or just giving cash to the poor, says Saxena.
A New Approach
While the governmental machinery battles the issue,
Deccan Development Society (DDS), an NGO in Medak
district of Andhra Pradesh, has demonstrated a viable and
sustainable alternative public distribution system (APDS),
where foodgrain production, procurement, storage and
distribution is carried out at the village level. Interestingly, the entire system is managed by women, mostly dalit,
grouped as sanghams.
The alternative PDS goes beyond food security to
a more refined concept of food sovereignty. Its not
enough to empower communities to access food. They
should also grow and consume what they want to, says
PV Satheesh, Director, DDS.
The system, which embraces coarse cereals and a variety of millets, the traditional food of the region, has
ensured food, nutrition, fodder and livelihood security to
communities who participate in the programme. It has
88
UNFAIR: The mainstream PDS has huge leakages. By

comparison, this alternative is more efficient and empowering
been proven across 50 villages, over 2,000 hectares, in the

semi-arid, south-western parts of Andhra Pradesh.
DDS believes that the rice- and wheat-driven PDS and
the continued neglect of coarse grains has serious implications for both dry-land farming and food security in the
country. The government has spent all its resources in
marginalising the most nutritive millets that people have
grown on their rainfed lands and driven it out of peoples
food systems, he says.
The APDS rests on an elaborate system to bring fallows under cultivation. The DDS extends a loan to each
member, based on the cost of low-input and organic cultivation, and the money required to convert fallows into
productive land. This amount is to be repaid in the form
of grain and cash over a period of five years, in pre-fixed
quantities and pre-fixed rates. For instance, in the first
year, a farmer will have to repay 150 kg of sorghum (jowar) and Rs 125 cash.
The grain component thus collected goes into a com-
munity grain store. Women of the sangham,

through participatory approaches of wealth
ranking, rate households in the village on a
scale of four. The destitute black card holders
receive the maximum monthly entitlement of
jowar at a subsidised rate. Accordingly, entitlements are apportionedthe landless poor
(red card holders), marginal farmers (green
card) and the small farmer (yellow). The
money received from the sale of foodgrain is
deposited in a bank as the Community Grain
Fund (CGF), which is utilised year after year
to reclaim more fallows.
Far-reaching Impact
xvii
PLASTICS
TO FUEL
Fuel From The Bin

HEN INDIAS largest private-sector enterprise
knocked on their doors, the Nagpur-based
Zadgaonkar couple, Alka and Umesh, who
were firmly rooted in middle-class ethos, was
unimpressed. They, in fact, spurned its offer to buy
out Alkas path-breaking and cost-effective technology
invention that converted waste plastics into liquid
hydrocarbons.
Instead, they quietly handed over the rights of Alkas
unique process to the Mumbai-based Asian Electronics
(AEL), which is now tweaking a massive commercialisation foray, within India and across countries.
The couple, who had been successfully running a small
five-tonne mixed-waste plastics-to-fuel plant since 2005,
was tired of years of trials, and unmet governmental
promises of support.
We knew what our limitations were. We were running
a grocery shop when the potential of Alkas invention is
truly global, says Umesh Zadgaonkar. The couple had realised that scaling up issues would have to be dealt with
by hardcore industrialists as plant design was a challenge
they were unable to surmount.
We were looking for a mid-sized company keen on
REUSE: A kg of waste plastic can produce a litre of hydrocarbons
SHAMIK BANERJEE
The result of the initiative has been remarkable. In 2002, when India faced one of the
most severe droughts in recent times, none
of the APDS villages were in stress. In fact,
some of the villages had more than they
needed, says Satheesh.
Again, in 2003, when Andhra Pradesh announced subsidised seeds for farmers, there
was a mad rush to buy them. Police had to
fire on farmers at a block near Hyderabad.
In Zaheerabad, where much of the DDS
work has been undertaken, scores of villages
were sitting on gene banks, huge quantities
of dozens of varieties of seeds. Women sanghams, over the years, have even retrieved
over 80 seed varieties on the brink.
The 50 APDS villages produce an extra 1.5
million kg of jowar every year, which translates into 3 million extra meals per year;
over 1,000 extra meals for every participating family. The fodder produced by the
newly cultivated fields sustains over 10,000
head of cattle and, in each village, 2,500 extra wages have
been created per year.
The APDS has now been expanded to the Telangana and
Rayalseema regions, and also in two districts of coastal
Andhra Pradesh.
The system has established the viability of a robust
community-driven PDS. All that is required is a one-time
investment that can banish or reduce to a great extent the
mounting food subsidies every year.
Even in harsh dryland conditions, every village community can be self-sufficient in food production and
ensure its own food security. But it must have access to
resources and credit. Once it is made available, there can
be vibrant food-producing, food-secure communities in
this country, says Satheesh.
And now for the denouement: In the mainstream PDS,
for every Rs 7 that is spent on the programme, only Re 1
reaches the ultimate consumer; while in the APDS, out of
every Rs 1.60 spent on the programme, Re 1 reaches the
ultimate consumer.
IDEA
Naren Karunakaran
AP
89
IDEAS THE OTHER 10

growing with us. We are comfortable in this partnership,
says Umesh. In addition to an 8% stake in AEL, the Zadgaonkars stand to receive 1% from product sales. And,
Green Hydrocarbons, registered in the US, Europe and
Japan, is expected to take this technology across continents, even as a number of foreign partnerships are being
cemented in the Far East and West Asia.
Payback Time
Alka, a professor of chemistry at a Nagpur engineering college, started her quest in the early 90s to perfect catalytic
additives that convert waste plastics to fuel. Her small
plant can convert an array of waste plasticsfrom carry
bags to mineral water and PET bottles, even plastics used
in computers and televisionsinto hydrocarbon fuels, with
phenomenal efficiency. A kg of waste plastics, for instance,
can produce a litre of hydrocarbons. The abundance of the
raw material, globally, makes the technology all the more
alluring. Four billion tonnes of plastic is discarded around
the world in a year. In India, the figure is 10,000 tonnes.
Now, with this partnership, a Rs 200 crore plant is being built. AEL had initially planned to set up four power
plants of 8 MW each, fired by liquid hydrocarbons produced from plastic waste, costing Rs 128 crore. With
crude breaching the $100 mark, the power plants dont
seem lucrative in the present context. Instead, AEL wants
to leverage the global crude price situation for its benefit.
The company has just signed an MoU with refining major Hindustan Petroleum Corporation (HPCL) for utilising
AEL hydrocarbons as input for the refinery. The rationale
is that the green fuel is of a much superior quality and
easier to process than crude oil. Escalating crude oil prices is a burning issue. We cannot be blind to opportunities
thrown up by the market, says Suresh Shah, CMD, AEL.
Naren Karunakaran
IDEA
xviii
DIGITAL DELIVERY
OF MOVIES
Direct To Theatre
HY DO wise men gamble in Las Vegas? The
answer, Senthil Kumar jokes, could explain why
people enter the film business. The analogy
of Senthil Kumar, whose Real Image helps
theatres deliver digital cinema, seems apt considering how
traditional film distribution works.
A Hindi filmmaker settles pragmatically for a release in
500 theatres even though there are 5,000 theatres (out of
12,000 in India) hosting Hindi movies. Thats because a
release in 5,000 screens costs Rs 30 crore, typically several
times the movies cost.
Then, most of the commercial exploitation is over in a
week, says Rajesh Mishra, CEO of Mumbai-based UFO
Moviez, another digital cinema solutions provider. The
lesser-known theatres, which get to host the movie over
90
DIGITAL MAN: Senthil Kumar

digitises theatres, enabling a
wider release of blockbusters
R A CHANDROO
the subsequent months, hardly contribute to the earningsthe fizz would have gone out and piracy would
have done its job by then.
Real Image and UFO, small intermediaries in the film
exhibition process, are betting on technology to make the
film business less risky. Until now, they have equipped
1,600 theatres (with UFO doing 1,050) with the technology to receive encrypted film content through a satellite or
fibre optic system. This immediately benefits distributors,
who bear the print costs. A digital copy sometimes costs
only about Rs 5,000, a tenth of a normal prints cost.
Thats not all. A nationwide release, which may be a
reality soon, could help filmmakers tap a wider audience
base as well as beat piracy. Theres also good news for
second- and third-rung theatres, for years caught in a trap
of high realty prices, low returns, low investments and
poor content. About 9,000 theatres are nearly in a comatose state. Most of these are in places where people dont
have any other getaway, reckons Mishra. Theres no
reason why these theatres cant woo the crowds with the
latest flicks. Unlike celluloid prints, prone to deterioration
with every use, digital copies promise consistently good
quality too.
Glocal Solution
All this wouldnt have been viable if not for the Indian
ingenuity behind the business model. It has operated at
two levels: first, a bulk of the 1,600 screens that have
gone digital have not been sold D Cinema, the high-end
digital cinema followed by Hollywood, but E Cinema.
The latter is about 10% poorer in quality, but comes at a
third of D Cinemas cost. Secondly, even E Cinema isnt
IDEA
xix
BAR CAMPS
Idea Zone
EARCH FOR link + bunch on Google and the
first page will throw up at least five results, mostly
blogs, which review a web-based application called
LinkBunch. Explore further, and you will learn that
this application enables you to aggregate multiple web links
into one short link, which makes it easier to share.
The creator is 28-year-old Aalaap Ghag, a web programmer with Mumbai-based Web 18 Software Services,
who develops such applications as a hobby. LinkBunch,
launched online in February, debuted in front of a live audience late in March at a BarCamp in Mumbai.
The term BarCamp has nothing to do with alcohol,
but everything to do with high spiritsa spirit of sharing
ideas in a free and fun environment. A BarCamp, simply
defined, is an informal forum created and used by technology enthusiasts and entrepreneurs to brainstorm on
emerging technology (usually Internet-related) trends.
The concept, which originated in the Silicon Valley in
SOUMIK KAR
cheap. Why would theatre owners shell out Rs 12 lakh

(though power costs drop to a fourth) for something that
immediately benefits only the distributors? Sensing this,
Real Image sells cinema systems against a down payment of about 10% while UFO collects a fee per show (Rs
200 from distributors and Rs 250 from exhibitors) while
retaining ownership of the systems. Both get the rights
for on-screen advertising, in some cases a bigger revenue
component than cinema solutions.
The presence of Real Image and UFO filled the business
model gap, says PS Saminathan, MD of Pyramid Saimira.
Hollywood views digital as a proper quality enhancement device unlike India, which views this purely as a
cost-saving device, he says. And that explains the business model novelty.
Sriram Srinivasan
BRAIN STORM : A BarCamp in progress at IIT Bombay
91
IDEAS THE OTHER 10

2005, eschews everything that has to do with traditional
conferencing. Yet, it harnesses so-called Web 2.0 communications tools such as wikis, blogs and social networking
to bring people together. You could liken BarCamps to
grazing fields or watering holes that help reassure participants of the worth of their existence as entrepreneurs.
And BarCamps seem like good places to foster a muchneeded entrepreneurial culture in the country.
Ever since the first one in New Delhi in March 2006,
there have been over 30 such camps across Bangalore,
Mumbai, Hyderabad, Chennai, Pune, Ahmedabad and,
even, Thiruvananthapuram. BarCamps have touched the
lives of over 4,000 peopleIT professionals, students,
first-time entrepreneurs, folks like Ghag on the brink of
entrepreneurship and academics. Indeed, BarCamps can
take the credit for being among the chief catalysts of the
second wave of technology entrepreneurship currently
underway in India.
This was my first presentation in front of an audience
and that, in itself, was a unique experience, says Ghag.
He does not know yet whether LinkBunch will lead to entrepreneurship, but getting it out into the open could be a
first step. I want to build a portfolio of products first and
then see where it goes, he says.
explosion in scale of attendance has pulled in corporate

sponsorships and media attention, thereby enforcing a
somewhat structured character to the events. It is now a
jamboree with lots of public relations, media and so on,
says Sridhar G, Co-founder and CEO of Bangalore-based
Yulop Websense Solutions, which runs a user-driven regional community networking portal. The other problem,
some veteran BarCampers point out, is that there is not
enough sharing of ideas.
It is unrealistic to expect that BarCamps will continue
to exist in the current form, five years from now. Already,
the Indian version is vastly different from the original Silicon Valley inspiration. That is a good thing and points to
the adaptability of a platform that has changed the lives
of technology enthusiasts and entrepreneurs.
Snigdha Sengupta
IDEA
xx
VERNACULAR
KEYBOARD
Keys To A Better Life
Brainstorming Bazaar
92
SRIKANT KOLARI
Yet the primary purpose of BarCamps is not to launch

new companies. Entrepreneurship, in fact, is a by-product. Around the time we launched our company, we were
looking for avenues where start-ups could connect. Platforms such as The Indus Entrepreneurs and Nasscom were
not for us because you have to achieve a little scale to
derive value from those platforms, says Amit Ranjan, who
was one of the organisers of the first camp in Delhi. Ranjan
heads the 12-member India operations of a product startup, Uzanto Consulting.
On the other hand, Bangalore-based mobile search startup Ziva Software saw BarCamp Bangalore 3 in March
last year as the ideal place to debut its flagship product
Zook. It created an immediate impact in terms of visibility for the product. The best thing about a BarCamp is that
it enables real dialogue, not politically-correct exchanges,
says founder Ajay Sethi.
Clearly, BarCamps mean different things to different
people. But the common thread uniting Ghag, Ranjan and
Sethi is entrepreneurial zeal. Yet, alluring as they may be,
BarCamps have their limits. Take Ghag as an example.
The recent BarCamp in Mumbai certainly helped him to
test the market quickly for a new product, but it will not
help him cross-over into full-time entrepreneurship. To
get off the ground, he needs exposure to a more focused
forumsuch as Proto or Headstart, which are start-up
showcase platforms that connect entrepreneurs with venture capitalists and customers, or even a TiE entrepreneur
assistance programme.
The distinction in roles, between BarCamps and forums such as Proto and MoMo, is critical today when
the former seems to be undergoing an identity crisis. The
THE TRANSLATOR: It takes only 15 minutes for people to get

familiar with the gesture keyboard
QWERTY keyboard is an innocuous computing

tool for most of us, so we can scarcely imagine the
trepidation of a villager with little or no knowledge
of English walking into a rural Internet kiosk to get
some vital crop information. A simple task like keying
in a price query can become intimidating because of the
unfamiliar English-based keyboard. And local language
alternatives (like the INSCRIPT keyboard developed by CDac) require proficiency.
Dr KSR Anjaneyulu of HP Labs explains: PC penetration in India is directly correlated to the knowledge of
IDEAS THE OTHER 10

English and the reason is that inputting an Indian script
(which is phonetic with many hundreds of characters) on
to a desktop or a notebook isnt easy.
Currently, all local language keyboards in India are
QWERTY overlays i.e. stickers are placed on top of the
English keyboard and you have to hit two or three keys to
input a single character. The process is further complicated by the fact that the local language character sticker on
the keyboard bears no resemblance to its English-sounding counterpart.
To address this problem and create a simple user interface, a team at HP Labs, headed by Dr Shekhar Borgaonkar, worked for a year to come up with what they call
a gesture keyboard, which is essentially a pen-based inputting device. This innovation is an outcome of two general observations: firstly, vast arrays of written characters
in most Indian languages are essentially modifications of
a relatively small subset of consonants and vowels. Secondly, a majority of Indiansespecially in smaller towns
and villages, as well as government departmentseven
today prefer handwritten communication.
We combined both these elements and came up with
a stylus-based prototype where all the base characters
(consonants and vowels) are arranged alphabetically on
a digitised keypad. To input a base character, all you have
to do is tap the key with the stylus. And if the base character needs to be modified (to add a maatra, for example), you just draw the modification on the base character
key with the stylusthe handwriting recognition software
reads your drawing and shows the modified character on
your computer screen.
This hybrid approach to data inputting, using a keypad
and a stylus, allows users to input characters in a familiar
and natural sequence. The process is similar to the way
writing is taught in school, notes Borgaonkar, adding
that the latest version of the product comes close to 98%
accuracy. Interestingly, the stylus also doubles up as a
mouse, enabling ease of use.
IT kiosk, browsing the web or even emailing in a local

languagethe product can do it all. This opens up a
whole new market for hardware manufacturers, as well as
service providers, he adds.
In fact, online companies like Rediff and Yahoo! have
frequently stressed on the need for easy-to-use local language keyboards to enhance Internet penetration in India.
Can HPs gesture keyboard be the answer? Its early days
yet. Official marketing for this product is yet to begin, but
the company has started bundling it with some government hardware procurement orders.
In addition, a Pune-based re-seller has already sold 500
gesture keyboards in the last year. But Borgaonkar admits that it may take three to four years for widespread
adoption. Still, he adds confidently, once volumes pick
up, the pricing differential with an ordinary English-based
QWERTY keyboard (HP Labs refuses to comment on the
price) will narrow substantially.
Nandita Datta
IDEA
xxi
TELEMEDICINE
Remote Scalpel
User-friendly Solution
If official statistics can be relied on, it takes only 10-15
minutes for a user to become familiar with the gesture
keyboard. And with a little practice, one can input 20
words per minute! Apparently, when pilot tests were
conducted at Baramati in Maharashtra, IT kiosk operators
reported a manifold increase in usage (and, hence, their
income). One operator told us his daily income from
online farmer queries (for Rs 10, a farmer can get expert
advice for any query he inputs) had gone up from Rs 40
per day to Rs 140-150 per day. And earlier, he would have
to assist these farmers in inputting their query, but now
they do it on their own, quips Borgaonkar.
Anjaneyulu believes the gesture keyboard (currently
available in Devanagari script that covers Hindi and
Marathi, as well as Kannada, Bengali and Tamil) will
allow people who have never used a PC before to start
inputting into a PC. So, whether its filling an e-application in a local language, getting information from a rural
94
DOC TUBE: An ophthalmologist watches and guides while his

counterpart in another location examines a patient
IMELY AND cost-effective intervention in healthcare

is a mirage for most of Indias poor, around 72%
of who live in its nearly 638,600 villages. It is
also a Herculean task for any government. Patchy
infrastructure and an acute shortage of doctors in rural and
tribal areas are other irritants. This makes India a perfect
case for a telemedicine-intensive healthcare system.
Telemedicine is a system of remote healthcare delivery,
where patients in far-flung areas get access to specialist
doctors who examine, monitor and treat them through
video conferencing. This system allows for the patients
medical records to be transmitted to specialists. They can
IDEAS THE OTHER 10

even be stored in an electronic format to be viewed later.
For instance, a heart patients electrocardiogram can be
sent immediately for an expert view. This can help save
a life, and that is only possible if you have a telemedicine
facility with data and voice capability, says Dr RGS Asthana, Head, Telemedicine, Max Healthcare.
The cost is negligible. It offers the right kind of diagnosis and care, says Mahesh Shetty, Director, Operations,
TeleVital, a company that offers telemedicine software.
To give a fillip to telemedicine, Rs 183 crore has been
allocated during the 11th Five-Year Plan. This is muchneeded money, even with non-governmental efforts in the
sector. On an average, a basic telemedicine set-up costs
around Rs 40,000. If advanced software and applications
are added, this could go up to Rs 4-5 lakh. Doctors have
to be at ease with the technology. It is a great tool and

would have great impact in the days to come, says Dr
Chandil of Narayana Hrudayalayas telemedicine centre.
Telemedicine can also be used for medical education,
information gathering, data mining and management of
the entire healthcare delivery system. Now, the External
Affairs Ministry has come forward to support a 53-city
pan-African telemedicine network that will be connected
to hospitals in India, including the All India Institute of
Medical Sciences and Narayana Hrudayalaya.
There are 258 telemedicine centres, with 215 remote
hospitals, including 8 Mobile units, connected to 43
speciality hospitals in India. This is serving the needs of
around 300,000 patients.
Anurag Prasad
IDEA
xxii
PAY PER USE
Click To Pay
ICTURE THIS. The English Premier League is on,
but your travelling schedule is hectic. The finals will
clash with a proposed site visit to Rajasthan. You
just have a laptop and mobile phone on you. But the
good news is you can SMS your service provider for the
match to be delivered to your mobile phone. You will be
charged just for that particular match.
And, thanks to 3G, while you are there, you can also
connect your laptop to a wireless broadband service and
pay just $4.99 to watch the latest Hollywood or Bollywood
flick, or anything else that you care to watch.
The digitisation of content has made all this possible,
and is likely the way forward. It is set to make pay-perview (PPV) an everyday concept. So, instead of paying a
flat fee for using a channel, the user has the flexibility to
pay just for the time of use.
In India, the PPV concept has only now rolled in, thanks
to direct-to-home (DTH) and conditional access system
(CAS). However, this service has been clubbed under the
movie-on-demand bouquet. Unlike in the West, where
many sports and entertainment programmes are available
exclusively through the PPV mode, India has just made a
beginning with movies.
The Fountainhead
Video-on-demand is the base As the consumer starts dictating what, when and how he wants to see a particular
programme, PPV would be introduced, says Girish Trivedi, Deputy Director (ICT Practice), Frost & Sullivan.
The primary difference between on-demand and PPV
services is in the level of interactivity. The PPV model
means a subscriber pays to watch a particular programme
at a fixed time. In on-demand services, the viewer can
fast-forward, rewind, pause and bookmark the programme, just like watching a DVD.
96
AS YOU LIKE IT: Pay-per-view will let viewers watch

programmes of their choice at their convenience
On the other hand, the current Indian DTH offering

lies somewhere in between a true PPV and on-demand
service. It does not have interactive features. It allows for
one-time payment to watch a particular movie, but the
show itself is not exclusive. The same movie is telecast on
multiple channels with staggered show timings.
Any service must have multiple subscription options.
Those who are heavy users will be happier with a flat rate
structure, while those who use such services sparingly
will find PPV more attractive, says Ravi Shekhar Pandey,
Manager, Syndicated Research, Springboard Research.
There are more than 115 million TV homes in India. Of
these, almost 500,000 are on CAS and 3.5 million homes
on DTH. Reliance Communications and Bharti Airtel are
gearing up to launch DTH and IPTV services soon.
RCom is offering 250 channels for Rs 325 through a trial
offer, under the terms of which Rs 100 worth of PPV
content is free per month. This includes movies, cookery
shows and educational content. The company has also
IDEAS THE OTHER 10

launched IPTV services in Mumbai and is expanding to
Delhi and other cities soon. We have the fibre, but cost
of customer acquisition and reaching a house is higher in
IPTV. Hence we have limited it to an invitation only offer, says an RCom official.
Bharti is awaiting more clarity on IPTV. Our IPTV offering would be for the classes and DTH for the masses.
Beginning with the metros, the phased roll-out would
start once regulatory issues are clarified, says N Arjun,
Director (Telemedia Services), Bharti Airtel.
Latent Audience
In fact, all existing and future cable and satellite subscribers are prime targets for PPV services. Also, the 250 million-plus mobile subscribers can be converted into mobile
TV viewers, and the content is likely to be PPV-based.
Already, Digital Media Convergence, a group company
of Essel Enterprises and a sister concern of Zee Television, is carving out content from its library that can be
accessed through any mobile operators network.
The pricing and type of content delivered through this
IDEA
xxiii
mode would depend on consumer behaviour. It is certain

to be a pull-based model and people would pay for exclusive content, says Ishwar Jham, Chief Executive Officer,
Digital Media Convergence.
In a cricket and Bollywood-crazy nation, content based
on cricket, movies and entertainment would be the first
bet for PPV. In fact, in 2007, Yash Raj Films tied up with
Internet broadcaster WatchIndia to offer its 18 films on a
PPV model to viewers in the US and Canada.
Aksh Optifibre too has partnered with Eros Entertainment and Shemaroo for their library of movies. It is also
planning to show the latest Bollywood or Hollywood releases when the PPV model becomes robust and the user
is willing to pay a premium to watch it with all the on-demand interactive features.
Even the satellite backbone can be used to deliver movies
directly via DTH or any set-top box. These are half terabyte set-top boxes and are very popular in Europe, says K
Krishnan, Chief Technology Officer, Hughes Communications India, which is a satellite backbone provider.
Anurag Prasad
ONLINE
EDUCATION
E-asy Learning
ANAGEMENT EDUCATION is what V Bharath, a
researcher in a Bangalore KPO, sought as a career
booster. Not keen on a sabbatical, he joined
a renowned Mumbai institute that delivered
weekend lectures via a satellite. He recently completed an
18-month PG diploma programme while keeping his job.
Beyond the Bharaths of the world, remote education
delivery is today increasingly supporting, among others,
students stumped by mathematics, engineers seeking
software testing skills, and even those requiring lessons in
selling insurance.
With the West at it for years now, theres nothing new in
whats happening in India. The novelty, however, is in the
models that are emerging, based on ground realities. Online here isnt a disruptive model, unlike the US, says
Arun Natarajan, whose Venture Intelligence India tracks
venture capital activity.
Minus some postgraduate courses, remote education
delivery hasnt really sought to replace formal education.
Chennai-based Everonn Systems, for instance, delivers
online education through a tie-up with 220 colleges and
120 schools. The target, Director R Kannan says, is 2,500
schools and colleges each in three years.
Online math tutor Heymath, in fact, relies a good deal
on content that is provided by schoolteachers. Theres
an extreme level of collaboration, asserts its co-founder
Nirmala Sankaran.
The other difference is, unlike the US, Indian online
education is still at a nascent stage. For instance, online
98
AL GEBRA: Chennai-based online tutor Heymath has invaded

the United States with weapons of math instruction
would contribute only about 5% of Educomp Solutions

revenues for 2007-08.
A glance at the US market, on the other hand, could
indicate some strength already. Like the $225 million Capella Education, which offers 950 online courses and 19
academic programmes to some 22,000 students. Or the
$140 million K12, which has 27,000 on its rolls.
Huge Potential
India shows promise, though, as remote education seems
a win-win medium. Students learn at the time of their
choice, learning is more focused, and in models such as
Heymath, the insights are from across the globe. On the
other hand, the hitherto underpaid teachers now have
Outlook Traveller Getaways Offer - Wellness Holidays in India
00
21 February 2005
IDEAS THE OTHER 10

a chance to get a good second income, as Educomps
Shantanu Prakash puts it. Educomp plans to increase its
teacher count 10-fold to 5,000 in the next two years.
Retired professors and housewives, sometimes from
small towns, are among the 600 in TutorVistas rolls.
Many wouldnt be working but for the online medium,
says its Chairman Krishnan Ganesh, whose company conducts online tutoring for overseas students.
A Viable Solution
With India reportedly facing a shortage of 200,000 schools
and millions of teachers, e-learning is an alluring option.
More so, because a school has a two-year gestation period
and comes with all sorts of operational overheads. The
National Knowledge Commission is also in favour of using
remote education delivery to boost higher education.
But the biggest drawback it faces is connectivity, or the
lack of it. And that has already forced players such as
TutorVista, which otherwise have a complete online package for foreign clients, to adopt a click and mortar model
in India. About 300 tutorial centres of TutorVista are likely
to come up in the next six months, allowing students to
access online content.
The company has experimented with such a format in
60 rural schools across South India. A mobile computer, a
projector and digitised content, all at a cost of Rs 1 lakh,
could help improve education standards, Ganesh says.
Until universal connectivity becomes a reality, this could
be the most pragmatic option.
Sriram Srinivasan
IDEA
xxiv
COMPUTER-BASED
FUNCTIONAL LITERACY
Literate in 40 Hours
F YOURE not a part of the problem or a part of the
solution, youre probably just part of the landscape. In
2000, Tata Consultancy Services (TCS) became part of
a solutiona technology solution, as is its wontto
tackle the problem of illiteracy in India.
Its multimedia approach of teaching adults to read is a
process innovation, rather than a path-breaking idea. This
innovation has made a huge difference to at least 100,000
people. For the next phase, TCS is standardising the technology, so that the government and other agencies can
apply it. When that happens, the impact of the literacy
programme will be massive. Toward this end, it has been
recommended as one of the Information Communication
Technologies (ICT) modes for the 11th Five-Year Plan.
The $4.3-billion software companys CSR initiative
in education, headed by Faqir Chand Kohli, is called
computer-based functional literacy (CBFL). We have
established a software tool relevant to literacy, says S
Ramadorai, Managing Director, TCS. Adults who attend
this programme see words of their local language on a PC
100
GETTING THE BASICS RIGHT: Participants at one of the literacy

programmes conducted by Tata Consultancy Services
monitor, and hear a recorded voice that simultaneously

pronounces each word. The word is spelt out, and pronounced by the letter and in full, with animated graphics
and related pictures in the background for visual appeal.
This audio-visual experience contributes to better postlearning retention. More importantly, it helps students
relate the correct sound with letters of the alphabet and
words in sentences. Through repeated exposure to the
graphic and sound patterns for an hour or more, over 40
days, they learn to read. It thus serves as a 40-hour literacy programmefive times less than what the National
Literacy Mission (NLM) takes to impart a combination of
reading, writing and arithmetic (with the risk of dropout).
Modest Aims
However, TCS sees itself as being complimentary to NLM
programmes. Teaching students to read is a first step to
get them interested in further learning that the NLM is
conducting, says Kesav V Nori, who, along with PN Murthy, developed the technology-based solution. In fact, the
CBFL vocabulary and content is based on NLMs teaching material. This preliminary learning enables people
to read newspapers, bus numbers, medical prescriptions,
legal papers, etc on a day-to-day basis, says Nori. Each
CBFL course has a 300-500 word vocabulary for learners in their own language, which is sufficient to enable
them to read a newspaper. It has been done across eight
Indian languages.
The computer interface has sparked off curiosity and interest among people in 1,400 centres of five Indian states,
and helped retain class strength. It has optimised classroom-time, making it less onerous for adults (most of
whom are first-time learners) to concentrate in class. The
method also helps tutors address more students because of
the 40-hour timeframe. Each computer can cater to 15 stu-
IDEAS THE OTHER 10
SRIKANT KOLARI
dents at a time. With a large projection screen, one CBFL

session will be able to handle 200 learners at a time, with
four or five tutors. Three such sessions in a day could cover about 500-600 learners; when extrapolated, TCS believes
up to 500,000 people can be made functionally literate in
two months. That is the objective.
The pace of functional literacy is significant in a country
where at least 304 million people are illiterate. Furthermore, this mind-boggling Census 2001 figure has myriad
complexities depending on age, geography, kind of illiteracy (reading/writing), and so on. Education initiatives
often face difficulties or even break down trying to address every aspect of the multi-faceted problem.
In this respect, TCS has done well to define the scope of
the problem it wished to tackle at a modest level. For instance, its target group is specifically adults. The objective
has been to teach them to read in their local language.
Expansion Plans
The results have been extremely encouraging, prompting us to prepare ourselves for the next step and expand
the program through multiple channels across the country, says Ramadorai.One way in which it is scaling up
is by deploying the CBFL solution, available on CDs, in
existing networks such as the MS Swaminathan Research
Foundations 1 lakh village knowledge centres, and at the
panchayat level.
The programme has also become part of the South African landscape (Lephalale, Northern Province), where the
TCS literacy task force developed content in a language
called Sotho. In coming months, the content, made available in CDs thus far, will also be delivered on other media
platforms, such as mobile phones and DTH (Tata Sky, for
starters) and satellite TV channels for education. CBFLs
focused approach will go a long way in spreading literacy.
Kunal N Talgeri
IDEA
xxv
ELECTRIC
VEHICLES
Plug The Cost

O ELECTRIC-VEHICLE (EV) makers website is
complete without a savings calculator. Reva Electric
Car Company, for instance, compares the running
cost of a petrol-driven car with that of its Reva EV
by stacking its average cost per kilometre (40 paise) against
that of a petrol car. So, if a user clocks, say 20 km, savings
are in the range of Rs 25,000 annually and almost Rs 80,000
over three years. Similarly, Eko Vehicles electric scooters
cost per km is touted at less than Re 0.1 per kilometre,
demonstrating huge efficiencies.
These are direct benefits for users, which, over a considerably large base can contribute to fuel conservation and
reduced carbon emissions in cities. But, since when has
N
102
PLUG N RIDE: An electric scooter tanks up at a charging

station. Its running cost works out to about 10 paise per km
that alone been enough to sell a car or bike? For good reason then, EV-makers are focusing on vehicle experience
and technology development to raise power and speed,
apart from enhanced design.
Given India Incs strengths in software, engineering and
auto components, there is also an opportunity to develop
expertise in manufacturing electric cars. Almost 50% of
the content in these cars comprises software and electronics. In fact, applications like Revas Energy Management
System monitor performance and optimise charging and
energy output of batteries to maximise operating range.
Innovation in this space is driven by technology and
product development, asserts Avinash Bhandary, Director
(Operations), ElectroTherm, which has so far sold 48,000
Yo Bykes, comprising electric cycles and electric scooters.
Over the past six months, OEMs in India like TVS Motors,
Hero Cycles and UK-based Ultra Motors have jumped into
the EV fray; they make electric cycles and scooters. General Motors, Nissan-Renault and Mitsubishi too have announced plans to launch electric cars, with GMs Chevrolet
Volt slated for a 2010 release. Reva, on the back of its intellectual property in electric vehicle technologies, has been
talking to global and Indian OEMs for collaborations.
But almost all players feel the need for a policy-level
leap of faith. You need government policy, technology
drivers and consumers to fit correctly into the equation
for electric vehicles to truly take off, says Chetan Maini,
Deputy Chairman, Reva Electric Car Company.
Kunal N Talgeri
JOURNEY OF AN
INSIGHT IDEA: BIRTH
Without an obsession with an idea, it

is difficult to create the future.
CK Prahalad
GOOD idea has the power to
change the worldthis is as
irrefutable as is the fact that
unless you do something with
that idea, it will not bear fruit.
The birth of an idea, especially the
kind that has the power to impact
and transform the lives of people, is
usually a long process that is stimulated and influenced by what goes on
around. It goes through several twists
and turns, and develops as the business jigsaw shifts and re-aligns, as do
the needs of the market.
A true pioneer is distinguished by
his far-sightedness. The pioneer will
have the ability to pick up weak signals from the future, from the ambient
noises and will be able to fold them in
today. The big idea, therefore, really
evolves when you are able to perceive
tomorrows signals as the answer for
todays needs. The solution or the
product then just follows.
We ideated the very first business
process solutions for first-time PC users in 1981. Not many people know
that in 1976-78, while Apple and IBM
had begun to focus on the home market for PCs, these were only satellite
solutions or substitutes for typewriters and word processors of that time.
Moreover, no one thought of providing personal computing solutions for
small businesses. The computer had
by then shrunk from roomfuls of magnetic tape spools to the desktop size,
Apple had enabled rapid IT infrastructure development, Intel had enabled
proliferation of IT hardware, which
suddenly became affordable for small
businesses. But the decreased cost of
hardware and the newfound ability
of small businesses to invest in IT
hardware or in IT personnel did not
translate into use of IT for the simple
reason that these businesses did not
understand IT.
We also realised that all small businesses that had the money to invest
in IT hardware were doing the same
104
SHIV NADAR w Founder, HCL
The Time
Travellers
Everything is born out of an idea. But what distinguishes
the revolutionary from the run-of-the-mill is the ability to
anticipate tomorrows needs today, and act on them
thing, following the same processes
in at least their back-office operations
such as inventory, production planning, accounts or payroll; but the service offering to match the needed utility was not available in the market.
It was difficult to create that market because our solutions would need
to be validated in the environments
these businesses were operating in
in rugged conditions, with power cuts
and heavily fluctuating voltage. They
would need to be operable on car batteries. They would also have to deliver visible and immediate business
benefits as proof of their viability.
The idea was very simple; the product was not. We created mirror-driven
software or data entry formats that
were simplified for companies to use
for their processes. The solution had
to be menu-driven, to be able to pop
up questions; it would have to have
data entry software and the ability to
operate on input.
Everything Has To Evolve

The need for a product, however,
evolves on its own, and delivering
such a complex piece did not come
easy. We could not write individual
programs, tailored to individual

needs, for each company.
But what we did was put together
basic processes such as payroll, ledgers, accounts, balance sheets, P&L;
on the supply side, purchase orders,
supply and inventory management,
and raw materials; on the consumer
side, accounts, receivables. We then
rolled these out as a base package
that would give small businesses
instant benefits for investing in IT.
These were the first ERP solutions
ever conceived of. They were of
course not even called enterprise resource solutions, at that time. HCL
put these first core tools together as
the base package and would tailor
product innovations on the basis of
customers individual needs.
Our first users too were reticent and
very reluctant because they did not
understand computing. They did not
know how to operate computers, let
alone write programs. We were also
trying to sell computers at a time
when they were perceived to be gigantic, unaffordable machines that
only specialists could operate.
HCL, therefore, became one of the
earliest companies in any industry to
in Tata Sons. But the Tatas are

a team with great determination and resilience.
The Nano is really path
breaking because it is like the
Japanese cars produced in the
1960s. In the 1950s, $5,000 cars
had no market in the US. There
were big, bulky, large guzzlers
that the Americans were into,
while the Japanese small cars
were a bunch of vehicles that
were small and could not withstand collision.
This was when petrol prices
began to rise. It was also a time
of rising inflation. Cost became
critical and, by the 1970s, small
cars had suddenly captured the
worlds imagination. This was
also the beginning of the Japanese supremacy in the automobile space.
The Nano is an idea whose
time has come; it answers
needs that have evolved over
time. It is revolutionary not
because it is the most inexpensive car, but because it redefines the boundaries between
the four-wheeler and the twowheeler market. It erodes that
barrier, or divide, and brings
a great deal of parity between
the four-wheeler buyer and the
two-wheeler buyer.
It is as path breaking as the
low-cost airlines upfront competition with the Railways.
Today, you can fly from Mumbai to Delhi for Rs 3,000. You
can get to the airport, pay the
money, fly, with no frills attached.
The Nano similarly eats right out of
the two-wheeler market space. It is
also a big idea because it will replace
many forms of transportation. Anyone
who needs to travel 20 miles will just
pick up the car and drive out. The
idea is not just the convenience, but
also the empowerment of the lower
middle-class individual.
A good idea doesnt stop just there.
The volumes and by-products would
be endless. For instance, there could
be many versions floating around the
Nano concept. Transformational ideas
will spring endless possibilities .
A true pioneer will be able to pick up weak signals

from the future, and fold them in today
give full-page and half-page ads in
national dailies, ads that really led to
the creation of the PC market in India, educating the user with a really
simple yet powerful message: Typist
Can Operate. For a company whose
turnover at that time was Rs 7 crore,
an advertising budget of Rs 70 lakh
was unheard of. However, we did deliver a win-win; our product increased
revenues for customers by 100%, giving us margins of almost 90%.
Of course, the ability to pick up the
nuances of the market and its needs
is not all. A good idea will also shake
up existing and established paradigms
and concepts. It has the power to redefine the scope and definition of existing products, competitors and even
the market space a particular product
or service caters to through sheer appeal and ability to capture the imagination of the market.
An Idea For Today

Consider the Nano: when the Tatas
moved into the auto sector, they put
together a set of JVs for Tata Components. Ratan Tata had initially wanted
to divest some of these since the business did not take off well. I know this
because I was familiar with the people
105
JOURNEY OF AN
INSIGHT IDEA: DEVELOPMENT
KISHORE BIYANI w Group CEO, Future Group
Learn, Unlearn
Relearn
Customers never fail to surprise entrepreneurs. Therefore, it
is important for entrepreneurs to prototype their ideas and
keep them open for continuous adaptation
HE YEAR was 1895. Despite his
enthusiasm, energy and wealthy
parents, King Gillette, then 40
years old, was a frustrated
entrepreneur, a bitter anti-capitalist and
a salesman of cork-lined bottle caps.
One day, while he was shaving with
a worn razor that could no longer be
sharpened, an idea struck him: what
if the blade could be made of a thin
metal strip?
The next couple of years were spent
experimenting in metallurgy, but his
first razor didnt take off. In its first
year, 1903, Gillette sold a total of 51
razors and 168 blades. His mentor,
himself an inventor, knew Gillette
wanted to be a successful entrepreneur. During a long chat, he gave Gillette the idea of inventing something
people could use and throw.
This thought stuck in the back of
Gillettes mind, and the safety, disposable razor was born. In 1999, Procter
& Gamble bought The Gillette Company for about $45 billion.
At the genesis of entrepreneurship
lies the power of an idea.
Keep The Options Open

At Future Group, we value the power
of ideas to transform society and busi-
106
ness. Big Bazaar was built on a very

simple idea: to build a retailing model
that was rooted in the way Indians
prefer to shop. It was easy for us to
copy a successful model developed
in the West, and implement it in India. Instead, we chose to combine the
look, touch and feel of Indian bazaars
with the environment of modern retail. So, we spent a huge amount of
time watching people behave in public spaces, interpreting their needs,
emotions and aspirations and, most
importantly, how, why and with
whom they go shopping.
The outcome was a retail format that
was more an agglomeration of clusters that resembled Indian bazaars. It
didnt have neat aisles, as the ones
abroad do. Instead, it had U-shaped
and L-shaped sections, it had deliberate chaos to its design and had an
ambience Indians could relate to.
An idea is about enhancing or accelerating an existing scenario. It has
to be relevant in the marketplace. For
it to be successful, it has to influence
the lives of customers. An idea needs
to appeal to a wide audience, and not
just cater to the fancy of a single individual. Coming up with a new idea,
just for the sake of it, is never good
enough. And just having one idea is

not enough to start a business.
The first step after a winning idea
is identified is to build a prototype,
and test it in a real-world scenario.
A perfect business plan or anything
that looks too good on paper always
stands the risk of encountering a sudden roadblock. Customers never fail
to surprise entrepreneurs and, therefore, it is important for an entrepreneur to prototype it and keep it open
for continuous adaptation.
A key characteristic of any entrepreneur is the willingness to learn,
unlearn and relearn. An entrepreneur
shouldnt be so passionate about an
idea that he is never able to change
or modify it. The prototype phase
of an idea should allow an entrepreneur to adapt, change and modify the
business model before the business
venture is fully rolled out. Never has
an idea been prototyped and then extended in its original form. By its very
nature, an idea has to undergo changes, improvement and adaptation.
At Future Group, we have consistently followed these steps: gather
deep insights on consumers, develop
an idea, prototype it on a smaller
scale, change and modify it accord-
ing to the requirements, and then roll

it out on a national scale. And this
method has delivered time and again
in providing innovative solutions to
customers needs and wants.
Protecting The Small Ideas

As an organisation grows, large numbers start to flow in, business models mature and acquire scale, and a
lot more people become part of the
Groupwithin our organisation with

a core proposition: protecting and preserving the soul of a small business or
enterprise within a large corporation.
This cell deals with the whole aspect
of idea creation, destructive thinking,
scenario planning activities, alternate
approaches to an issue, providing varied outcomes and solutions to problems, and handholding an activity till
its success parameters are satisfied. It
An entrepreneur shouldnt be so passionate

about an idea that he is never able to change
journey. At such a stage, one always
stands the risk of placing lesser importance on new ideas. Complacency
sets in and the very reason why an
organisation succeedsthe power of
ideasseems to sit on the backburner. Existing initiatives that bring in the
moolah attract management attention
and smaller ideas that may have longer gestation periods are often lost.
We realised this just when we were
about to enter such a phase. And that
led to the setting up of a specialised
cellInnovation and Incubation
is made up of cross-functional teams

that include design and business managers, consumer behaviour specialists,
anthropologists and ethnographers.
The team deep dives into the activity on hand, which can range from an
existing business model or category to
an entirely new concept, thereby creating multiple concoctions of observations, initial feelers and thought-provoking aspects for the task on hand.
This team has now succeeded in
driving new business ideas within
our existing businesses, as well as in
developing new initiatives that stand

the chance of becoming as large as, or
even larger than, existing businesses.
To take this initiative of developing and nurturing ideas further, both
within and outside our organisation,
we have now created a specialised
company: Future Ventures. Its objective is to partner with small and medium entrepreneurs engaged in businesses in the consumption space and
help them grow their business.
We will share our insights and understanding with these entrepreneurs,
mentor them, provide them with necessary funding and, most importantly,
allow them to be part of our ecosystem. Future Ventures will encourage
them to benefit from our scale, reach
and distribution.
It is a well-known fact that India has
huge latent entrepreneurial talent. Yet,
most of it is never utilised because
entrepreneurs often do not know how
to scale up an idea beyond a certain
size. Future Ventures will help entrepreneurs scale up. If there is an idea
worth its salt, Future Ventures will
put in everything to make it a viable
business proposition. As Victor Hugo
once said, No one can stop an idea
whose time has come .
107
JOURNEY OF AN
INSIGHT IDEA: FUNDING
HERES NO such thing as a free

lunch. This old adage, quoted
by the famous economist, Milton Friedman, can be tweaked to
theres no such thing as free water
in the Indian context. Free water in
India often spreads water-borne diseases such as cholera and diarrohea.
Over 25% of the population does not
have access to safe drinking water (the
actual percentage is closer to 65%.
The 25% relates to improved water,
which includes water provided through
canals, with rudimentary treatment like
sand filters).
Despite being one of the worlds
leading emerging economies, India
still struggles to distribute clean water to its population. Despite more
than 450,000 people dying every year
of waterborne diseases (according to
the United Nations 2006 Human Development Report), it has done very
little for its population in the area of
providing clean and hygienic water.
The business of water purification
and distribution, a highly subsidised
subset of the municipal or non-profit
organisations domain, was uncharted territory for private players on account of several financial, regulatory,
as well as political conundrums surrounding this sensitive subject. A couple of years ago, if anyone was to talk
about being in the business of water
distribution and being financially viable, the discussion was scoffed at as
a flight of imagination.
However, as well-known American
author, Robert Schuller puts it: Our
greatest lack is not money for any
undertaking, but rather ideas. If the
ideas are good, cash will somehow
flow to where it is needed. Inspired
from the real life experience of a CEO,
an innovative organisation found this
lack of willingness by other private
players as an opportunity for itself.
Out Of Africa
Led by a Ghanaian born chief executive, Tralance Addy, who himself used
to wait in line at a water tap when he
was growing up, WaterHealth International not only filled this opportunity
108
CORINNE FIGUEREDO w Senior Investment Officer, IFC
Show Me
The Breakup
While a good idea will not lack funding sources, the
structuring of finance can make or break the business
gap but also exploited it well to its advantage. WaterHealth is an exception
to the rule, both amid profit-seeking
institutions, which rebuffed the water
distribution business due to lack of
profits; and amid non-profit organisations averse to user fees.
Founded in 1996 with the primary
purpose of developing and marketing
proprietary, decentralised water purification systems, WaterHealth provides affordable potable water to under-served communities worldwide,
WaterHealth today has placed more
than 600 systems through its affiliate
partners and subsidiaries in several
countries, including over 200 systems
in various villages of Andhra Pradesh
and Gujarat. The company installs its
purification systems in association
with respective village panchayats
and treads this path because water is
such a sensitive issue.
The company charges a user fee
(that even households that earn two
dollars a day can afford), which is expected to cover all the operating and
maintenance expenses and also services the principal and interest on the
debt financing of the water purification equipment. WaterHealth International brings a successful financially
feasible model with a high element of

social additionality.
Beyond The Drawing Board

Ideas such as WaterHealth change
lives only when execution transforms
them into great businesses. The transformation of an idea into a business
plan and its actual operationalisation
is a blend of several ingredients that
go far beyond the initial idea or inventionthese ingredients include a resilient, creative management team, a
committed workforce and, of course,
financial resources.
WaterHealth started out selling water purification equipment, but did
not really begin to unlock demand
until its management had radically
recast its business model to that of a
distributed micro-water utility using a
public-private partnership model.
A hallmark of the companys success has been the managements
responsiveness and adaptability
to market needs. Particularly in its

early years, the staffs commitment to
WaterHealths vision was also key to
keep it going with limited financial
resources. The management has also
been savvy in approaching multilaterals like IFC, a member of the World
Bank Group, for assistance and pulling in strategic investors such as Dow,
that an optimal capital structure exists

which balances the risk of bankruptcy
with the tax savings of debt. However,
despite its theoretical appeal, one can
rarely accurately measure business
risk, especially with highly innovative companies. The best route is for
high-risk, innovative ventures to steer
clear of debt.
Due to lack of funding from VCs and PE funds,

early-stage companies take on debt too soon
which has just put up $30 million as a
partial guarantee to entice local banks
to lend into the micro-water utility
projects in India.
While a good idea will not lack funding sources, the structuring of finance
can make or break a good business.
The prevailing argument, originally
developed by Modigliani and Miller, is
In high-growth companies, the management is fully absorbed with operational decisions, and cash flows can
be volatile. That means loans could
look cheap upfront but will turn out
expensive if they have to be renegotiated, both in fees and penalties and
in terms of the opportunity cost of
management time, let alone the other
costs of severe financial distress.
In India, currently, many early-stage
companies take on debt too soon due
to the weak legal framework for venture capital financing and the focus of
the few Indian private equity funds on
later-stage transactions in the IT field.
There are some signs of increased investor appetite in clean-tech venture
capital, but there is still a long way
to go. That is why the International
Finance Corporation (IFC), a multilateral known mostly for its project and
corporate finance products, has begun
to invest equity in early-stage cleantech firmsin sustainable energy,
water or pollution abatement, for exampleand to look for fund partners
ready to make a foray into this space.
WaterHealth is one of our first investments and TurboTech, a turbine
company based in Bangalore, is another. Both these companies exhibit
key characteristics: the ability to create and capture value in an immense
potential market; a sustainable competitive advantage; and a management team with the resourcefulness
to respond to hurdles and to harness
opportunities for early profitability
and growth .
Figueredo was assisted by Puneet
Rustagi, Investment Analyst, IFC
109
JOURNEY OF AN
INSIGHT IDEA: EXECUTION
LARITY ON three points goes

a long way towards successful
execution of a business plan.
What are you selling? Who do
you plan to sell it to? How will you
get your product or service to your
customer? I call it the WWH principle.
Often, entrepreneurs falter because
their understanding of these three
questions has gaps.
When answering these questions,
you have to seek details, engage with
it from various angles, drill deeper.
Take the who question. Is your target audience companies, individuals,
governments? If it is companies, is
it the large-, medium- or small-sized
set? Who are the relevant contact persons in these companies? Once you
have the idea and the target customer
worked out, then comes the crucial
part of the puzzle, something that
most entrepreneurs miss out on. I call
it readiness to serve (RTS).
Pieces Of The Puzzle

RTS comes into play when you have
to figure out how to make your target customers believe that you will be
able to serve themand serve them
betterwith your idea. It cant just
be a smart line of communication or
something you will figure out along
the way. From the outset, you have
to prove to your customers that you
have RTS.
There are various elements in RTS
one has to deal with. There are issues
related to people, technology, training,
monitoring, supervision and physical distribution, among many other
things. Questions like how will you
find, hire and train people? If your offering is technology dependent, when
will you show a demo or specifications? What will be your marketing
and sales strategy? Basically, things
that show to the customer you are for
real. The journey is all about moving
from an idea to a business proposition
to a business.
Often, the idea evolves into something different than you started with.
After the plan is made, you test it.
This is the stage where you can learn
110
RAMAN ROY w Chairman, Quatrro BPO Solutions
The Readiness To
Serve Customers
Thats the prism to see everything in a business through
when trying to make the leap from a proposition to reality.
Budding entrepreneurs cannot afford to miss it.
that a lot can go wrong, and that
changes and fine-tuning are needed.
The plan may call for a pilot, in which
case you have to make assumptions,
assess whether what is being done
is scaleable and will work in a real
situation. Similarly, to determine
the success of the pilot, you need to
consider the data points and how to
monitor them.
The RTS is the most critical part
of any execution plan. For instance,
when I was setting up the BPO unit
for American Express, the RTS re-
no one else asks, and that asking for

proof and validation for the verbal answers given was an expression of distrust. Today, such redundant circuits
are the norm.
What we went through 15-18 years
ago while setting up the BPO/ITES industry was very different from what
you see today. Today, a lot of things
are taken for granted. Once you standardise things, whether in a company
or an industry, they become norms
and are then taken for granted. At one
point of time, BPOs and call centres
Every hour is a new hour. All planning is multigenerational, and one has to be nimble-footed
and keep adapting to changes in the plan
quired a redundant telecom circuit
from VSNL. This was the mid-90s,
and explaining to VSNL that we needed a circuit from the Pacific and another from the Atlantic so that at least
one worked if the other went down
was a challenge. We were told many
times that we were asking questions
in India were an idea. Now the challenges are very different, and more
linked to how to take the executed
idea to another level. Taking an idea
to the execution stage, and then allowing others to use the idea creates
competition, but it also allows the
idea to flower.
Plan B
One has to think through all possibilities, first as a plan and then through
execution. Of course, its true that you
can never think through everything.
You will always encounter situations
that will make you say, why didnt I
think of this?
years could not understand why

it would not work. A very basic
setting was wrong, and only an
expert whom we ultimately contacted cracked it. In hindsight, the
expert should have been contacted
first, but each person we spoke to
at the vendor was an expert, but
no one knew it was a switch-setting issue, which is another skill.
In another instance, a trainer
decided at the last minute not to
come to India, as he was uncomfortable taking the vaccine injections. There were 100 people hired
by us waiting to be trained, but no
trainer. Training the Indian trainers ultimately worked, but again
if we knew the issue upfront, we
would have handled it differently.
So, hiccups and roadblocks are all
in a days work.
While executing an idea, you
have to learn to live and think on
your feet. Experience does make
you wiser but, be it 15 years ago
or now, the challenges remain.
Even at Quatrro, we challenge
ourselves to think beyond the existing, be it looking at how small
and medium enterprises can leverage the opportunities in India
or those that the sub-prime crisis
might throw our way.
In all these instances, the challenge is to convert ideas into reality. The sub-prime crisis throws up
a lot of opportunities, and we are
in the process of converting some
ideas like foreclosures and state
funding of mortgages into reality.
Only time will tell how many will
work. No one has experience of
dealing with a sub-prime crisis of
this size and scale, so there are no
cookie-cutter solutions. But there
are learnings picked up over the
years. So, experience is your only
weapon, and each time it has to
be adapted and modified to suit
We once had a situation when an
the situation.
important piece of equipment was
You have to be nimble-footed to
not performing well under Indian
keep updating the plan. All planning
conditions. So, we had to work on it
is multi-generational. One has to keep
for months with the vendor, that too
adapting to changes in the plan. In
without knowing if we would get a
terms of execution, just remember:
satisfactory solution. The customer
every hour is a new hour .
(As told to Sudipto Dey)
who had used that equipment for
111
JOURNEY OF AN
INSIGHT IDEA: SCALING UP
SUNIL BHARTI MITTAL w Chairman, Bharti Enterprises
Blueprint
For A Footprint
If you have a good plan, and youre clear about how
youre going to achieve it, just make smart decisions
and keep pushing ahead with grit and determination
OST-1991, economic reforms
were clearly changing the
business landscape in the
country. Telecom was among
the first few sectors to be touched by
the first wave of reforms. But Bharti
was too small a company for the big
opportunity that was emerging in
telecom. Still, undeterred by our size,
we were out there competing with
the big names in the Indian corporate
sector, vying to be among the first
mobile operators in the country.
After a long-drawn legal battle,
Bharti won the Delhi circle licence,
much to the surprise of many. We
launched our mobile service in Delhi
in 1995, despite being short of funds
for the capital-intensive business that
mobile telephony is. Many doubted
our ability to last the distance. Looking back, I must admit, it was truly a
brave decision.
We made some really smart moves
in the early years, and most importantly, remained undaunted by the
shallowness of our pockets. We were
clear in our minds about what we
wanted to achieve: to be an integrated
telecom player having a footprint in
112
both the mobile and fixed-line businesses. Mind you, this wasnt an easy
decision because our revenues were
not big, while our investments were
huge and front-loaded.
Many considered our decision to
be an integrated player more bravado than any well-conceived strategic idea. Though we were not really
perturbed by the perception around,
we had enough reasons to be worried by the slow growth of the sector
in the country. By 1999, Bharti had
little to show beyond its cellular presence in Delhi and Himachal Pradesh
and a fixed-line business in Madhya
Pradesh. This period also turned out
to be one of the most turbulent for the
telecom industry, and most experts
were writing the industrys obituary.
But we managed to weather the storm
with grit and determination. I believe
this was a key moment in scaling up
the business towards success.
The Second Phase

Despite our capital constraints, we
kept pushing ahead through acquisitions, and by early 2001, Bharti had a
footprint stretching across six circles.
At this point, we took our next big decisionexpanding into all the circles
in the country. Obviously, we needed
more capital to fund this ambitious
plan. Interestingly, this was the time
when our early investment partners
decided to make an exit (more because of developments in their home
countries than anything else). But,
we managed to find new world-class
partners in Singtel and private equity
investors like Warburg Pincus to fund
our expansion. Here, I must state that
our principle of abiding by the highest standards of transparency has given us the best of business partners,
and no one has ever lost money while
working with us.
leaders in their respective business,

the deals generated a fair amount of
scepticism among experts who felt
that giving your network and IT applications to outside experts to manage was like giving the heart of your
business to an outsider.
The deals, however, proved to be
path-breaking innovations that helped
lower costs, and more importantly,
created a more predictable cost structure for us. The new model has, in
fact, gone on to set new standards for
the industry globally.
Buoyed by the success of our network and IT outsourcing deals, we
tried to transform our business model
further by outsourcing our customer
Coming through trying times has

been critical in our journey from
mere promise to greatness
The national rollout plan had huge

implications in terms of people. In
2001, we were required to add 4,000
new employees in a matter of four
months. The scale-up target was phenomenal, particularly in view of the
fact that we were planning these additions on an existing headcount of
2,700. To me, it was the most critical
phase in Bhartis journey from a company with promise to being a truly
great company.
The next big challenge arrived with
the backdoor entry of CDMA technology into the Indian wireless market.
We had some formidable competitors in the shape of Reliance and the
Tatas. GSM players like Bharti were
clearly at a disadvantage. The Bharti

ship did rock a bit at this point, but
settled down quickly.
Partnering With Experts

While in the process of scaling up for
national play, we also saw a great opportunity to restructure our business
model. As part of this exercise, in
early-2004, we decided to outsource
two key elements of our business
network management and IT applications. We inked first-of-their-kind network management deals with equipment manufacturers Ericsson, Nokia
and Siemens, and an IT outsourcing deal with IBM. Despite the fact
that all these companies were global
service function. It was outsourced to

four world-class operators: IBM-Daksh, Mphasis, Teletech Services and
Hinduja TMT. The technology platform for this operation came to be
managed by Nortel, another global
technology leader. With this customer service innovation, Bharti virtually
redefined the customer service paradigm in the telecom space.
Over the years, Bharti Airtel has consolidated its number one position in
the country with more than 62 million
customers. The company has now
moved beyond Indian shores to the
Seychelles and the Channel Islands,
and will soon be launching services
in Sri Lanka, our southern neighbour.
The fifth largest single-country mobile
operator in the world is clearly getting
ready for global play.
Scalability of a business idea remains a prime consideration for us.
Our other initiatives, in the insurance, agriculture and retail sectors,
are based on our learning from the
scaling-up exercise of our telecom operations. I see rapid growth opportunities in these businesses. We intend
to script a telecom-like success story
in these areas as well .
113
CHANGE
INSIGHT AGENTS
YC DEVESHWAR w Chairman, ITC
Triple Bottom
Line Approach
ITCs agri and paperboards businesses turned the corner
through a great transformational idea: of becoming
globally competitive by empowering entire value chains
TCS TRANSFORMATIONAL
journey through the mid-nineties
into the nation-oriented, multibusiness conglomerate that it is
today is a story of powerful innovation,
an abiding vision to enhance the
development of society through
unique corporate strategies, and the
perseverance to take the road less
travelled to achieve these goals.
Having had the privilege of leading
the organisation over these challenging but exciting years, there is a secret
that I can share with you today. Our
corporate strategy, which uniquely
synergises business objectives with
a larger sense of social purpose, was
born as much out of an inspiring vision as of necessity.
Empowering Farmers
When I took over as Chairman of ITC,
two of our businesses were facing
tremendous competitive pressures,
perhaps even the threat of closure.
The agri-business, which back then
concentrated largely on agri-exports,
was floundering in the face of competition from large, international companies, which had wider options for
risk management and arbitrage. The
114
paperboards business, then residing

in ITC Bhadrachalam Paperboards,
was also surrounded by adversity.
While it had survived financially in
a closed economy, despite an uneconomic scale compared to global
benchmarks, the opening up of the
economy brought down customs
duties drastically, exposing it to the
rigours of international competition.
The choice, according to the financial community, analysts and a section of shareholders, was clear. Shut
them down and cut your losses,
they said. We disagreed. Today, with
many years of perseverance and conviction, we are proud that we could
prove the cynics wrong. Behind these
two amazing turnaround stories lies
a great transformational idea: of becoming internationally competitive by
empowering entire value chains.
Imagine going rural with information technology to bring to villagers
the power of the cyberworld. Better
still, imagine teaching tribals to grow
trees to support Indias largest valueadded paperboards business. With
ITCs e-Choupal and social forestry
programmes, we set about to create
new hopes for rural India, embedding
a new source of competitive advantage to our businesses.

The e-Choupal initiative is a powerful illustration of the potential of
information technology to transform
the rural economy, notwithstanding
the structure and size of land holdings in India. This alternative model
leverages the power of the Internet
to empower the small and marginal
farmer with a host of services related
to know-how, best practices, timely
and relevant weather information,
transparent discovery of prices, and
much more. This digital infrastructure
can also be used to channelise services related to credit, insurance, health,
education and entertainment. It can
also serve as a strong foundation for
linking small and marginal farmers
to futures markets to facilitate farmer

risk-management.
The ITC e-Choupal is not just a village digital kiosk with a human interface. The access to e-Choupals, within
walking distance from the farm gate,
is supplemented through physical
infrastructurethe ITC Choupal Saagarwhich functions as a hub for a
cluster of villages within distances
that can be covered with a tractor.
These made-to-design hubs also serve
as warehouses and rural hypermarkets for a variety of goods.
In effect, the e-Choupal infrastructure is potentially an efficient delivery
channel for rural development and
an instrument for converting village
populations into vibrant economic organisations. An environment rife with
illiteracy, lack of basic infrastructure

and low incomes makes the rollout
of this initiative extremely challenging. Despite daunting implementation
challenges, the potential benefits of
this project have spurred ITC to seek
innovative solutions to overcome
these constraints.
This rural infrastructure project
now comprises about 6,500 installations covering nearly 40,000 villages
and serving about four million farmers. Over the next seven to 10 years,
it is ITCs vision to create a network
of 20,000 e-Choupals, thereby extending coverage to 100,000 villages
representing one-sixth of rural India.
This networked rural delivery system
can contribute significantly towards
addressing the knowledge deficit
ganises them into self-supporting forest-user groups. Leveraging in-house

biotechnology capability, ITC makes
available high-yielding, disease-resistant clonal saplings. A comprehensive package of training and extension services is provided to the user
groups, facilitating the adoption of
best silvicultural practices to meet the
needs of both commercial pulpwood
and fuelwood.
The pace and scope of this initiative have rapidly expanded over the
last few years. So far, more than 300
million saplings have been planted
over 77,000 hectares under the farm
and social forestry programmes. The
growing competitiveness of ITCs paperboards business and its increasing
market strength provide the impetus
The e-Choupal is an instrument for

converting village populations into vibrant
economic organisations
highlighted so forcefully by
the National Commission on
Farmers. It can also meaningfully complement the Bharat
Nirman initiative of the government, towards truly securing a new deal for rural
India. The transformational
impact of this pioneering initiative continues to earn global and domestic accolades.
Tree Of Life
The promotion of the woodbased industry carries the
potential to make a vital contribution towards the creation
of rural livelihoods and the
restoration of ecological balance. ITCs presence in the
pulp-based value chain provides the basis for a significantly enlarged contribution
by developing wastelands
through the promotion of
agro forestry. In partnership
with NGOs, the government
and the rural community, ITC
identifies poor tribals with
private wastelands and or-
for the company to scale up the afforestation endeavour to cover over

100,000 hectares by planting 600
million saplings over the next few
years, in the process creating about
40 million person days of employment among the disadvantaged. Such
a scale has already positioned ITC as
a carbon-positive enterprise. ITCs afforestation endeavour, together with
other energy conservation measures,
has enabled the company to sequester
nearly twice the carbon dioxide emitted by its operations.
This commitment beyond the market shapes the quality of ITCs partnerships with the various constituents
of its value chainsfarmers, suppliers, employees and the state. Such a
commitment propels ITC to contribute
far beyond servicing financial capital
to enlarging economic, social and environmental capital for the nation.
This unique spirit of synergising
business objectives with a larger sense
of social and environmental purpose
is what we call a triple bottom line
approacha powerful idea that has
inspired ITCs transformation and is at
the core of its business strategies .
115
IDEAS FOR THE
INSIGHT NEW WORLD
The shift
is towards
co-created
innovation
It annoys management thinker CK
Prahalad that Indians usually fail to
acknowledge innovations in their own
land. Ideas here are driven by needs
that are unique to emerging markets. And the power to transform is
inbuilt, notes the Professor of Corporate Strategy and International Business at Michigan University. In this
interview to Rajiv Bhuva and Kunal
N Talgeri, Prahalad talks about how
a better-networked world enables organisations today to access resources
from multiple sources and innovate
with consumers. This is also the subject of his latest book, The New Age of
Innovation. Excerpts:
In your new book, you focus on
companies that are innovating with
consumers (or co-creating). How
has the environment in which organisations compete changed?
Most studies until now assumed that
firms innovate. But look at what is
happening today: around three billion
people are connected with the emergence of social networks, digitisation,
and convergence of technology and
industry boundaries. The competitive
landscape is changing.
Yet, we assume the legacy system
of a Ford Model T. Even as the world
116
PHOTOGRAPHS: SOUMIK KAR
has moved away from the Model T

(mindset), innovation is firm-based
and model-centric. My contention is
that the world today is more experience-centric, and is moving toward
co-created and personalised innovation platforms. Take Google, for instance. Around the world, it is one
persons experience at a timenot
one consumer at a timebecause the
same person can sometimes be frustrated with Google or delighted by it.

The traditional assumption is: it must
cost a lot, when Google costs nothing
to the user. (Google gets paid through
advertising streams.)
If you are focused on mass-production and uniform products for all in
the traditional sense, the assumption
is: scale is critical. From those lens-
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IDEAS FOR THE
INSIGHT NEW WORLD
es, my contention about co-creation

with consumers will look awful. If
you want to create value, co-creation
allows you to reduce or increase risk
because you will not speculate what
the consumer wants. You are working
with them to create the product.
What is unique about innovations
emanating from India?
In India, when we create something
fundamentally new as a best practice,
we cannot recognise it. I am absolutely convinced that if Tata Nano was not
so well-received abroad, nobody in India would have congratulated Ratan
Tata. Unfortunately, it was external
validation. Ginger Hotels is a similar case. It was externally validated
first. We just call it a budget hotel. So
whats new? It is fundamentally new.
The common string in such cases is:
highly de-centralised origination, centralised processing and global marketing. It is a completely different way of
looking at scale. Amul processes 6.5
million kg of milk everyday, which is
unique across the world. But its 2.2
million farmers are living in villages.
We have invented a fundamentally
new way of thinking about scale.
Connecting rural India to global marketsthats what we are doing.
like markets first; then, it must be

seen if Indian innovations will be relevant to the developed world. We must
deeply understand our problems and
our advantages. We have no legacy to
start with. So, we can innovate to service the poor. Lets scale it here first,
take it to India-like markets, and then
selectively to developed markets.
This has been seen in Indian pharma, where generics serviced its own
and India-like markets first. It did not
start by wanting to go out to the West.
Once we figured out the chemistry,
reverse engineering, good manufacturing at extremely low cost, then as
From firm-based and model-centric, the move is

towards co-created and personalised innovation
How are Indian innovations placed
in comparison to those made in developed economies?
India does not have legacy systems.
If you have a well-developed telephone network, cellphones become
a supplement. But without one, the
cellphone is all youve got. So, in a
sense, developed countries have a
legacy problem because things work.
They dont have the same pressure to
innovate as India does.
If everybody can use an ATM card
with a nine-digit code, there is no
need to develop a biometric ID. But
we have a problem with a nine-digit
code; so we innovate.
India can be a laboratory for India-
118
drugs came off patent and the generics market evolved in the US and Europe, we were well positioned.
Most case studies in your last two
books are from private enterprise.
Isnt there a spirit of innovation at
all in government?
I make no distinction between government and the private sector. But I look
at market-based and non-market solutions. Subsidies are non-market solutions. Rice at Rs 2 per kg is a non-market solution. But people take that rice
and sell it to Bangladesh. That means
even ordinary people understand markets. Non-market solutions are always
less efficient in the long term.
Second, innovation, by definition,

is an entrepreneurial activity. That
means you have to change something.
You need to change either the business model or processes. And most
important is: the entrepreneurs point
of view. No entrepreneur can manage
to change without a point of view and
strategic intent.
How can organisations in India
build a culture of innovation?
The set business model and processes
in a successful organisation eventually
become their lenses of looking at the
world. This may be an impediment
when they are unable to identify new
opportunities and act on them. This
can be changed by first having a point
of view. Then the organisation must
assess its capabilities and establish
the gaps it has to fill. This must be
followed by deriving the specifications
of intended change and creating short
experiments. The systematic way of
achieving this is to analyse, learn and
scale in doable steps.
What is essential at an organisational level to build an idea from discovery to application?
Organisations must build flexible and
resilient business processes that allow them to uniquely serve individual
consumer experiences. If an insurance
firm wants to charge vehicle insurance
premium per trip against the traditional per annum model, it has to have
proper systems that allow it to monetise the premium with the capability
to do micro-billing to collect the premium. Thats a business process, and
hence very counterintuitive. Business
processes have never been elevated
to a source of competitive advantage,
which is where innovation has to be
understood and implemented.
The development of connectivity and
social networks, and the availability of
digital technology at a low cost, are
some of the factors. Convergence of
industry is where traditional boundaries are getting broken. These are favourable external drivers, which allow
organisations to do dramatically different things internally .
(For full text of this interview, log on
to www.outlookbusiness.com)
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IDEAS
10 THAT HAVE
CHANGED OUR WORLD
Things Will
Never Be
The Same
A wave of ideas that have carried us to newer, happier
shores from where theres no return
SUPRIYA KURANE WITH
NAVAN IGNATIUS
T TAKES courage to question the

obvious. Newton pondered why
the apple had to fall. Mendeelev
questioned the apparent disorder
of discovered elements and
grouped them in a table. Leonard
Kleinrock wondered if it was possible
for packets of data to be routed from
one place to another based on the
address information carried in the data,
much like the address on a letter. And
that is how the Internet was born.
In the next few pages, we chronicle
10 ideas that have changed the world
we live in, ideas without which our
lives would have been very different.
These ideas might have come from
ring rightthe large count of working

couples employed in the sector, living
as nuclear families, generate demand
for household help, home-delivery, et
al, besides fuelling labour-intensive
construction and other activity. But
what is of greater significance than
the home-ground effect is the big
transformation in overseas perception
of Indiaseen hitherto as a land of
cows and the Taj Mahal, not knowledge and knowledge workers.
nameless unknown people, but we

are only looking at the profound impact they have had on our lives.
Offshoring
It isnt everyday that an economy
leapfrogs to 8%-plus growth without
getting its manufacturing sector in order. India did, thanks to offshoring. In
the process, it created 1.6 million urban-centric, dollar-pegged, well-paying jobs for the growing ranks of the
young. What it also did was unleash
this higher-income power to trigger
a consumption boom. A NasscomCrisil study last year estimated every
rupee invested in the sector generates an output of Rs 2, and every job
created leads to four more in other
parts of the economy. The numbers
Green Revolution
Although the Green Revolution didnt
originate in India, it achieved its
greatest success here. Not only did
it help India become self-sufficient
in foodgrains by boosting production and productivity, it also made
us a net exporter. The successcrop
yields jumped 30% between 1947
and 1979was possible because of
a greater use of high-yielding and disease-resistant seeds, double cropping
and expansion of farmlands. While
the revolution did increase farmer incomes, it also created new jobs, and
new and better irrigation facilities,
because of the need for more water,
seeds and fertilisers.
AMIT KUMAR
GOLDEN HARVEST: Use of improved

seeds and farming methods saw crop
yields rise 30% between 1947 and 1979
IDEAS THAT COULD HAVE
CHANGED OUR WORLD
NILOTPAL BARUAH
REMOTE SERVICE: Offshoring created

1.6 million dollar-pegged jobs in cities
Computers And The Internet

Information at your fingertips, try a
Google search or Wikipedia. Vanishing boundaries, free-flow of information across the world on the wide
web and people just an e-mail away.
Thats just a part of the power of the
Internet. Work-from-home, e-banking,
e-trading, e-shopping... Theres a big
e in our lives that we cant do withoutfrom finding a job to a partner.
A big change, but the transformation of our lives has barely begun. PC
penetration at 11 per 1,000 people and
under 50 million internet usersjust
0.04% of our populationshow were
still under-connected. It was computers and connectivity that made offshoring possible. And it could spawn
bigger revolutions in the coming days,
especially in the hinterlande-Choupal for one.
Low-Cost Airlines
Airport congestion is hell. Too many
flights, too many passengers, the
same infrastructure. Low-cost airlines fly about one-third of all fliers in the country. With their nofrills, stripped-down pricing, they
are redrawing the travel plans
of Indias rising middle-class by
The Sewa Movement

The Self Employed Womens Association
(SEWA) was born in 1972 as a trade union
of self-employed women. The brainchild of
Ela Bhatt, the idea of getting self-employed
women organised into a group was a novel
one. Within a year of establishing itself, SEWA
members formed a co-operative bank. The
association, however, is largely concentrated
in Gujarat. The plight of unorganised workers
would have been better had the model been
adopted across the country.
Kerala Model Of Education

Education in Kerala represents a success story that many other parts of the
country might wish to emulate. In fact, its literacy rate of 91% puts it closer to
developed countries than to other Indian states. The roots of this literacy culture can be traced back to the rulers of the local dynasties who patronised education. The pluralism of the states heritage also was a major driving force. Early
Buddhist settlers and the Muslims set up schools and Arabic Colleges. Christian
missionaries also helped to lay the foundation of education firmly in the state.
Other states could have caught up had they shown enough political will.
Calcutta Metro
The first metro system in India, the Calcutta Metro, began operating 20 years
before the Delhi Metro did. The underground mass transit system, which covers
about 16 km, helped ease commuter misery
in jam-packed Kolkata. The Calcutta Metro
was the first real solution to tackle urban
transport issues post-independence. It took
the rest of India 20 years to get its act together and get the Metro to other cities.
Bangalore Action Task Force

In 2000, the Bangalore Action Task Force, a public-private partnership project under the leadership of Karnatakas then Chief Minister, SM Krishna, took
it upon itself to make Bangalore the best city in the country. The idea was to
have a single point of contact, a source from which the vision for the citys development would emanate. Corporates and civic bodies worked together to make
the city run like a well-oiled machine. BATF was a success. However, Krishna lost
his chief ministership in the next elections and development in Bangalore came
to a grinding halt.
The Anand Model

The story of Amul (Anand Milk Union Limited) began way back in 1946. In
the 1970s, Verghese Kurien built the Anand model, a three-tiered structure
to collect, process and distribute milk. The model enabled small producers obtain efficiency and economies of scale. The whole operation was professionally
managed so that dairy farmers had the freedom to decide their own policies.
Other states tried replicating the model, but were stuck in red tape.
IDEAS
10 THAT HAVE
CHANGED OUR WORLD
as monthly incomes rose many times
over. Today, even twenty-somethings
can buy a house of their own.
Cable TV
SAIBAL DAS
NO FRILLS: Low-cost airlines have made air travel a reality for the middle-class
weaning them away from railways.

Destinations like Jaipur that werent
considered lucrative by full-service
carriers are attracting LCCs in droves.
However, rising costs could take some
wind out of their sails. If they stay on
course, they could redefine commuting, especially in tier-II and tier-III cities. For now, theyll continue to cause
delays for all.
Liberalisation
Freedom from regulatory bondage is
how one can sum up the economic
liberalisation programme, kicked-off
in 1991. It unshackled industry from
the Licence Raj, allowed freer imports
and foreign investment in several sectors. Today, we have a globally competitive industry rubbing shoulders
with multinationals on their home
turf. World-class products, cutting
edge technologies and the best global
brands are all here. MNCs jostle for
market share, shelf space and talent
with local companies. Competition for
market and talent has spelt good tidings for individualshigher incomes,
better deals. Indians have grown in
confidence as lowering of barriers has
opened up opportunities for overseas
exposurework and leisure. Liberalisation has liberated Indians.
124
Home Loans
Time was when people bought a
house in their fifth decade, that too
by pillaging their PF and borrowing
from friends and family. Till the latenineties, credit was mostly a concept,
exorbitant (16-18% interest) and inaccessible (only select PSU banks offered a home loan). Then, three things
happened. One, private banks came
in and established a credit culture.
Two, urban incomes shot up manifold. Three, so did household savings,
which, along with increasing liquidity,
pulled down interest rates to 7-9%.
Home loans became a household concept, monthly payouts halved, even
The camera doesnt lie, they say. But

if you cant see the picture, you cant
judge. That was the plight of Indians pre-1992. A government mouthpiece, Doordarshan, passed off for TV,
beaming propaganda for the government of the day and patching together
a couple of hours of entertainment.
Cable TV unleashed an explosion of
viewing options across all genres.
More significantly, it offered Indians
a window to the world, presenting
possibilities and shaping their imagination. If a majority of the Indian oneday cricket team today are from towns
and villages, cable TV has something
to do with it. People can see, be it the
adventures of the US in the Middleeast or those of Indian MPs in the
wells of the Parliament, or the contrast in urban and rural progressand
make informed judgements.
ATMs
ATMs freed us from the tyranny of
PSU bank employees, who had a gift
for invoking Murphys Law and turning a cash withdrawal into the outing
for the day. The economic loss caused
by the sloth in the banking system
was sizeable.
In a larger sense, the clumsy-looking machine that spits out money at
the touch of the hands is the face of
banking sector reforms. Today, banking is about convenience and empowerment. The convenience to carry on
AN ICON: Maruti 800 brought

motorisation within the reach
of the middle class
VISHAL KOUL
IDEAS THAT HAVE
BECOME A JOKE
with lives without worrying

about banking hours. The
power to make a difference
to lives with products and
services like home loans,
smart cards and micro-finance, to name just three.
And Murphys Law makes
less of an appearance now.
Ever since the dawn of the digital age, people have

been talking about throwing paper out of their
lives. Electronic documents would substitute wood pulp
and ink, they said. While paper-reducing technologies have
crept into our lives, its too early to envision a paperless
world. Its true, today, people carry their data around in cellphones and palms, but it is also true that rising use of digital documents has resulted in an increase in the amount of
printing done.
Maruti 800
The Maruti 800, launched in
1983, wasnt a breakthrough
in automobile technology,
based as it was on a model
introduced in Japan in the
late 1970s. However, it did
revolutionise personal travel for urban
Indians. It was the first peoples car. It
brought motorisation within the reach
of the middle-class. More women got
behind the wheel and became selfsufficient in travel.
The 800 also showed us what cars
could be. Having grown up on the
spit-and-sputter experience of Fiat
and Ambassador, the smooth drive
of the Maruti 800 was the difference
between night and day. As the Indian automobile sector opened up,
the number of models increased and
got better. And it all started with the
humble 800.
Five-Year Plan
Impressed with the Soviet Unions industrial progress, Jawaharlal Nehru emulated the concept of
centralised planning. The idea was to set integrated goals
for a finite period of time. But in todays radically changing
world, ignoring of market forces and lack of implementation powers mean that
the targets are never met. It has become more like a ritual, as it is unrealistic to
set precise targets when the outcome hinges on so many external factors.
Mobile phones
From a status symbol to an indispensable communications device, the mobile has come a long way. Although
mobile services were launched in India in 1995, they were the preserve
of the rich in the initial years. Call
rates were high, as companies reeled
under the burden of a fat licence fee.
In 1999, the government shifted from
a high licence fee regime to low fee
with revenue-sharing, and call rates
started to drop. Subscribers increased
at a frenetic pace.
At last count, about 250 million were
connected, making use of the mobile
in diverse ways. Like the electrician
and plumber who dont have to pay
retainers to a shop, as people can
buzz them on their mobiles. Like the
fisherman who can make calls from
the sea to find out who is offering the
best rates for his catch on the shore,
and dock his boat straight there... .
Paperless Office
World Institutions
They are well-meaning organisations, but rendered
useless and ineffective. The United Nations, while being ideally optimistic, has not been able to prevent a
single conflict around the world. Institutions such as the
IMF and the World Bank have not been able to arrest the
growing inequalities between countries and within
countries. The world has changed and its financial architecture needs change too.
Nine To Five
Who works eight hours a day? Probably, only government employees. For
most of us, the working week is lived in one long breath, punching in 10, 12,
16 hours each day, and then some if one adds up the time spent on outsideoffice calls, meetings and e-mails. And then, theres the other anachronism: fiveday week. Welcome to the rat race.
Corporate Social Responsibility

Giving back to society is the latest fad for corporate honchos. Today, any
company of note has a corporate social responsibility programme. But dig
deeper into these schemes and youll find a majority make a mockery of the
exercise. Yet, they print exaggerated statements and posed photos of such illconceived initiatives in their annual reports to look holier than thou.
IDEAS
5 THAT
FAILED
Falling
Flat
Some were ahead of their
time. Others just didnt get
it right. And some were
downright stupid. Here are
a few instances of ideas that
bombed badly...
DVORAKS KEYBOARD
IRIDIUM
DR AUGUST DVORAK, an educational psychologist, patented the

Dvorak Simplified Keyboard in 1936
as an alternative to the more common qwerty (standard) keyboard. In
qwerty keyboards, the more commonly used letters were separated across
the keyboard to prevent the keys from
jamming up. Improvements in typewriter design made key jams less of
a problem but the basic design of
the keyboard remained the same. In
Dvoraks keyboard, the most common
letters are on the home row. But despite its efficiency, the keyboard has
failed to catch the imagination of
typists, corporations and manufacturers.
MOTOROLAS IRIDIUM
satellite telephone system was supposed to
enable communication
from anywhereeven
Mount Everest and the
North Pole. The company planned to
create a massive network of satellites
that would provide global coverage.
Over $6 billion was spent to put 66
satellites in orbit. Full services commenced in 1998. Unfortunately, despite the brilliant technology, the project ran into trouble. The phones were
too heavy and didnt work inside
buildings. Call costs were hugely expensive. By August 1999, the Iridium
unit was bankrupt, and decided to
let the satellites burn up in the atmosphere. The US Defense Department
bought the whole system in 2000
for a mere $35 million.
FORD EDSEL
EASILY ONE of the monumental failures in automobile
history. In 1957, Ford introduced
the Edsel as the car of the century. Instead, it turned out to be
one of the disasters of the century. The company reportedly
lost $250 million (more than $2
billion in todays value) on the new
model. Simply put, the Edsel was a
big gas guzzler and way too expensive. The timing, too couldnt have
been worse as consumers were looking for smaller, more economical cars
and had no interest in huge, big fin
cars with glitzy chrome.
126
NEW COKE
HUGHES H-4
HERCULES
AMERICAN INDUSTRIALIST Henry
Kaiser was the man behind the H-4
Hercules. In early 1942, German Uboats were harassing American merchant ships and Kaiser felt a gigantic
flying boat could counter the attacks.
He teamed up with aviator and business tycoon Howard Hughes
and, together, they brought out
the largest flying boat ever built.
The aircraft was considered a
technological tour de force.
Ultimately, however, it flew
just once. The project was an
expensive failure, and was cancelled at the end of the war.
IN APRIL 1985, the Coca-Cola Company announced its decision to change

the flavour of its flagship brand.
However, public reaction was
overwhelmingly negative;
some people likened the
change in Coke to trampling
the American flag. Black marketers sold old Coke for $30 a case.
Coca-Cola executives announced
the return of the original formula in
less than three months. A US Senator called it a meaningful moment in
US history.
IDEAS
10 BORN OUT
OF ACCIDENTS
Er...
...Eureka!
Many a product has come into being because of an accidental

bump or a piece of carelessness. Heres a look at 10 of them
MICROWAVE OVEN
One day, Percy Spencer, an American scientist, was
studying a magnetrona vacuum tube that produces
microwave radiation. Suddenly he felt the candy bar in
his pocket melt. Spencer was intrigued. He placed some
unpopped corn kernels near the vaccum tube. To his
surprise, the kernels started sputtering popcorn all over.
Next, he placed an egg near the tube and it spewed out
the yolk. The microwaves had broken the egg. Spencer
realised he had stumbled upon a new way of cooking.
VELCRO
PACEMAKERS
In the 1950s, Wilson Greatbatch,
an engineering professor, was hard
at work trying to come up with a
device to measure heart sounds.
Instead of reaching out for a 10,000ohm resistor, a cylinder to control
electric current, Greatbatch grabbed
a stronger resistor and plugged it
into the circuit. It pulsed for 1.8 milliseconds and repeated itself again.
Of course, it didnt succeed in doing
what it had set out to do. But it beat
like a heart. Voila, one of the most
significant medical devices of all
time was born: the pacemaker.
128
After a stroll through the mountains,

Swiss engineer George de Mestral found
thistle on his trousers. He tried removing
it, but it tenaciously clung to his pants.
Mestral put the thistle under a microscope and saw that it had thousands of
strong but tiny hooks. Out of this grew
the idea for the fastening mechanism,
Velcro, which hit the market in 1959.
Velcro has since become an effective
material used in clothing, shoes, sports
equipment, luggage and wallets.
THE SLINKY
The slinky as we know it today was originally just a spring with its secrets yet
to be unlocked. Sometime in 1940, Richard James, a marine engineer, rolled
it along the floor. The spring uncoiled itself elegantly and tumbled across the
floor before it came to rest. Slinkya name that reflects the sound it made
was introduced in toy stores in 1948, and became one of the most popular
and iconic toys of all time.
SARAN WRAP
SAFETY GLASS
In 1933, Ralph Wiley, a college

student, was cleaning some
glassware when he came
across a vial he couldnt clean
Soon after, Dow Chemical, the
company where Wiley worked,
developed it into a green film
and called it Saran. The new
material would later give rise
to a transparent and odorless
film marketed as food wrap.
Today, no food packaging
industry can afford to do without Saran Wrap.
In 1903, Edouard Benedictus, a

French scientist, was climbing
a ladder in his lab, looking to
fetch a chemical substance. As
he was climbing up, Benedictus knocked a glass flask down.
He heard the glass shatter,
but when he looked down, he
was surprised to find that the
shards had stayed together, intact otherwise. In fact, the flask
was coated with cellulose nitrate, a liquid plastic. Thus was
born the idea for safety glass.
ICE CREAM CONES

POST-IT NOTES
In 1970, Spencer Silver, who was working for 3M, developed an adhesive but wasnt successful in marketing it to his own company. The adhesive was weak and
the glue came unstuck easily. Four years later, Arthur
Fry, a fellow colleague and a member of his church
choir, found to his annoyance that the slips of paper
he placed in his hymnal to mark pages fell off. Fry
applied Silvers adhesive to his bookmarks and they
worked wonderfully. Fry sold the modified idea to 3M.
And thus was born the Post-It note.
When ice cream vendors ran out of

dishes to serve their wares at the Worlds
Fair, St Louis, Missouri, in 1904, a substitute had to be found quickly. It was a
sweltering day and ice cream was melting before you could say eat. One of the
stall owners, who was selling Zalabia, a
water thin waffle from Persia, came up
with a brilliant idea. He rolled the wafers into cone-shaped receptacles and
popped ice cream on top.
ARTIFICIAL SWEETENERS
PENICILLIN
Alexander Fleming was researching a strain
of bacteria in 1928. Subsequently, he went
on a holiday, forgetting his research. His failure to clean up his workspace resulted in one
of the greatest medical discoveries of all time.
When he came back, he found the glass culture dishes
he had left out overrun with fungi. Fleming discovered
that the bacteria were unable to grow in the area surrounding the fungal mould. He had discovered penicillin, which would go on to revolutionise the way doctors
treated bacterial infections.
In 1879, Constantine Fahlberg, a chemist, was engrossed in his lab

experiment. He forgot to wash his hands and went to dine at a
friends place. As he ate, he felt his sweet tooth being tickled. After
tasting various residues on his hands and
clothes and the chemicals in his workplace,
he finally traced the cloying sweetness back
to a particular compound he was handling in his lab. Later, Fahlberg oxidized a
sample of the compound, orthotoluene
sulfamide, that had rubbed off on to his
hands, and came up with orthobenzoyl
sulfimide. The world now knows it as saccharin. By 1907, saccharin was used as a
replacement for sugar in foods for diabetics.
129
REEWIND
WIND
R
KEEPER OF
THE
FLAME
1843: A Scottish hat maker James Wilson launches a publication to campaign for free markets, primarily against
Corn Laws in Britain that restrict trade, lead to high bread
prices and starvation. The Economist newspaper is born.
1923: Organised summaries of news for busy men becomes the raison detre (reason for existence/birth) for
TIME
1930: Facts and statistics are the pillars of business journalism until a stylish journal of entrepreneurial culture
takes shape in Fortune
2006: India is a nation pregnant with possibilities, grappling with globalisation and learning to live in a new world
order. Outlook Business is conceived to meet the needs of
decision makers in the new era
ITH TIME
TIME,, needs change. News today is
transmitted on the tube, splashed across
several pages of pink and white newsprint
of varied sizes. There is need for freedom
from news-clutter. Outlook Business in its
two years since birth, on April 20, 2006,
has devoted its attention to issues of importance. Going
beyond and behind news to identify, examine, analyse and
put in perspective matters that are engaging the minds of
CEOs, policymakers, economists, bankers, managers....
Subjects where easy answers are hard to come by, issues that
require study, deeper examination, much consultation and
deliberation before an answer presents itself. Weve reached
out to the best minds for dissecting issues, understanding
implications and unravelling aspects that hadnt been brought
to light. All this, layered on hard facts, data analysis, rigorous
fact-vetting and good common sense have enabled us to offer
authoritative views that can positively influence policies and
guide business decisions. That in sum is our raison detre!
Value for the reader has been the cornerstone of our
work. Be these taking the lead in identifying business opportunities, or evaluating and presenting management
strategies, or unearthing and quantifying the true implications of important developments. The big idea: to put our
reader two steps ahead, if not three, of others in exploiting
new avenues of business, developing sound business strategies/policies and anticipating future trends. We call this
thought leadership.
Leadership in thinking must be backed by strong beliefs
and strength of character. We believe in progressive reforms with inclusion. We have never wavered. Truth for
us is paramount and we havent been coached in the art of
diplomacy, else our writers would have been very civil servants. We speak our mind. But when we speak, it is with
good reason. You could accuse us of being harsh on occasions, but not unfair. Our writers back all their work with
signatures, taking full responsibility for views expressed.
We write in simple, comprehensible language that doesnt
require you to avail the services of an interpreter. Like
words must string together to give meaning, we believe
inter-linkages between economies, markets and businesses
must be examined to draw the true meaning of any event.
A holistic approach and global view are prerequisites for
evaluating any business decision today. Terms like subprime, credit-default-swaps and exotics have entered
our lexicon now, even though they were unheard of by
most three years ago. Today, when a bank in US sneezes,
an outsourcing company in India catches a cold. We dont
live in silos anymore and this is reflected in all the work
that Outlook Business does.
That readers are seeing value in what we do is evident
in their swelling numbers226,000 at last count (Indian
Readership Survey). In the pages that follow, we present
few features that demonstrate our editorial leadership,
management strategy and business opportunity writings
that struck a strong chord; also some pieces that looked
beyond business. Expect still more in the year ahead. This
two-year-old, we promise, will grow on you .
Sonal Sachdev
SAPTARSHI BISWAS
131
RE WIND
FIRSTS
Delivering value is all about putting our readers well ahead of the herd. Weve
demonstrated thought leadership across the business spectrum.
The Wrong Key

There are question marks
over the ability of forcefed growth to sustain
without creating imbalances. The main scourge
could be inflation... Obsessed with consumption,
the FM has overlooked
supply-side constraints,
which could have countered inflationary tugs
from the demand side.
Verdict on Budget 2008,
March 22, 2008
The SWord
The RBI is caught in the
growth versus inflation
dilemma. There is little
that monetary policy can
do to prevent imported
inflation and any tax rate
cut would fuel further
inflation. Has the genie
of stagflation been uncorked?
Raising the stagflation
question, April 5, 2008
Split Wide Open

The inside story of how two of Indias most respected industrial groups swayed from warm hugs and firm handshakes to cold shoulders and pointed fingers. The offer
for Cingulars stake that threw up the option of a third
stakeholder, as well as the possibility of a change in the
current equations, was a cause of concern for both.
The inside story of the Tata-Birla faceoff over Idea
Cellular, September 20, 2007
Road To Riches
Going For Broke
IL&FS, consultant to the

project, estimates the
proposed Delhi-Mumbai
industrial corridor could
contribute 1.5% to the
GDP and generate three
million jobs. But its success hinges on the coordination between states,
the Centre and the Japanese government.
Delhi-Mumbai corridor,
August 5, 2007
There is a business proposition here. Between IL&FS

and us, we have put aside
Rs 100 crore for the Indian
Cricket League. With this
investment, I think we can
break even.
Subhash Chandra on his
ICL foray, August 5, 2007
360 Degree View

Exports are an outdated expression of global Indian enterprise. So, Outlook Business drew up the first true and comprehensive listing of 50 Indian multinationals after poring
over and compiling data on about 200 top-notch companies
based on their revenues and profits earned overseas, employees working abroad and assets owned beyond foreign
shoresbasically, every dimension of India Incs complex
web of global interests.
Global-50, February 23, 2008
132
Arriving Soon
Civil Aviation Minister Praful Patel says the objective is to
have an airport to service almost every district. A huge
build-up is happening in the non-metro space. The Airports
Authority of India is embarking on a modernisation drive,
and thats not even the big story in small airports. Building airports from scratch is. At last count, 61 new airports
across 17 states are at some stage of proposal or execution.
Kurnool in AP, Akola in Maharashtra, Shimoga in Karnataka,
Tawang in Arunachal, Jhajjar in Haryana At least 35-40
of these airports should see an aircraft touch down in the
next 10 years. The total estimated investment: $30-40 billion (Rs 1,20,000-1,60,000 crore).
Small airports set to take off, April 19, 2008
Small Wonder
Mid-Sized March
In the last two years, young
companies have outdone
their larger peers in the race
to go global. Of the 355 overseas acquisitions done by
Indian companies in the last
21 months, 230 were done by
medium-sized firms with revenues of below Rs 1,000 crore.
The middle-rungs global
march, December 15, 2007
Sustainable
Solutions
New sustainable solutions
will have to be
founded on a new relationship between the rich
and the poor. The rich can
no more tell the poor to
do it our way.
Arun Maira, September
20 2007
Make My Car
At a time when foreign OEMs seek to deepen roots in the
fast-growing Indian market, contract assembly is not just
relevant, it is also a huge business opportunity. The testament of a robust contract manufacturing model will lie in
demonstrating to foreign OEMs why they need not invest
in assembly plants, and deal with scale-related pressures.
The opportunity for India in contract manufacturing of
cars, April 5, 2008
Balancing Act
Forex Fiasco
A recent string of events and some circumstantial evidence
suggest that there is a systemic failure in the way corporate
India is managing its forex exposure. An Outlook Business
investigation discovered that forex derivatives trades of
many companies have gone awry, leading to huge losses...
Some of the smaller companies have expressed an
inability to pay up, which
could hit banks.
Calling the forex derivatives failure months before it
hogged headlines, December
29, 2007
The Nano has got positioned as the worlds

cheapest car. Its a terrible
position to occupy. I dont
want our car to be positioned as the cheapest
car. I dont want people
to look down on this
product. If this car gets
branded a Bajaj, people
will say this is made by a
two-wheeler company. I
would not want to buy a
Bajaj car.
Rajiv Bajaj on small
cars, April 5, 2008
The Design Edge

While the West has been sold
on designs capability in pushing the frontiers of business
opportunities, India Inc is just
waking up to its varied possibilities.
India Inc warming up to design possibilities, June 20, 2007
India must
start experimenting with
its $230 billion
of reserves. But lets not
set up an investment firm
to set these reserves at
work. The private sector
can be trusted.
Former IMF Chief Economist Raghuram G Rajan
on exchange rate management, September 20
133
RE WIND
ISSUES
We examine them minutely and give you a clear heads-up on whats behind the
smokescreens. And then provide informed opinion.
Land Locked
You have to be bold
enough to have a large
area of 20,000-30,000
acres for SEZs against the
4,000-5,000 acres available now. The government should have first acquired the land and then
selected the developer.
But now, land acquisition
is a political affair.
KP Singh on SEZs,
July 20, 2007
Powerless
Wrong Call
We havent really heard of any investment firm being pulled up
or taken to court over misleading research or motivated recommendations. Known instances of brokers pitching stocks as
buys to the general public while selling them havent led to any
significant activism or strong regulatory action.
Misleading brokers, June 5, 2007
Money Down The Drain

It is wrong to conclude that NREGS is a cash transfer program and, therefore, if leakages occur, they are desirable because the accrual is to the
poor. This is the politicians apology for what is manifestly a scheme tailormade for guiltless corruption. In a few years, the NREGS will deservedly
find its rightful place in the dustbins of history.
Surjit S Bhalla on the NREGS, March 22, 2008
The Reliance Power IPO

is a call for putting trust
ahead of prudence.
Verdict on Reliance Power
IPO, January 26, 2008
Trust has been lost. Ambanis moves to win back
investors are a cropper.
Redemption will come
only from performance.
Verdict on buyback,
March 22, 2008
Throwing Stones
Glass manufacturers are hankering not just for a continuation
of the anti-dumping duty, but also widening its scope, and they
may have a case. However, while they present themselves to the
ministry as a hapless, wounded party, their past practices show
bullies willing to go to great lengths to protect their interests.
Glass manufacturers and importers face off, April 19, 2008
Passing The Burden

Thieves In The Backyard
An Ernst & Young report indicates that 55% of companies interviewed by the consultancy in the past two years had reported
incidents of fraud. Elsewhere, a PwC study pegs the average
direct loss from fraud per company at $2.4 million and at $1.5
million in India. Rapid global strides being taken by Indian companies will call for a change of approachmany turn a blind
eye to frauds today, and accept them as part and parcel of the
operating environment.
White-collar crimes, December 29, 2007
134
While the PMs Ten-Point

Social Charter is grounded in noble intentions,
and will be a wake-up call
for the greedy, there is
more than a hint of populist socialism in it. It could
spell a thrust on populism
at the cost of growth.
PMs call on inclusive
growth, June 20, 2007
OPPORTUNITIES
We make it our business to identify them for you. When they

come to you, grab them. Life doesnt give second chances.
Young Guns
Between 2006 and 2026,
roughly 40% of the countrys
population will be in the 2044 age group. The next two
decades will, therefore, be a
golden era of consumption
for India, driven by young
consumers with high disposable incomes and aspirations. McKinsey has forecast
that India will be the fifth
largest consumer market in
the world.
Indias young consumers,
November 3, 2007
People Power
India needs a skilled and
educated workforce even
more than the so-called
Asian Tigers do. Those
countries accelerated their
development primarily
through manufacturing,
while Indias focus on
services and technology
makes its workforce skills
especially critical.
Bill Gates on India,
May 20, 2007
Bric By Bric
The New Ideas
We want to be in every
BRIC economy. We are
currently only in India
and China. We need to be
in Brazil and Russia
as well.
Baba Kalyani on Bharat
Forges global footprint,
September 20, 2007
The IT/ITES sector, the

poster boy of the Indian
entrepreneurial renaissance, is now being
edged out by other segments. The 2007 edition
of the OLB-Venture Intelligence poll of Indias hottest emerging businesses
suggests that this dominance may end soon.
Only three of the top 10
emerging businesses
identified are in IT or related sectors. The other
seven include education,
private equity, packaged
food, retail services, micro-power projects, warehousing and cold chains,
to name a few.
10 hottest emerging businesses, October 20, 2007
Twin Benefits
It is the hybrid season for
automakers. The Tatas,
the Mahindras and the
Hindujas are planning to
tap the growing opportunity in hybrid vehicles.
India gets into the hybrid
act, October 5, 2007
Building Cities
Solar Power
The JNURM is a Rs 50,000

crore government initiative
to reshape Indias urban
landscape. Over seven
years, 63 towns and metros
will get a makeover. The
huge mandate includes repealing ULCRA and reducing stamp duty to 5%.
Building urban infrastructure, July 20, 2007
Mukesh Ambani expects

prices of solar (photovoltaic) cells to drop
significantly over time to
make this source of energy economically viable,
especially for addressing
the power needs of the
hinterland.
On photovoltaic cells,
September 20, 2007
Going Local
While haats have always been part of Indian life, it has only
now caught the eye of corporates. From Reliance Retail to
Hindustan Lever, companies are becoming ryot-friendly and
pitching their wares. The aim is to cut logistics costs and beat
flagging sales at urban locations. The commercial potential of
the 47,000 such weekly markets: Rs 1,00,000 crore per year.
The business potential in weekly haats, May 20
135
RE WIND
STRATEGY
Success isnt a product of investment of time and money. It has a lot to do

with how you go about achieving goals. We provide the pointers.
Smoke to Seeds
Back Is The Way Forward

The quest for minerals is taking companies to new places
and new experiences. So, the Tatas are digging for iron ore
in Ivory Coast, NTPC is in Sri Lanka for coal
India Incs rush for minerals, February 9, 2008
YC Deveshwar has an audacious plan for ITC. He wants

to transform the Rs 19,000
crore cigarette major into one
of the countrys biggest consumer goods conglomerates,
achieving pole position in its
existing verticals, including
confectionary, biscuits, snack
foods, ready-to-eat foods,
consumer staples, hotels,
clothing and personal care
products. We are helpless. All
we want to do is secure the
future of this great institution.
As he takes you on the journey, you begin to give him
more than a chance to realise
these dreams.
ITCs second wind, December
1, 2007
In The Drivers Seat

Our capabilities have
reached a level where we
want to make small cars
exclusively in India for
export to Europe. Of the
three million cars that Suzuki wants to sell worldwide, about 30% have to
come from India.
Maruti MD Shinzo Nakanishi, April 19, 2008
Truckin
Realty Drive
Economics and politics aside, theres also a
real estate angle. An HSBC report says, even
after a VRS, Bajaj could make a net gain of Rs
952 crore by selling its Akurdi land.
Fallout of Akurdi plant closure, October 5, 2007
Facing sluggish sales

growth, Tata Motors and
Ashok Leyland are targeting the second-hand truck
market. Ashok Leyland is
targeting a 15% share.
Truck majors drive into
the second-hand market,
July 5, 2007
The Alchemists
Top healthcare firms want
at least 10% of the Rs
35,000 crore retail chemist market in two years.
What organised brands
offer is more than just a
repertory of prescriptive
drugs. Apollo, besides
stocking medicines, offers
checkups, insurance and
online appointments.
Corporates eye pharma
retail, July 5, 2007
Beyond
Cricket
To Russia With Love

ICICIs branches in Russia will grow from four to 12; its balance
sheet from $600 million to $4 billion by 2010, helping it break
into the top 50 there. A single competence is driving its global
operations: its ability to take learning, models and ideas from
one country and transplant them in another.
ICICI Banks global ambitions, September 20, 2007
136
Cricket and
Bollywood
sell in India,
but they are not the only
hooks for marketers to
cut through the clutter.
Several brands have done
a great job of escaping
this tyranny Amul, SBIs
surprisingly SBI campaign, Bajaj Avengers
Feel like God
Arvind Sahay after Indias debacle at the cricket
world cup, May 20, 2007
LIFE
You have one, live it. Even CEOs strive to get the work-life balance right. We present
a rich menu of the world outside of business.
Kwick Facts
High Spirit s
l A Boeing 767 airliner is

made of 3.1 million separate parts.
John Walker, a grocer

in Ayrshire, went from
blending teas to blending
Scotch whiskies, Walkers
Kilmarnock Whisky. But
it was during the tenure
of his two grandsons that
the brand became popular, after being renamed
Johnnie Walker.
A toast to the founding
fathers of the spirits business, October 20, 2007
l The Nike swoosh was

designed by Carolyn Davidson, a graphic
design student of
Portland State University, and purchased by
Nike for $35.
l Mattel has produced
more carsHot Wheels
than GM, Chrysler and
Ford combined.
l GM spends more on
its employees healthcare
than on buying steel.
l A University of Chicago
study in 1907 said that
the easiest colour to spot
was yellow. Its why
John Hertz,
founder of the
Yellow Cab
Company, chose
his cabs to be yellow.
Cinema Paradiso
Drawing a balance between his passion of film-making and
a demanding profession as Chairman of Lowe India must be
quite a challenge. Not really, says Balki: I dont think about balance. People take leave for 20 days and go on a holiday. I take
leave to shoot. I shot Cheeni Kum in 45 days,
Adman R Balakrishnan on his first love, February 9, 2008
LIFE
BUDGET AND VERSE
FEBRUARY 2005
His Masters
Voice
His name may be a tongue-twister for

some, but Chidambarams muse has pearls
of wisdom for all
SRIRAM SRINIVASAN
ALANIAPPAN CHIDAMBARAM
would have been a contented man
as he approached the end of his
187-paragraph Budget 2008 speech. It
was apparent that his Rs 60,000 crore
farm debt waiver announcement,
made over a 100 paras earlier, had
stunned the Opposition. What was left
to be delivered was the punch line.
As always, he continued, I turned
to my muse, Saint Tiruvalluvar, for
guidance and reassurance. Then, in
keeping with the ritual of all his six
earlier Budget performances, he quoted
from Tiruvalluvars work. Generous
grants, compassion, righteous rule
and succour to the downtrodden are
the hallmarks of good governance,
is what roughly Tiruvalluvar tried to
convey in classical Tamil.
Its broad theme isnt different to
what Chidambaram quoted two
years back. In 2006, after alluding to
the difficulties faced by farmers, he
quoted a couplet that roughly means
this: The world is his who does his
job with compassion. If the Finance
Minister was able to repeat that theme
this year, it was all because his muse
wasnt someone who would be done
with a topic in a single couplet. About
2,000 years back, Tiruvalluvar made
sure he dedicated 10 couplets to each
of the 133 topics he found worthy of
broaching. And he seems to have had
something to say on a wide range of
issues, from agriculture to the army,
from love to politics, and from friend-
86
l The term bank teller

originated during the
1929 crash, when banks
began hiring low-paid
workers to tell throngs
of frantic depositors that
their money was gone.
l Ticking down the list of
CEOs of top 400 companies, there are only four
MBAs in the top 50.
l About 50 Indian women actors have endorsed Lux since
1929. The only
male actor to do
so: Shah Rukh
Khan.
J U LY 2004
They are good rulers

who observe ethics,
commit no crime
and walk the path of
honour and courage
FEBRUARY 1997
Health, wealth, produce,

the happiness that is the
result, and security. These
five, the learned say, are the
ornaments of a polity
FEBRUARY 2006
The world is his

who does his job
with compassion
Behold the King who

reposeth not on those
who can rebuke him.
He will perish even when
he hath no enemies
ship to hostility. The collection of those couplets,

1,330 in number, is whats
called the Tirukkural. And
if you thought the Tiruvalluvar name is a tongue twister, wait
till you have a go at the Tirukkural
couplets. At times, it manages to fox
even Tamilians.
A Dictionary Of Life
But while his couplets have been
dissected over the years for deeper
meanings and newer insights, few
details have emerged about the man
himself. The source that comes closest to pinpointing Tiruvalluvars year
of birth is the Tamil Nadu Government website. And it manages this:
He is believed to have been born 30
years before Jesus Christ. Theres
even uncertainty over whether he
was a Hindu or a Jain. Whats generally accepted is that he was a weaver
and lived in the current-day Mylapore
locality of Chennai.
At first glance, it seems Chidambaram could keep on quoting Tiruvalluvar without repeating himself
for 1,330 Budgets! But in reality Chidambarams pool of kurals (as individual Tirukkural couplets are called)
is far smaller. Owing to its coverage
of a wide range of issues, Tirukkural
isnt an intense work on statecraft
and wealth, unlike say Kautilyas
Arthasastra. Of course, that would
count only if he comes back to rule as
Finance Minister.
Chidambaram straightaway wouldnt
J U LY 1996
To be able to
increase wealth, to lay
it up and guard. And
also well to distribute
it, marks a royal lord
need 250 of the couplets if he
isnt going to give away tax relief to lovers or those hassled
in marriage. Thats the number
Tiruvalluvar dedicated to human love and passion. Maybe,
the Ministry Of Family Welfare
could use those in its speeches.
It is also out of question that
he would call upon 340 other
kurals on domestic and ascetic
virtue at the hour of the Budget presentation.
To Tiruvalluvars credit,
having expounded the virtues of hard work through
another set of couplets, he
himself didnt take the easy
route to composing his work.
You get a sense of the painstaking effort that went into
the Tirukkural when you look
at the precise and methodical
OutlookBusiness | April 5, 2008
FEBRUARY 2007
managed one, try 1,229 more.

Maybe, apart from the wisdom that
his work is supposed to bring, theres
an intellectual connect with his readers. To be sure, Tiruvalluvar isnt a
fascination for just Chidambaram; he
is popular throughout the state. The
most visible symbol of that is a 133feet statue that stands alongside the
Vivekananda Rock, off Kanyakumari
coast. But there are other pointers
too. Toddlers are trained to memorise all 1,330 couplets, experts on
TV explain a kural a day and that at
least takes care of one morning slot
for nearly four years, and most
political protest meetings in
Chennai are staged from near a
Tiruvalluvar monument. A CEO,
V Srinivasan of 3i Infotech, wrote
a book explaining contemporary
management philosophy through
Tirukkural lessons.
But the ultimate evidence of his
widespread popularity could be
that he is one rare point of agreement between theists and atheists.
Thats despite the fact that Tiruvalluvar started his magnum opus with 10
couplets on God.
If ploughmen keep their

hands folded, even sages
claiming renunciation
cannot find salvation
FEBRUARY 2008
Generous grants,
compassion, righteous
rule and succour to the
downtrodden
are the hallmarks of
good governance
way he constructed
each of his verses.
The Saint made sure
each of his couplets
consisted of exactly
seven cirs (a compound
word made up of more
than one word), four in
the first line and three
in the second. The
word Tirukkural itself
is formed by Tiru and
Kural. In case you think
writing couplets with
this architecture is an easy
task, just try writing an English verse with four compound
words in the first line and three
in the second. After you have
Couplets For The Rulers

Its quite doubtful if couplets on God
would decorate a good budget speech.
But there are couplets that the broad
political class wouldnt want to forget.
One of which is this: Rain by its absence ruins men; and by its existence
restores them to fortune. With elections around the corner, you know the
role played by monsoons, dont you!
Somnath da could possibly use this:
While in the presence of the sovereign, ministers should neither whisper to nor smile at others. That was
probably the closest Tiruvalluvar
came to complaining that MPs are
working overtime to finish democracy. He might have but for the fact
that there were no overtime and MPs
then. Certainly no democracy.
Finally, it seems Tiruvalluvar has
something for everyone. This one
maybe is for those who criticised the
farm loan waiver: The benefit itself
is not the measure of the benefit; the
worth of those who have received it is
its measure. .
OutlookBusiness | April 5, 2008
87
So Said The Saint

If the FM was able to articulate compassion through a
Tiruvalluvar couplet this Budget too, it was because his
muse wasnt someone who would be done with a topic
in a single couplet. About 2,000 years back, Tiruvalluvar
made sure he dedicated 100 couplets to each of the 133
topics he found worthy of broaching.
On Chidambarams favourite patron-saint, April 5, 2008
The Know-It-Alls
Quizzers dont limit themselves to the core of a news story,
but dig deeper. A quiz beans eye is always on the lookout
for juicy details. Says VV Ramanan, a veteran quizzer and
quizmaster from Chennai: Mostly, I retain what could be
construed as trivial by the analytical readernames, figures, codenames, locations and so on.
A peek into the minds of business quizzers, April 19, 2008
Power Couple
The INX Media office on Lamington Road in Mumbai
has become a home away from home for the Mukerjeas.
Indrani calls Peter the visionary and herself the executor.
Peter has the long-term vision and he needed someone
like me to execute his vision. Like any household, he gets
the money and I spend it. He is in charge of revenues and
I take care of the content.
INXs Peter and Indrani Mukerjea, January 26, 2008
137
THEN AND NOW

A Matter Of 1%
IT WAS just two years ago that Sebi
had looked approvingly at the Justice
MH Kania panels recommendation allowing companies with a
market capitalisation of over Rs
1,000 crore and having a public
shareholding of more than 20 million shares to remain listed despite
a less than 25% market float.
Today, the regulator is desirous
again of a minimum 25% public
holding. Wed suggested in the first
edition of Outlook Business: The
question we believe deserves to be
addressed is why 10% or 15% or
25%? and pointed out these have
little relevance. We called for a minimum 26% to at least give minority stakeholders the right to block a
special resolution. Sebi didnt listen
then, we dont know if it will now.
Policy Posturing
IN OUR first issue, we had lauded the
paradigm shift in Indias foreign trade
policy for including job creation as
part of the export strategy. The occasion: Indian exports had crossed
the $100 billion mark. Two years on,
yet another annual trade policy has
been announcedthe same annual
ritual. More sops, ranging from ex-
Apologies,
But...
tension of the duty entitlement pass

book scheme, to reducing the import
duty on capital goods imports from
5% to 3%, and then some.
On structural issues, Commerce
Minister Kamal Nath has stuck to the
well-trodden path of setting up a task
force to draw up an action plan in the
next six months. In terms of improving Indias competitiveness by providing faster port turnaround time,
more container services, or a to-do
list, there was little of note.
Power Of Reasoning
WE WERE among the early birds to
air concerns on the possibility of a
significant economic impact of the
sub-prime mortgage growth in the
US. Wed indicated last June that
ripples of the rise in defaults may
reach other shores.
Around the time, Morgan Stanley
Chief Economist Stephen Roach was
among few of his ilk who was vocal
about the possibility of the mortgage
mess causing a recession in the US.
The calls were right.
Recently, we pointed to the unlikelihood of long-term sustainability of
rising commodity prices in a slowing
world economy. Again, Roach argued
in a panel discussion in New Delhi
that he expected economic weakness
to spur a downturn in the commodity
cycle. Could we be right again?
ILLUSTRATIONS BY VIVEK THAKKAR
138
SHOULD WE pay obeisance to the tall

and mighty, or should we speak our
mind? Should we be true to ourselves
or should we submit to the powers
that be? At Outlook Business, weve
chosen the path of most resistance.
We hope our Finance Minister Palaniappan Chidambaram will not hold a
grudge against us for showing why he
cant claim credit for the economy scoring an average of 8%-plus growth in his
current term; or for pointing out that
the run-rate would dip significantly in
the final overs of the UPAs five-year innings; or for questioning the efficacy of
his farm loan waiver scheme.
We convey our deepest regrets to
Anil Ambani, Chairman of the Anil
Dhirubhai Ambani Group, for the postlisting flop-show of the Reliance Power
IPO. We headlined the IPO An Issue Of
Faith, which didnt go down too well
with the groups PR wing. To make
matters worse, we followed up with a
post-issue report with the line Death
Of Trust. But to the groups credit, the
reaction was mature.
Signs of maturity were also evident
in the approach of other large business houses. For instance, there wasnt
a single note of discontent lodged with
us after we aired the dirty linen hidden
in the Idea Cellular closets, revealing
the infighting between co-owners, the
Tatas and the Birlas.
Sony Televisions Kunal Dasgupta was
riled when we asked him pointedly
about his make-or-break gamble on
the Indian Premier League. He didnt
mince his words nor did we edit them.
We are sorry we couldnt turn a blind
eye to Deccan Aviations GR Gopinath
switching auditors and changing accounting practices to present a prettier
financial picture.
Our intent has never been to hurt
sentiments, ruffle feathers or disregard
sensibilities. Apologies if we have. But
we must continue to do our bidding.
RNI NO. DELENG/2006/16808

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ANNIVERSARY ISSUE

20 APR-3 MAY 2008

Insights: Kishore Biyani, YC Deveshwar, Corinne Figueredo, Sunil Mittal,

As we begin our third year, we look at

24 The $3,000 Car

28 Rice Intensification System

50 Piped Gas Ecosystem

82 Work From Home

access to electricity no longer have to

84 Solar For Poor

The good, the bad and the ugly. A

With solar power, villagers without

ILLUSTRATION & COVER DESIGN: ARINDAM

OutlookBusiness | May 3, 2008

Editor-in-Chief: Vinod Mehta

The JLR deal has given

be no excuse for the government to be delaying the Bill.

Spread The Wealth

Mahesh Kumar Dadrwal, e-mail

It is a shame that the FCRA Bill

Taking the income tax break

OutlookBusiness | May 3, 2008

nance Ministry would also do

Editor: Sonal Sachdev

and how it is now forcing capitalism to look beyond

OutlookBusiness | May 3, 2008

The example that best demonstrates

not wealth creation.

If cash-driven capitalism was

OutlookBusiness | May 3, 2008

way he built and guards Microsofts

HE 21ST century may usher

China and India, or Chindia, will

economies with a total size exceeding

Their Time Has Come

HARD HATS, SMART HEADS:

GRAPHICS BY SUMEET GUPTA

Source: Penn World, IMF 2006

YOUNGISTAN: In 2020, 547 million

The next 20 years, he says, will

OutlookBusiness | May 3, 2008

Figures show Chindias share (in %) in world consumption

the opening up of their agricultural

play a significant role on issues such

Trade liberalisation in the

ers in Australia, Brazil and South

OutlookBusiness | May 3, 2008

Moxie wall-mount lavatory in Vapour Orange and Falling Water

KOHLER , the worlds most innovative and

ENEATH ALL the specs

portfolio of original equipment manufacturers (OEMs) is set to change in

Henry Fords genius was responsible for bringing

OutlookBusiness | May 3, 2008

market, it could cater to other emerging markets like sub-Saharan Africa,

ALL IN THE FAMILY:

The $3,000 car will compel governments to review the state of

projects will boost employment and

the ULC has required Nissan to

again. By making the car affordable,

Driving The Environment

OutlookBusiness | May 3, 2008

Associate Director at the Centre for

through congestion-pricing and roadpricing systems, which have yielded

Small cars might embolden other auto