Thursday, December 03, 2009

Imagining India with Nilekani of Infosys

I am on a 2 week annual vacation to India. I have often written about seismic changes in Indian reality, realty and perceptions. On this trip, I came across Nandan Nilekani's book - Imagining India. A thick tome but a book that captures how India has transformed, is transforming and the challenges and opportunities for its future transformation. Anyone looking to understand India must read this book.

I am not going to try to summarize the book but here are some key points that touched me and where I agree with him almost entirely:

The Demographic Advantage
Growing up in India, you were deluged with the message - India is overcrowded and getting worse - and that the reason we could not get a telephone connection in time (it literally took months if not years) was because there were too many people; the reason our roads were always poor was because there were too many people; the reason only 1 in 1000 people could get into an engineering school of choice was because there were too many people. And the solution was to prevent "The Population Bomb" from exploding. This did not make sense to me as I saw crowded cities like Delhi and Bombay offer better lifestyle than my grandparent's villages in Himalayan foothills. And, from the limited exposure to foreign media - I could see that places like Japan and New York had more people per square mile but did not have starving populations. Something was wrong with the picture.

In reality, the problem was not population but the system governing the population - a thinly veiled socialist rule that tried to optimize our lives every 5 years in the famous five year plans.  Nothing much changed except the face of the politician that claimed to be solving all of our problems through the magic of socialism while fighting off evil capitalism and foreign hand in trade. This translated into very tangible effects on me and my family's middle-class existence:
  • No Books: While we were upper middle class by Indian standards, I distinctly remember that while I went to the best Indian private schools (some Catholic schools, some private run) - our textbooks were rather poor. And for a nerdy kid like me wanting to learn about everything from gravity to super nova, the only books I could lay my hands on were highly subsidized Russian books sold at Russian book fairs.
  • No Car: Our first car was a Fiat (that was based on a 1950's design) bought my father in 1988 for what was at that time his one year's salary. Imagine that - it would be the equivalent of an upper middle-class American paying $100,000 for a 2009 model car based on a 1960's design. 
  • No Phones: When I went to undergraduate school 2000 miles from my hometown (like going from East Coast to West Coast for college), I had no communication with my family for entire semesters except a solitary phone call from a manned phone booth. These phone booths usually had 2 hour long lines and a 10 minute call could cost you hundreds of rupees. 
I can go on and on about lack of basic medical care facilities that nearly killed me while studying at India's premier engineering school, or 'express' trains that took 28 hours to traverse 1500 kms with average delays of 4 to 12 hours.

Things are Better
Today, everything has changed and while India is far from perfect (or even functional) - its like India went from a 1900s America to 1950s America in 15 years in stead of 50. That's quite an achievement.

This transformation is creating massive opportunities at the bottom of the pyramid. These range from somewhat well-known $2,000 Tata car to small innovations like single use shampoo packets that cost $0.10 (ten cents). The impact of a ten cent shampoo or detergent for cleaning clothes is not to be underestimated. It transforms lives by giving the poor dignity.

If I had to pick two industries that have transformed the most and probably had the greatest impact on lives of people - it would be telecom and banking.

India went from 5 million in 1991 (mostly landlines) to over 500 million telephones (mostly mobile). In a nation of about 1 billion people, that means teledensity increased 100x. While these statistics are amazing, the impact on people's lives is even more so.

My Neighborhood Electrician 
Everytime my Dad needed an electrician for an odd job around the house, till 10 to 15 years ago - he would walk over to the neighborhood shopkeeper that sold and repaired transistor radios and televisions and had a few people on his payroll. He would dispatch one of his men and collect the fees from my Dad. The electrician that actually fixed the wiring or repaired our television (yes, the socialist era TVs needed fixing on a regular basis) would get to keep a very small percentage of the fees.

Today, the electrician does not work for the middleman. He has more than one mobile phone and we simply dial him directly. He shows up promptly, charges us a more reasonable fee and gets to keep all of it. This has at least 3 beneficial effects:
  1. No middleman means he gets to keep 100% of revenue and not 20% to 50%. This essentially at least doubles his income.
  2. Being able to respond to calls while working, he claims he now visits 2 to 4 times more customers a day. 
  3. We, the customers, get immediate and personalized service which is greatly more accountable.
So, the electrician that was making about $25 to $50 per month now makes $500 to $1000.

All of this is changing millions of lives. Watch Hans Rosling's TED India talk to see how rapidly this change is happening.

And watch the following video to see India's glorious technological past - water harvesting techniques perfected hundreds of years ago showcasing great engineering feats.


JP Sharma said...

It is an excellent write up,which sums up the factual position.
The I T revolution is not only shoring up incomes of electricians,plumbers, drivers,teachers,retailers and so on,but this also does provide a multiplying effect of rendering better & more satisfying services in all walks of life.
Good luck.

Unknown said...

It'a a great book. I hope his UID initiatives will be successful.