Archive for the ‘South Asia’ Category

India: Dragging the reluctant elephant into a digital, cashless future

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Final processing for India’s digital identity platform Aadhaar, New Delhi on 3 March 2017 (Photo Credit: Niti Bhan)

My recent immersion in Delhi a mere four months after demonetization (or, notebandi as it’s locally known) was a bit of a letdown. Oh sure, there were numerous, visible changes in the 2 years since my last trip – mostly very clear indicators of India’s socio-economic development – but none of the sense of chaos that I was expecting, having relied primarily on third party news sources, that too, in English, in the weeks leading up to my departure.

The headlines would have it that people were dropping like flies on the streets. A grand total of 187* people died visibly due to notebandi, or so I heard. The two most common responses were either sympathy – people should not have had to die for something like this and it was a sad thing to happen; or pragmatism – “people die everyday, who knows why, maybe his time had come and he was standing in line.”

The overall atmosphere was one of energy – there’s less of a sense of lackadaisical chaos that used to characterise the neighbourhood market and it’s sleepy vendors waiting for the evening strollers. There’s a sense of purpose in the hustle, as though there was money to be made. Digital money.

IMG_6950The combination of a digital identity platform and the disruption of demonetization could indeed be said to describe ideal conditions for triggering cashless India. Cards are accepted far more easily than before. “Paytm” – a local payments app – is visible everywhere, from on demand cars (Ola, Uber, Meru, etc), small kiosks, through to shiny upmarket shops. As a taxi driver told me with a smirk, everyone’s using Paytm now, even the beggars.

Rural India is said to have suffered far more, according to the reports I’d read prior to my trip. This might be unevenly distributed according to geography and growing season – a factoryworker returning from his home village in Bihar said he’d attended a wedding with hundreds of people and surely someone would have had a sob story to share.

Instead, he’d heard it was the intermediaries in the farm to fork supply chain who purchase from myriads of small farms in order to aggregate in bulk prior to selling onwards towards the cities who’d been hit harder by the sudden lack of liquidity. They were caught in the middle of the cash based chain of transactions and had to carry the burden of wastage if they weren’t able to move produce fast enough. Anecdotes included them distributing potatoes freely to farmers to use as seed for the next harvest, and tomato prices crashing.

Articles in the news state that the economy was hit harder than people would admit to but none, as yet, have complimented the common man for his endurance under conditions of scarcity and hardship, nor praised the hardworking women who kept their families fed through their social networks of give and take.

All the papers – domestic and foreign – only go on about India’s GDP, the economy, the vast business sectors, and the politics. If at all the average Indian is mentioned it is through the lens of pity – “oh, the poor farmer is suffering” or some such heartrending sob story from the “informal sector” – there’s never any mention of their ingenuity in keeping things going without cash; or the way it was all held together under conditions of adversity and scarcity.

IMG_7319That, perhaps was my biggest takeaway from my open ended conversations with a wide range of people from different socio-economic strata, professions, backgrounds, and age groups.

Their palpable pride in themselves in having come through upheaval relatively unscathed, or having the wherewithal to manage.  All the rest of it, the Aadhaar digital ID, the use of technology for transparency and accountability, the mobile platform and its ubiquity, all of these and more, I believe, will sort themselves out in time.

I’m minded to end this with a quote from Rositta J. Valiyamattam writing, ironically, on the topic of Indian fiction (page xii):

“Their novels testify to the amazing resilience of the masses in a nation wherein the commoner is rendered helpless by an often corrupt mighty polity. What stands out is the assertion of the individual will over uncontrolled powers and unfavourable circumstances. They salute the heroic struggles of ordinary Indians in times of extraordinary transformation.”

 

 

*Word of mouth number, every report has a different total, so whatever. All photographs not captioned were taken in Delhi by Niti Bhan during March 2017.

Time to reach consensus on the #informaleconomy debate

As yesterday’s post showed, the unforeseen outcome of India’s demonetization initiative on the rural cash economy arose due to the lack of disaggregation of all that tends to get lumped together under the umbrella label “informal”. Segmentation would lead to more impactful design of policy and programmes.

WIEGO has an excellent review of the academic debates on the informal economy, covering the competing schools of thought. There is the Shadow Economy with its tax evasion and under reporting vs the livelihoods of the poor struggling to make a living in adverse conditions.

From WIEGO:

In 2009, Ravi Kanbur, Professor of Economics at Cornell University, posited a conceptual framework for distinguishing between four types of economic responses to regulation, as follows:

A. Stay within the ambit of the regulation and comply.
B. Stay within the ambit of the regulation but not comply.
C. Adjust activity to move out of the ambit of the regulation.
D. Outside the ambit of the regulation in the first place, so no need to adjust.

Under the Kanbur framework, category A is “formal.” The rest of the categories are “informal,” with B being the category that is most clearly “illegal.” (Kanbur 2009). […] Kanbur argues that using a single label “informal” for B, C, and D obscures more than it reveals – as these are distinct categories with specific economic features in relation to the regulation under consideration.

While acknowledging that it is useful to have aggregate broad numbers on the size and general characteristics of the informal economy, Kanbur concludes that disaggregation provides for better policy analysis.

So, why do we continue to wave our hands over the whole thing and conflate the legal with the illegal?

These distinctions are all well and good to debate in the cozy conditions of a seminar room without needing to come to any consensus, but as the human and economic cost of demonetization in rural India becomes clear, particularly the impact on the planting season, it puts a spotlight on the shortcomings of the way the rural and cash economies are currently dealt with. A pragmatic conclusion is urgently required.

My literature review on the past 20 years of research on the informal trade sector in Eastern Africa showed that this lack of distinction between what was shadow (B) and what was merely below the radar of the regulations (C &D per Kanbur’s distinctions above) gave rise to the criminalization of even the smallest livelihood activities of the local tomato seller who might cross a border to get a better price for her wares.

This in turn led to their harassment – particularly financial and sexual – by the authorities as there were no counteractive regulations in place that recognized fulltime crossborder trade as a licit occupation or profession.

What will it take for this to change?

India’s current experiences provide ample evidence of the dangers of leaving this untouched.

Unforeseen outcomes of India’s demonetization shine light on the value of our design philosophy

Informal Economy, Market Analysis and SegmentationLatest news on India’s demonetization informs us how the rural economy is bearing the brunt of this initiative.

The action was intended to target wealthy tax evaders and end India’s “shadow economy”, but it has also exposed the dependency of poor farmers and small businesses on informal credit systems in a country where half the population has no access to formal banking.

The details shed light on the consequences of implementing interventions without a holistic understanding of the landscape of the operating environment. In this case, it is the rural, informal cash intensive economy.

…the breakdown in the informal credit sector points to a government that has failed to grasp how the cash economy impacts ordinary Indians.

“It is this lack of understanding and not appreciating the importance of the cash economy in India on the part of the government that has landed the country in such an unwarranted situation today,” said Sunil Kumar Sinha, an economist and director of public finance at India Ratings.

This lack of understanding the dynamics of the cash economy (I don’t mind calling it the prepaid economy, in this context) and it’s role in the rural Indian value web has led to unforeseen challenges at a time when farmers are planting seeds for the next harvest, hampering the flow of farm inputs as traditional lines of credit face the obstacle of an artificial shortage of liquidity.

I want to use this clear example of systems design failure to explain my philosophy and approach to our work in the informal economies of the developing world. I’ve written often enough about what we do, now I have an opportunity to explain why we do it, and why it’s important.

Read On…

Africa’s Middle Class: Development economics and marketing demographics conflating the holy grail

The most developed nation on the African continent, south of the Sahara desert, is considered to be South Africa with its financial and transportation infrastructure and systems, a legacy from history. In the first decade of the 21st century, the black middle class – known as Black Diamonds in marketer jargon – came into prominence on the back of numerous economic initiatives after the fall of apartheid.

img-south-africa-consumer-goods-02The rise of the Black Diamonds was meant to be the signal of a changing rainbow nation, one whose peoples would finally be included in the social and economic advancements long enjoyed by a privileged minority. This emerging middle class was also among the first to be noticed as African consumers in their own right, and their discovery pioneered the subsequent search for the now mythical African middle class. Even then, their total number was under scrutiny for its aspirational inclusivity versus actual households fitting the conventional definition of a middle class. From The Economist writing in 2007:

The University of Cape Town’s Unilever Institute of Strategic Marketing says there are now 2.6m “black diamonds”, as it calls the black middle class, a 30% increase in less than two years. Included in the definition are working professionals; those who own things such as cars, homes or microwave ovens; university students; and those who merely have the potential to enter these categories. The survey estimates that these black diamonds represent 12% of South Africa’s black adults, and make 180 billion rand a year ($26.2 billion), or 28% of the country’s (and more than half of all black South African) buying power.

For some, such as Lawrence Schlemmer, a sociologist in Cape Town, this definition is far too broad to be meaningful. He agrees that numbers are rising fast but argues that they are still tiny. Last year, he says, only 322,000 black South Africans (less than 1% of the black population of 38m) could be deemed “core” middle class, a far cry from 2.6m black diamonds.

Still, whatever their size, the buppies are affecting the economy and the political landscape.

This week, a comprehensive new survey by the South African government shows the on the ground reality in 2016. The National Income Dynamics Study (NIDS)‚ launched by the Department of Planning‚ Monitoring and Evaluation (DPME) in Pretoria surveyed 28‚000 people who were tracked every two years from 2008 to 2015. Very similar in fact to the recent household panel survey completed in India. Even their conclusions resemble each other:

According to the study‚ those in the middle class have a tendency to drop in and out of poverty.

And the size has not actually changed much since 1993 – the year before the fall of apartheid and the election of Nelson Mandela.

The study also shows that the South African middle class is much smaller than estimated‚ sitting at around 14.5% of the total population in 2014. Women are more affected by poverty, and even those who manage to climb the ladder may slip down again.

“…It has not grown much since 1993 — growing its share by only two percentage points in the past 23 years…”

20151024_mac237And, perhaps, the real challenge we face with the ongoing search for Africa’s middle classes is the conflation that took place back then between a consumer marketing segmentation and a socio-political demographic.  By allowing the aspirational reach of the consumer marketing driven research to inflate the size of the segment classified as middle class, it has given rise to an ongoing and complex muddle across teh entire continent. As the AfDB’s former president Donald Kaberuka said last year:

“I think we are wasting too much time on the definition of the middle class and the cut off point, it is a sterile debate.

“A dynamic middle class that rises with the sea increases domestic demand, the diversity of the economy, [its] resilience, and they also stabilise the politics of a country as well, since they have a stake in the system.”

He has a point. But perhaps not the one he intended to make. Instead, if we consider disentangling consumption and demand for consumer products from the increase in political voice and “stake in the system”, we may in fact discover that there is indeed a sizeable bourgeoisie emerging even though they may not possess all the qualifying criteria traditionally attributed to a middle class per se. (Previous posts on this topic have been tagged informal bourgeoisie)

There’s the demographic segment which is the middle, and then, there’s the conceptual body of solid citizens invested in the democratic stability and economic growth and development of their countries. As Jacques Enaudeau wrote in 2013:

But fixated on wealth, the discussion on middle classes in Africa misses out on the other two pillars of social stratification: social status and political power.

As soon as those two are factored in, discussing the “African middle class” as a homogenous entity seems absurd, and so it should. Thinking that what separates the senior civil servant from the street hawker or the country head of a multinational from the shop owner is a matter of daily expenditure amounts to looking at their reality through the wrong end of the telescope: the bigger picture is that they live in different worlds.

In the developing world, the formal sector with its white collar jobs populated by university graduates may jostle cheek by jowl with the informal economy’s life lived on the street but that proximity might be on the only thing they have in common.

For here lies the rub: the material culture that the notion of “middle class” posits as shared consciousness is articulated to a strong sense of individualism, which is borderline contradictory with the idea of class. All the more reasons for the analysis to consider the representations which members have of themselves as a group and the historical context in which such groups are being shaped.

This, however, is not the post to unpack those complexities of self image and collective consciousness. It’s one which pauses to ponder the newest set of findings on the dynamic nature of poverty and wealth in the more uncertain and volatile operating environments of the still developing world. And considers the South African example introduced today:

There has, however, been considerable demographic transformation within that band of the middle class, with Africans now outnumbering whites by about two to one, the report said.  Factors driving the surge include greater access to credit, improved education levels, BEE and improved economic growth until recently.

Transformation of societies is underway, just as the Indian researchers concluded in their analysis. This might be a much larger global trend underway, whose weak signals we’re just beginning to pick up now. I’ll be following up with these musings on the blog. The people with the real problem on their hands are the consumer companies looking to justify entering the African markets, and perhaps that’s a topic to take up in the next article.

Research Question: Why is the informal retail sector so persistent and resilient?

retail2Retailing in India is currently estimated to be a USD 200 billion industry, of which organised retailing makes up 3% or USD 6.4 billion. By 2010, organized retail is projected to reach USD 23 billion and in terms of market share it is expected to rise by 20 to 25%. (Sinha et all, 2007)

These claims of projected growth were made based on a 2005 KPMG report on the Indian Consumer market, while the chart itself with it’s aspirational forecast is from the IBEF website. I have been watching and waiting for more than ten years for India’s retail revolution to take place.

The consistent message from the beginning of the retail boom has been that since the organized retail sector (what we would call the formal) has only been ~2% of the total retail trade in India (the balance is informal retail) there was ample opportunity for growth in modern retail.

Yet if you look at the data from 2015, you’ll see that the forecasts were far too ambitious (or, perhaps, aspirational, in the push for modernization driving India’s recently opened markets) – formal retail has only reached 8% penetration in the past 10 years. Nowhere close to the 25% expected by 2010. Mind you, these were all the management consultancy reports bandying the numbers around.

I bring this up because I’m seeing the same kinds of projections happening right now for the African consumer market by the very same firms. And with very few exceptions, the majority of the SSA markets tend towards the same kind of proportions of organized vs unorganized retail  (formal vs informal, modern vs traditional et al are all variations on this theme with minor differences in definition).

And, even as the retail real estate development investments are booming, we are already seeing the very first signs of the same challenge that India faced – over capacity, low footfalls, and empty malls. Just yesterday, the news from Ghana – a firm favourite of the investment forecasters –  has this to say:

Ghana’s economic woes have translated into a variety of challenges for formal retailers who are competing for sales alongsidethe dominant and deep-rooted informal shopping sector. According to a recent report by African commercial property services group Broll – titled Ghana, Retail Barometer Q2, 2016 – overall sales in most modern shopping malls are well below historic averages, despite garnering sufficient foot traffic.
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“International players are also looking at the market and re-adjusting their product/pricing mix to cater for the real middle class, whereby we are talking more in terms of value products rather than high-end products.”

And, retail developers are turning their attention to secondary cities such as Kumasi and Takoradi, as Accra reaches saturation point. The exact same pattern as we have been seeing in India. You would think people might pause a moment to take a look at similar markets and operating environments to assess patterns of market creation development.

This pattern is what gave rise to the research question I would like to frame – why has the informal retail sector been so persistent and resilient? What does this mean for modern trade? And, what are the implications for urban development and planning?

The trajectories of the Indian and the Ghanaian economies have taken different turns, thus, while one might point to these factors as the reasons for the challenges facing the mall owners and the retail brands, the big picture over the past twenty years points to something more fundamental in these operating environments common to the developing world.

That is what I would like to find out.

Japan’s Indian Strategy for the African Consumer Market

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One of the most high-profile events Kenya has hosted since independence begins this week when heads of state from across Africa and the Prime Minister of Japan Mr Shinzo Abe jet in for the Tokyo International Conference on Africa Development (TICAD). It will be the first time that Ticad has been held outside Japan and it is an honour to Kenya to have been picked to host this event. ~ Daily Nation editorial

The Nikkei Asian Review has been preparing for days with longform articles on the African consumer market, and other opportunities for Asian businesses. While Indian B2C investments have been closely analysed (and embraced), it is clear that the East Asians are eyeing each other as their closest competitors.

Africa was once dominated by Western investors, due to ties forged in colonial times. But Chinese companies have muscled their way in, and Indian, Japanese and South Korean players are arriving and thriving. This intense competition is no longer just about extracting minerals and materials. It is about tapping the next big consumer market.

Their articles are well researched and provide ample insights for businesses contemplating these new markets. Here are some highlights that caught my eye:

Vivek Karve has a clear picture of the ideal African market. The chief financial officer of India’s Marico, a maker of hair and body care products and other fast-moving consumer goods, said his company targets countries with “per capita GDP under $5,000, many mom-and-pop shops, low penetration of multinationals and political stability.”

There’s little handwringing over lack of data or missing middle class metrics. Inadequate infrastructure and informal retail in Africa is no different for your average Indian FMCG brand than their domestic market, thus the concept of the ideal market being one full of little mom and pop shops.

Marico’s strategy for achieving that includes promoting local brands familiar to African consumers, rather than pushing products that are popular in India. It uses multiple distributors to cushion itself against credit risks.

The Japanese, having already faced off with the Koreans in India’s large, diverse, and fragmented markets, are ready to take a leaf from the Indian playbook for their foray into the African market.

The gap between Asian and Western rivals is expected to narrow over time, with China making up much of the ground. About 3,000 companies from China — Africa’s largest trade partner since 2009 — are doing business in sectors such as infrastructure, resource development and telecommunications.

And even this focus on infrastructure development and large scale investments is changing. The Chinese idea is to boost purchasing power across Africa and turn the continent into a massive consumer market.

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Nissin Foods launched locally sourced sorghum noodles in Nyama Choma flavour in Kenya

The Japanese are preparing the ground to apply their own strengths in Africa. Japanese companies see Africa as a lucrative but daunting challenge — one they would rather tackle with a partner or subsidiary that is familiar with emerging markets.

This, again, is where India comes in. Toyota Motor, Honda Motor, Nissin Foods Holdings and Hitachi all export from their factories in India to Africa. The Japanese government is actively working to help companies make inroads in India as a springboard to Africa.

A couple of years ago, the Ministry of Economy, Trade and Industry compiled a list of potential Indian partner companies with strong African operations in 16 fields, including beverages, consumer goods, retail, electronic parts and auto components. Godrej Group and Marico were among them.

The lessons of the last quarter century are driving a new collaborative strategy. My rupees and yen are on Asia.

Lessons for toilet builders from the history of India’s cookstove development efforts

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Learning from the maker, herself. Rawal village, Rajasthan, India in January 2009.

Vaishnavi Chandrashekhar has written a superb critical analysis looking back at the history of India’s development efforts to provide viable, feasible, and desirable solutions to the myriad unmet needs of the common man. Using cookstoves as her narrative theme, she explores the challenges of base of the pyramid product development and marketing, and draws lessons for “the toilet builders of today.” A must read for social enterprises, entrepreneurs and design for impact.

Years after its big launch, India’s stove mission is going nowhere. A new government is in power, and another object meant to save the rural poor is now galvanising excitement. Companies such as Indian Oil, L&T, Tata Consultancy Services and Vedanta, among others, have pledged to build toilets to stop people from defecating in the open. Meanwhile, the cookstove programme has practically vanished from view, quietly renamed the Unnat Chulha Abhiyan and downsized.

This was not the first time a big push for clean cookstoves started only to falter. The history of India’s cookstove programmes parallels the evolution of the global development agenda, shaped by the geopolitics of each era—saving forests in the 1970s, improving women’s lot in the 1990s, preventing global warming in the 2000s. Since the 1970s, development agencies and governments around the world have spent millions of dollars promoting clean stoves as the solution for a succession of big problems. These programmes reflect a yearning, among nation-builders and international donors alike, for silver bullets—objects that are quantifiable technological solutions, but also symbolic, such as vaccines, mosquito nets and toilets.

A timely find, as the World Bank et al renew their PR push to promote toilets over mobile phones. The rise and fall of the “next big thing” for the poor is as much a trendy hip thing of the moment as any 15 minute internet celebrity. As silver bullets emerge and disappear according to donor whims and fancies, its the poor who suffer from half baked solutions and incomplete projects left behind like abandoned children’s toy in the sandbox.

Badly trained, reluctant stove-makers meant bad stoves. In one Haryana village, 67 percent of users said the new chulhas were too high, and over half said the cooking holes were too small for their pots. In Punjab, many families found their fuel consumption increased. In Orissa, chimneys were removed because villagers feared their thatched roofs would catch fire. In one village, a row of houses did burn down. “We couldn’t talk about chulhas in that area for years,” said Sarin.

There was also a more fundamental issue: the programme’s goals were out of sync with what women wanted. While the focus was on making stoves that consumed less wood, women wanted ones that emitted less smoke, or cooked faster.

As always.

As for clean cookstoves, she came to the conclusion that structural problems couldn’t be solved with single-point interventions. “Designing a smokeless biomass chulha,” she said, “is in some ways more complex than designing a nuclear power plant.”

And in India, we note the same issues that plague the  sales of “objects to replace dirty stinky kerosene” and other things that are good for you, like oatmeal.

Over the years, Karve found that even better-off rural communities were not persuaded by arguments about health, the environment, or even time saved in cooking. Women’s time and health were not valued; any family with Rs 1,000 to spare would first buy a mobile phone. She came to believe that the “aspirational value” of the stove had to be engaged. Like any successful consumer product, “the price has to be right, the benefits outstanding, and it has to look good,” she said. “It has to be cool.” That kind of hard-sell made Karve, with her “NGO mindset,” uncomfortable.

Is that women’s health is not valued, or that the rupee invested in the mobile phone brings back a greater return than the rupee sunk into a stove or toilet? What are the assumptions we are making on why people choose  to make these trade-offs, and how does that bias us so that our own assumptions end up being consistent barriers to new product introductions to this target segment? We have enough years of experience with the stoves and toilets and water purifiers to want to pause and reflect by now.

“Why must the global alliance for a developing-country problem be headquartered in Washington?” he said in an interview in his IIT office, in 2013. Besides, he wasn’t sure that the GACC’s market-driven approach was the correct one. “I’m always worried when people say there’s only one way to solve a complex problem,” he said.

Which brings us full circle to the problems of toilets and the bank.

Breaking the caste barrier: Aspirations, upward mobility and the brass ring

We don’t talk about this much. India’s caste system is an intangible barrier to upward mobility. We assume the ‘untouchables’ are a one lumpen mass of poor. Is the post liberalization economic growth finally offering opportunities for change?

“Post-liberalization, the country witnessed a transition from the caste-based occupations and services to modern businesses. Looking at so many self-made people from different communities across the country, aspirations among more and more people started rising, they started taking risks and are now competing with the market (irrespective of the caste),” says Milind Kamble, founder of the Dalit Indian Chamber of Commerce and Industry (DICCI), an organization that brings together all the Dalit entrepreneurs in India under one umbrella.

According to DICCI, there are more than 30 Dalit crorepatis (billionaires) in the country.

Although, there is no reliable data on the profile of scheduled caste entrepreneurs, as per rough estimates of DICCI, there are 1,000 Dalit entrepreneurs with combined turnover of Rs.60,000 crore.

Reading Siddhant Kumar’s story reminds me of CK Prahalad’s immortal words on the tyranny of dominant logic.

ckptyranny1Taking this concept a step further, we can say the same about Indian beliefs. Innovation was a top down process, designers came from elite English educated families. Instead, what we have here, is a designer from IIT Bombay who breaks the rules.

“While all entrepreneurs in India face obstacles because of lack of credit from the formal banking system, potential Dalit entrepreneurs are doubly handicapped because they almost invariably lack the collateral and also because of their more limited access to informal credit through community networks,” according to the book Defying the Odds: The Rise of Dalit Entrepreneurs by Devesh Kapur, D.Shyam Babu and Chandra Bhan Prasad.

Note that the very same tools inspiring young Africans to break free of their expected roles (jobs in government) and start online businesses, are what offered Kumar his break – e-commerce, and dreams of the brass ring.

NB: It isn’t just the Dalit who face caste based discrimination, every caste faces prejudice and stereotypes, so much so that my father too dropped the caste marker from my name and gave me his middle name. We are Gupta, the greedy, grasping, miserly moneylenders of middle India.

Key Insights on the Reality of Rural India: Socio-Economic & Caste Census data

Recently, India released a selection of data from the 2011 Census of India – their focus was rural India’s socio-economic reality, primarily aimed at policymakers and programme designers. This was the first time the Government of the Republic of India has collected information on caste. The last such census was back in 1931, by the British Raj.

I’ve gone through the standard talking points and a variety of articles online to synthesize and pinpoint the factoids that caught my attention.

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Rural Rajasthan is India’s least literate state. Photo Credit: Niti Bhan, Sawai Madhopur

Mobile  phone ownership – More than 2 out 3 households

While only one per cent of rural households own a landline phone without a mobile, a whopping 68.35 per cent have mobiles as their only phone(s). In Uttar Pradesh, as many as 86 per cent rural households own no phone but mobiles. Households with both landline and mobiles constitute an additional 2.72 per cent of the rural population, with Kerala the highest among the states at 28.33 per cent. In Chhattisgarh, this is particularly high at 71 per cent, mainly due to lack of connectivity and mobile towers, a reflection of the lack of development in the state. Source

India rural census

Literacy and Education – More than 1 in 3 illiterate

Educational levels remain dismal, with over a third of rural India illiterate. The proportion of those passing through the primary, secondary, senior secondary and higher secondary stages drops at each successive level, from nearly 18 per cent to 5 per cent, while only 3.45 per cent are graduates or above. The highest proportion for graduates is in the National Capital Territory and Delhi, at 9.6 per cent; among the states, Kerala tops at 8 per cent. Source

Rajasthan leads the pack of illiterate states with 47.58% of its population falling in that category, followed by Madhya Pradesh with 44.19% of its people in rural areas being illiterate. Bihar is at the third place with 43.85% and followed by newly carved state Telangana with 40.42% population belonging to this category. Source

Informal Sector and Irregular Incomes – 9 out of 10 people

Rural India remains largely dependent on self-employment or the unorganised sector. Less than 10 per cent households are dependent on salaried jobs, of which the majority are in government jobs. Also, 0.09 per cent of rural households are houseless, compared to 0.15 per cent in the urban areas. Source Fewer than 5 per cent pay income tax. Source

villagesNearly one in every three rural households still have an uncertain source of income and continue to live in one-room kutcha houses. They compose 31.26 per cent of the 17.91 crore rural households covered by the census — and will now be considered as ‘poor’,  eligible for benefits applicable to Below Poverty Line (BPL) families. Of the rural households covered, 21.53 per cent belonged to scheduled castes and tribes Source

Over half of rural India owns no land at all. Among households who do own land, 40 per cent is not irrigated. Just 4 per cent own any sort of mechanised agricultural equipment, and just 10 per cent own any irrigation equipment. Fewer than 4 per cent have an agricultural credit card that entitles them to at least Rs 50,000 per month. Source

The Big Picture

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New Delhi Notes 2015

I was in New Delhi for just over a week at the beginning of June, visiting after a period of 3 years, and so many things caught my attention that I thought I’d do a round up of my observations, just like I did 10 years ago.

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Systems implemented and working. The impact may not be visible to a first time visitor or someone living through it. Immigration at the airport didn’t need me to fill in a disembarkation card anymore. As a citizen with a machine readable passport, I was ‘in the system’ already. The bank was virtually empty. I’d never seen it so desolate until I noticed this e-Lounge next door. My request for a debit card was handled instantly and the card handed over. Yes, I can use it for internet payments too. Ooh, I’m now part of the Great Indian E-commerce boom.

smallbankSo, Sanjay tells me all about ‘those purchases you make and then they send it to your house and you can use Paytm’ – e-commerce, without ever once using the world Internet, e-commerce or speaking in English. His own commitments (the last baby turned out to be twin girls) keep him from splurging on a smartphone but he keeps a SIM with his Whatsapp and Facebook accounts to use on his friend’s phones. Sanjay is my go to “aam aadmi” or representative of the emerging Indian middle class, in the classical sense. He’s a blue collar worker in maintenance, with a motorcycle, consumer electronics and a daughter in private English medium schooling. He only has vocational training and high school equivalency certificates.

IMG_2219This startup received 9 million dollars in funding and splashed out with billboards in key neighbourhoods. Brother in law who’s head of McCann Erickson in India tells me its the classifieds they use. And yes, this ad shows one of the unique issues of going online in India.

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Gentrification is everywhere. Even in the jhuggi-jhopdis. People’s clothes are brightly coloured and modern and cheap. I bought two excellent t-shirts for Rs 150 each ~ 2 euros and some odd cents, at least 40% cheaper than similar street vendor prices in ye olde shopping mecca of Singapore. I mean, branded coconut water kiosks, really?

smallmobilityThe Metro is bringing mobility on a scale that’s changing the landscape of the city. Another 3 years and where will we be?  What struck me was even with the worst heat wave in years, the power went off only once, that too for a couple of hours, something that had never happened before. Summer is always the time for load-shedding due to the higher consumption of air conditioning and other electricals.

smtaxiAnd if you have money, its app-driven public transportation for you. Ola is what everyone talks about. Apps are becoming commonplace. 10 years ago, when I was first told to keep an eye on the mobile phone and way it would change things, in everyday life, was this the future we’d envisioned for ourselves?

IMG_2200But for all that technology and infrastructure and systems, cash is still king with many shopkeepers laughing off mention of mobile payments and gizmos to stick to what they know. Paper and coins.

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The informal sector is still the provider of income and employment for the majority and the mindset of scarcity means the culture of repair, re-use, re-purpose and resell hasn’t gone anywhere. Even if its been glitzed up with spit and polish.

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Its never going to be “normal” or “conventional” but its definitely signs of social and economic development. India has come of age.