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Rural India Powers Economic growth

Rural India powering economic growth
Brajesh Upadhyay
BBC News, Delhi

Indian telecom executive Abhinav Trivedi has travelled to remote villages and dealt with armed retailers in regions known more for bandits than their markets.

“We sold phone connections in areas where life moves at a snail’s pace,” says Mr Trivedi.

But business has been brisk.

His phone company boosted its revenues because of a rise in sales in these farming villages.

Experts say while the world economy is reeling under recession, India’s continuing economic growth has been fuelled by its farm economy – Finance Minister Pranab Mukherjee has projected growth of “six percent plus” for the financial year to March 2010.

Major force

Government ministers believe the rural market will be a major driver for future growth.

The mobile telephone market is taking off in rural India. Sunil Bharti Mittal, chairman of telecom company, Bharti Group, says people in rural India now aspire to buy all the good things their urban counterparts have enjoyed.

No wonder corporate India is now deploying some of its brighter recruits to conquer these hinterlands.

Experienced, dynamic and university educated professionals like Mr Trivedi are at the forefront of the campaign.

“What I learnt at management school was of no use in these areas. It’s the field experience that counts,” says Mr Trivedi, who was rewarded with international holidays for his efforts.

He says he met people who had never travelled outside their village, had never seen a train and using a mobile was something they found technically challenging.

“I told them there are just two buttons – one green (to receive a call) one red (to disconnect) – and that worked for them,” says Mr Trivedi.

Close to 70% of India’s billion-strong population live in villages.

Over the last decade or so, the reach of television has ensured exposure to a more prosperous urban lifestyle and companies are learning fast to tailor their products to meet these new demands.

Pre-paid mobile phone top-up cards now sell for 10 rupees (20 cents), shampoo and toothpaste pouches for 50 paisa (two cents).

Further up the supply chain, cheap washing machines are now available throughout rural India as are sophisticated cooking stoves and heavily discounted Reebok shoes.

Ajay Gupta works for a website that deals with companies working in the rural sector and says more than half of the demand today is for fast moving consumer goods, especially in the telecom sector.

“There has been no evidence of recession on incomes in this sector,” he says.

Boosting incomes

Analyst Gopal Naik says successive good monsoons and higher prices for agricultural output over the past few years have boosted rural purchasing power.

This, in turn, had helped kept the economy chugging along.

“It was a mix of both luck and some serious effort to invest in the social sector by the government that made it happen,” says Mr Naik.

In the past four years there was an almost 15% rise in the Minimum Support Price (MSP), the price at which government purchases produce from farmers. This put more money into their hands.

The national jobs for work scheme has helped as it generated employment in the rural non-farm sector as well.

The Wall Street Journal recently said rural income in India will rise from around $220bn in 2004-2005 to US $ 425bn by 2010-2011.

But can the rural economy continue to thrive after a number of states have been hit by drought?

Analysts like Gopal Naik say despite the drought in certain areas, villagers living off irrigated farms would be enough to earn, spend and sustain growth.

Clearly, India’s rural economy has never looked so rosy.

Broadband Reaches African East Coast through Seacom Network

New Africa broadband ‘ready’

(Click above link to read full article.)

Riding the digital express
VIEWPOINT
By Calestous Juma

The first undersea fibre optic cable, Seacom, reached the east African coast in July 2009.

This “Digital Express” is the most important infrastructure investment in eastern Africa since the construction of the Uganda Railway which integrate colonial east Africa into the British Empire.

Unlike the railway, dubbed the “Lunatic Express” by its critics, the Seacom network will integrate the region with the rest of the world and provide a crucial gateway to the global knowledge economy.

The $700m (£426m) project – largely funded by African investors – will reduce business costs, create an e-commerce sector and open up the region to foreign direct investment.

New industries will emerge to create content and software, new markets for access devices will grow, and research centres will flourish. Its impact will be unparalleled in contemporary African economic history.

The closest comparison is Africa’s runaway adoption of mobile telephony but at scale previously unimaginable.

Speaking at Seacom’s launch on 23 July, Tanzania’s President Jakaya Kikwete visualised a future in which Africans would truly become part of the global economy.

They could find markets for their beans in Mexico; overcome shortage of science teachers through distant learning; improve access to health care by using telemedicine; reduce corruption by enhanced transparency; and foster regional cooperation through terrestrial fibre optic cables that are currently being laid in the region, he said.

But all these benefits will not be realised without a strong combination of entrepreneurship, education, policy and investment in regional networks.

Infrastructure projects such as this have never been easy. The region has a complex mix of countries including warring and failed states.

This has been complicated by costs. A decade ago it cost over $5,000 (£3,000) to per one kilometre of standard fibre optic cable, now it is just $300. There are some advantages to being a latecomer.

As a result, the necessary infrastructure is beginning to be rolled out. Rwanda and Uganda are now linked through Kenya, and are poised to take advantage of the digital express.

“India in biggest biometric count” [The Unique Identification Authority of India]

India in biggest biometric count

By Soutik Biswas
BBC News, Delhi

Indians do not have a national identity number
A planned Unique Identification (UID) number for Indian citizens will be backed by biometric authentication, the head of the project has told BBC.

Fingerprints and photographs of more than a billion people will be taken when they are registered for the identity number, Nandan Nilekani said.

The biometric evidence will be stored online in what will be the biggest such national database in the world.

The first UID numbers will be issued in about 12-18 months, he said.
Mr Nilekani said that the “technology challenge” in putting together a biometric record of one billion citizens was “immense”.

“Biometrics on this scale has not been carried out before. They will be stored online and help in instant online authentication of the identity of every Indian,” he said. But Mr Nilekani said the government does not have an “exact fix” on the how many Indians had some sort of identity proof. [Nandan Nilekani is chairman, Unique Identification Authority of India.]

‘Pro-poor’
Biometrics on this scale has never been done before. [Nandan Nilekani's] office is looking at 80 million income tax payers who possess a Permanent Account Number (PAN), some 200 million account holders in public and private banks, some 500 million mobile phone consumers and over 600 million Indians who have election cards. There is, obviously, a considerable overlap as many of them have all or many of these forms of identification. His office will also look at the database of Indian passport holders, public distribution system cards for food for the poor, and the list of cooking gas consumers in the country. However, these checks will have to be done carefully because, as Mr Nilekani admits, there is the “phenomenon of duplicates” or fraudulent numbers.

It is clear that a large number of poor people have no identification at all, making it doubly difficult for them to gain access to social welfare schemes, Mr Nilekani added.

“This project is pro-poor and inclusive targeted mainly towards the poor. The middle class and the rich have some form of identity. People on the margins are getting lost because of lack of identity,” Mr Nilekani said. It is also hoped that the number should help tackle identity theft and fraud.

Mr Nilekani’s office will be working with state governments and 20 – 25 agencies – the income tax department, the country’s Election Commission and the state-run life insurance company, for example – to roll out the identity numbers.
No identity

The unique number will not be an identity card – instead, the number will be included in documents like election identity cards, PAN cards and bank account numbers.

India’s efforts at giving every citizen an identity number is possibly one of the greatest challenges facing the government.

Every Indian is expected to have a national identity number by 2014
“There is the technological challenge, there is a challenge of the scale of work, and there is a complex governance challenge, working with so many departments and states,” Mr Nilekani said.

The state of Karnataka in the south, India’s capital, Delhi, and Meghalaya state in the north-east are among the states which may take part in early pilots.

The project’s main technology centre will be based in Bangalore, with eight regional centres working with the various states.

Unlike in the US and UK, Indians do not have a common federal identity number.
The government expects to give a unique identification number to every Indian citizen within five years.

Why traceability of produce will be a hard sell for commodity markets in India …

Indian farmers despair at drought and corruption

Jharkhand farmers despair at drought

By Geeta Pandey
BBC News, Ranchi, Jharkhand

In Satbarwa village in the eastern Indian state of Jharkhand, scores of Muslim farmers have gathered in the village square. Their arms raised, eyes fixed on the sky, they pray for rains. “Allah, forgive our sins, reward our good deeds. Our ground is parched, our cattle are dying. Please bring in the rain.”

Some distance away, a group of Hindu farmers ring the temple bells, hoping to catch the ear of the rain god.
With the monsoon bringing little rainfall this season, the land is dry and unfit for cultivation and the worry lines are getting deeper.

“There has been no rain so far this year,” says Abdul Sakur, a farmer from Khola village. “We have not been able to sow rice. Our corn crop has been destroyed by pests. We have nothing to eat. We have nothing to feed our cattle. “There is a pond in our village. But it has no water. It’s all dry.” “We are in the throes of a famine,” says Vinod Thakur, a resident of Makri village. “Water shortage is our biggest problem. We have had no rains this year so we can’t grow rice.” ‘Dying of hunger’

Mr Sakur and Mr Thakur are among the hundreds of men and women who have come from surrounding villages to the town centre in Dhurki on this hot afternoon to meet government officials, to appeal for help.

The villagers have nothing to eat, Mr Sakur says. But some are already going back disappointed. Sanjhar Bhuin, 70, is a widow and she has been coming to Dhurki every day for the past 10 days from her village 15km (9 miles) away. “The government is supposed to give us 10kg of rice every month,” she says.
“But they say they’ll give it to us when they get it. We haven’t received any rice since April. We are dying of hunger.”

By simple logic, Jharkhand should be a prosperous state with nearly 40% of India’s mineral reserves, but the state has some of India’s poorest people as its citizens. Employment opportunities are few and nearly 80% of the population is dependent on the farm sector. But farming here is dependent on the rain water and villagers say inadequate rainfall over the past four years has reduced them to penury. Cynics call it a “rich state of poor people”.

Worried
We drive several hundred kilometres from the state capital, Ranchi, to Latehar, Palamu and Garhwa districts in the north-west.

Many villagers say they have received no rice since April
We stop in towns and villages and everywhere we come across people worried about the lack of rain and the crop failure. They beseech us to write about their plight, maybe then the government will put some food on our plate, they say.

The government says it is listening.
In the last few days, 11 districts have been declared “drought-hit” and authorities have announced free ration for people living below the poverty line in those areas from 1 August. “It is our top priority to ensure food security and survival of the people – our fight here is with hunger,” says Amitabh Kaushal, senior administration official in Palamu.

Mr Kaushal says the government has created a food stock for the infirm, the destitute and the disabled, and the poor: “We are working hard to reach areas which are not easily accessible. They are starvation-prone areas. We’re trying to identify them so that we can give them the benefits of these free food grains.”

Sceptical
Mr Kaushal says local officials have been asked to set up camps in remote areas to ensure that food reaches people in the remotest areas.

Mr Yadav says the government does not care
The villagers in Palamu and Garwah, however, are sceptical. “There is too much corruption in the system. Only a fraction of the money sanctioned by the government ever reaches the people. Is the government doing anything about it?” asks a bitter Mohammad Khairullah of Dhurki town.

He is speaking from experience.
There are existing government schemes to feed the poorest of the poor, provide them with free food grains or offer rice and wheat at highly subsidised prices.

But, across India, a lack of political will has meant the grains meant for the poor often get lost in transit – they are pilfered by corrupt officials and sold on the black market.

“If the government builds a dam on Kanhar river, it will irrigate the whole of Garhwa district And that will solve our problem But the government is interested only in projects which make them richer,” says farmer Nand Gopal Yadav. “Cruel weather and uncaring authorities are threatening our existence. No one really cares.”

“Tagging technology to track trash”

Tagging technology to track trash

By Jonathan Fildes
Science and technology reporter, BBC News

The ebb and flow of thousands of pieces of household rubbish are to be tracked using sophisticated mobile tags. It is hoped that making people confront the final journey of their waste will make them reduce what they throw away. Initially, 3,000 pieces of rubbish, donated by volunteers, will be tagged in New York, Seattle and London.

“Trash is almost an invisible system today,” Assaf Biderman, one of the project leaders at the Massachusetts Institute of Technology, told BBC News. “You throw something into the garbage and a lot of us forget about it. It gets buried, it gets burned, it gets shipped overseas.” The Trash Track aims to make that process – termed the “removal chain” – more transparent. Friends of the Earth’s Senior Waste Campaigner Michael Warhurst said the project could be a “useful tool” for highlighting the impact of rubbish. “[Waste] doesn’t simply disappear when we throw it away, and all too often it ends up causing damage when it could be recycled instead. “People must have much better information on – and control over – where their rubbish and recycling ends up.”

Global waste
In order to monitor how the pieces of rubbish move around the cities and beyond, the MIT team has developed a small mobile sensor that can be attached to individual pieces of waste. “It’s like a miniature cell phone with limited functionality,” said Carlo Ratti, another member of the project. Each tag – encased in a protective resin – continuously broadcasts its location to a central server. The results can then be collected and plotted on a map in real time. Volunteers can apply to have their trash tagged and tracked. “It’s like putting tracers in your blood and seeing where it moves around your body,” said Mr Biderman. Because cell phone technology is cheap and – importantly – ubiquitous, the system should be able to track rubbish around the globe. This could be important when tracking computers and electronic waste, which is often disposed of incorrectly, according to Mr Ratti. “Some of them are shipped to Africa to pollute,” he said.
The team aims to tag different types of waste from computers and cell phones to bags of garden waste.

The group is currently looking for volunteers to donate their trash. The results of the US studies will be shown at two exhibitions in Seattle and New York during September.

‘Zero waste’
The team stresses that it has tried to limit the impact of its study and of the technology, and limit the amount of extra waste it contributes to the “removal chain”. “We are adhering to the highest standards in terms of environmental impact,” said Mr Biderman. “The impact this could have on waste management and removal… could be significant, so these kinds of experiments could be much more useful than harmful for the environment.” The MIT team has previously revealed the movements of people around cities, such as Rome and Copenhagen, by analysing mobile phone signals. They used a similar method to show how crowds moved around Washington during the inauguration of US President Barack Obama. The tags used to track the rubbish are a departure from these more passive studies of city movements. Ultimately, the team hopes that the technology can be miniaturised and made cheap enough that the tags could one day be attached to everything. “Think about a future where thanks to smart tags we will not have waste anymore,” said Mr Ratti. “Everything will be traceable.”

View Video
Carlo Ratti explains how the tiny tags work

Tesco to help reform farming industry in India

India calls on Tesco to reform farming industry

British supermarkets could be called in to help India modernise its farming industry in the wake of the Congress Party victory in the country’s general election.

By Barney Henderson in Mumbai and Damien McElroy
Last Updated: 10:07PM BST 18 May 2009

The retailers, including Tesco, will be asked to overhaul the inefficient production and distribution systems which result in up to half of the annual crop rotting before reaching market.
Rahul Gandhi, heir to the party’s ruling dynasty and the strategist behind its surprise victory, is expected to be appointed agriculture minister to spearhead the reforms designed to raise rural incomes.

Congress won twice as many seats as its nearest rival, Bharatiya Janata Party (BJP), by promising to spread the fruits of its economic boom beyond the cities by unleashing the potential of hundreds of millions of struggling farms. Financial problems drive three farmers a day commit suicide in India.
Attempts to overhaul Indian agriculture under the outgoing Congress-led government were blocked by powerful communist parties within the coalition who refused to allow foreign companies to get involved.
Congress was able to improve its position largely at the expense of the communists and Manmohan Singh, the prime minister, is determined to freeze the extreme left out of the next coalition.
Foreign business experts hailed the results as a guarantee of stability at a time of global economic turbulence.

“The election results will benefit the business community in three ways,” Mark Runacres, head of the British Business Group in India said. “First, stability is great. Secondly, the results show that quality of leadership and governance has been rewarded. Thirdly is the absence of the Left from the ruling coalition. The Communists in India, who are not business friendly, have really taken a beating at the polls.

Mr Gandhi, 38 has suggested that the expertise of Western retailers in modern sourcing and storage systems must be introduced to aid Indian farmers.

“I think Rahul Gandhi and others like him are honest and understand how markets work,” Mr Runacres said. “He will certainly be keen to see standard business practises that we take for granted elsewhere in the world be introduced to India – not just for the benefit of the consumer, but also the farmer.”

A Tesco spokesman expressed its interest in working with the project. “We would strongly welcome any steps by the government to improve infrastructure and create a solid, good quality supply chain,” said a Tesco spokesperson.

“We are already helping to educate farmers in terms of food safety and hygiene, but better roads and refrigeration techniques will increase choice of products, hygiene and freshness and also help the export market.

“We are still learning a lot about India and the market, but we are hoping to expand and will launch our first cash and carry outlet in the (Mumbai) area next year.”

Restrictions that mean Tesco, which operates in India in partnership with local conglomerate Tata, and Marks and Spencers, which has a joint venture with Reliance Retail, cannot operate as local brands are unlikely to change. But the rise of a new generation of political leaders will see India demand that Western enterprises help to lift its disadvantaged masses out of the traditional cycle of poverty in return for access to its expanding markets.

“Use Technology for Social Development” Says Infosys Co-Chairmann

Use Technology for Social Development
Author: Nandan Nilekani
Co-Chairman, Infosys Technologies

I have rubbed my shoulders with two or three companies in the past two decades of my career. While one has been that of co-founding and running Infosys, the other has centered on bringing about improvements in systems of governance, working on developmental issues like roads, healthcare, and essential services, and so on.

In the initial years of my tryst with community development and social change, I thought that technology did not have any role in it. One of the reasons for this was the fact that I did not want to be perceived as yet another geek who thought that technology was the panacea for all problems of the world.

Yet, after trying to address the issue of social development for 15 years, I came to realise, reluctantly, that technology can, and actually does, play a great enabling role in the process. This is true especially of developing countries like ours, where solutions to existing problems need to be implemented on a very large scale.

But, let me first underline that any solution in a country like India must be scalable, given the large number of people it must reach; it must be cost-effective, since a large number of people are not economically well off; it must also be possible to deploy the solution in a short time; and above all, the quality of the solution must be good.

All these aspects are relevant to our work in technology. This strengthens the call for technology’s role in social development. Moreover, as you will see in the examples that follow, it has already happened.

Let me start with the elections; they are a humungous and, in more ways than one, an event unmatched in scale and scope by the elections that take place in any other country. Yet, the last general elections in 2004 were quite an achievement, since electronic voting machines were used across the length and breadth of the country despite the presence of largely illiterate communities in the vast rural areas. It made the process of voting hassle-free and counting was easy and fast. Incidentally, it took the Election Commission 27 years, by no means a short span, to implement the plan to use EVMs across the country, an endeavour in which technology played an enabling role.

The second area where technology has played a remarkably enabling role is mobile connectivity. 90 percent of the mobile phones in the country are prepaid, and 40 percent of those connections are recharged with average values of Rs. 10 or less. It points out how many poor have become connected, and how technology has played a role in terms of making devices and services cheap and easy to use.

Stock exchanges are also an area where technology has come to the aid of the people at large. Many will recall the colossal multi-crore share market scam involving Harshad Mehta in the early 1990s; that was when all transactions in the exchanges were paper-based nd therefore susceptible to frauds on a large scale. The developments in recent years have transformed the exchanges and all records pertaining to shares and transactions are now stored electronically. There are computer terminals across the country that are connected through the Internet, and share trading can be carried out from places as disparate as Agartala or Kanyakumari. This has ushered in equality and removed regional imbalance: earlier, over 80 percent of transactions were done in Mumbai, where the BSE (Bombay Stock Exchange) is located. Today, the city accounts for only 40 percent of the transactions.

Technology has also played a role in digitizing land records in Karnataka. 2,000 kiosks across the state now dole out land record certificates to farmers for a meagre fee of Rs.15. Gone are the days when one was required to bribe the revenue officer to get the certificate and the possibility of the officer changing the record without the illiterate farmer realizing the same.

All these point out the fact that over the next decade or so, technology can play a highly significant role in social development of the country. To this end, let me suggest a few things. Firstly wireless connectivity should be widely available across the country within the next decade. I don’t want to go into ideological issues as to which technology should be used to do that; what’s important is that all people are brought into the loop. Secondly, there must be a practical convergence of devices. There will come a time when everyone will have a device; again I will not go into the ideological question as to what that will be, but will only harp on the fact that information, services, education, healthcare, et al can be delivered through this device. Now, what does this mean? Let us look at the possibilities.

The presence of green house gases (GHG) in the atmosphere is ever-increasing; it is 430 ppm today against 270 ppm in 1850.We need to stabilize the level of GHG at 500-550 ppm by 2050, when an estimated 9 billion people will populate the world. This means that carbon consumption cannot be more than 2.5 tonne per person per year. At present, the figure for the U.S. is around 20 tonne per person per year; for Europe, it is 12-14 tonne; for China, 4-6 tonne; and for India, 2 tonne.

Obama has said that the U.S. will reduce its GHG emission by 80 percent by 2050. That will bring the per-person per-year carbon consumption in the U.S. down to 4 tonne. Our Prime Minister Manmohan Singh also has recently said that our emission will be less than that of the developed world at any given time. What does this mean?

History shows that there is a linear connection between increase in per capita income and energy consumption. Projections show that our GDP will grow to 16 times the present by 2050, but, if the PM’s promise is to be realized, carbon consumption cannot grow more than 4 tonne per person per year (that’s, at double the present level). Therefore, we need to take a hard look at our development model. The role of technology in this is huge.

Another area where technology can play a role is power. Presently, our power generation model is such that one plant produces 500 megawatt (mw) of power using conventional sources like coal. Instead of such mega power stations, by 2050, we will have 500 smaller plants producing 1 mw of power each using renewable sources like biomass, solar, and wind energy. Our power grids will have to be designed in such a way that they can handle varied sources of power that produce varied amounts of power at different times. The grid must be bi-directional, so as to regulate supply based on usage. They must have sensors and intelligence and enable variable pricing.

Subsidy is another area where technology must play a role. We need to move from indirect to direct subsidy. Take, for instance, subsidized power to farmers. In the present system, it is made free, thereby creating the need to enlarge the customer base that pays more for power to make up for the subsidy. Also, most of the time, the free power does not reach the poor farmers for whom it is intended.

We need to shift from this to a fresh model where we can identify the people who really need subsidy and direct it to them; this can be possible if all citizens have biometric identification cards. They can then go to kiosks and avail of subsidized power using, say a prepaid pool, which gets created based on the information in the identification card. This way, we will have no need to reduce the price of a commodity (say kerosene) as a whole, but only make it available to the needy at a lower price, while the rest of the market can pay the normal price.

While one can go on giving such examples, it is important that we, the people with the power to create new technologies and innovations, look at social development from the right perspective. We must then fruitfully contribute to realization of such development by changing the channels of delivery of services by making technology the enabler.