India’s Empire State of Mind

Photo credit: http://nimis540.wordpress.com

Just last week, McKinsey Global Institute (MGI) published a seminal report on the future of India’s urbanization.  Some numbers they’ve calculated are totally staggering: for instance, did you know that by 2030, 590 million people will be living in India’s cities?  That’s twice the population of the United States today!  And did you know that to help these 590 million people get around, 7,400 kilometers of metros/subways will need to be constructed?!

After reading the exec summary, all I could think was how India certainly has her work cut out for her.  MGI paints a fairly grim picture of India’s cities today (e.g., citizens have access to 105 liters of water when they should have 150, only 30% of sewage is treated) and claims that in order to reverse the “urban gridlock and decay,” the country needs to invest $1.2 trillion in capital expenditure by 2030.

$1.2 trillion!  I feel like Dr. Evil wouldn’t even know what to do with that kind of money.

MGI, however, has a few tips on how to proceed.  Specifically, they believe that India should concentrate its resources – monetary and otherwise – on five areas to be successful:

• Funding: How can India pull these resources together?  (MGI suggests monetizing land assets, collecting higher property taxes, and forming strategic public-private partnerships… in conjunction with “formula-based government funding”)
• Governance: Who is the least corrupt group of people to manage this mammoth task?  (MGI suggests that India needs “empowered mayors with long tenures and clear accountability for the city’s performance,” along with building functional metropolitan authorities)
• Planning: How can India develop the opposite of the existing sab chalta hai, everything goes, attitude towards city planning? (MGI believes that a “cascaded” planning structure, focused on public transportation and affordable housing, can help India save >6 million hectares of arable land)
• Sectoral policies: How can India create sustainable policies for affordable housing, climate change mitigation, job creation, and public transport?  (MGI concentrates on affordable housing, and says that in order to get it up to par, India needs to increase housing stock through a combination of incentives and subsidies)
• Shape: How should the country’ population be distributed for maximum benefit? (MGI suggests that India invest in its Tier 1 cities and large Tier 2 cities, while ensuring that services in smaller cities are brought to a “basic standard”)

Can India do all of this?  Can it muster the finances, the political will, and execution muscle to make this happen?  MGI gives the country some lofty goals, but is optimistic that with strong backing from the central government, it can achieve many of them.

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Lay off my blue suede mojaris: A tale of Rajasthani shoemakers

A shoe cobbler I met in Udaipuria

In Udaipuria, a village in the northwestern Indian state of Rajasthan, sits a shoe cobbler.   His hands, much like his products, are brown and leathery.  He has been making shoes—in his case, ethnic mojaris—for almost 50 years.  Over this time, he has sculpted innumerable shoes, taught innumerable apprentices, and observed innumerable changes in the business.

“When I began making shoes, they were all for kissans, for farmers,” he says, not missing a beat from hammering a new shoe to life.  “That is not what happens anymore.  A few of us still make shoes for farmers, but most work goes to big cities.”

Such has been the case since 1997, when the UNDP (UN Development Program) and RUDA (Rural Non-Farm Development Agency) launched “Operation Mojari.”  Recognizing the potential urban market for Rajasthani shoes, this program was designed to help artisans to thrive well beyond their home villages.  As a result, Rajasthani shoemakers began to see markets and money they never before imagined—that is, until the intervention ended and market forces resumed.

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Altruism Reloaded: Seeking work with impact

Published in Microfinance Insights, May/June 2009 (I just realized I never uploaded it here!). Read the article here, or just see the text below.

Depending on your perspective, Sarayu Natarajan either had an impressive or underwhelming first day as a management consultant with McKinsey & Company.  As she entered the marble-tiled office, she was escorted to the IT room, where she was given a laptop and related accessories.  She was then provided with a bank account, where her healthy salary would automatically be deposited every month.  She was introduced to her mentor (“Development Group Leader” in McKinsey-speak), who promised her an intellectually rewarding career, while gently warning her of the potentially erratic hours.  She even met the travel team, who would book business class flights and five-star hotels for her whenever required.

By conventional standards, Sarayu had “made it” in the post-college, professional sense of the phrase.  After excelling at one of India’s top universities, she had been recruited by a prestigious multinational firm, a path that was understood and respected by her peers.

So why did Sarayu – along with a growing number of talented consultants, investment bankers, venture capitalists and other professionals – decide to give it up?  Why are individuals moving from a plush professional life to careers in the social sector,¹ which are, by definition, not as glamorous or as remunerative?

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Thrust Funds: The Ultimate Wild Card

Published in Beyond Profit magazine, April 2010.  Click here for the PDF, or read the text below.  And share your thoughts!

Suppose that you are a socially minded individual with US$300,000 of spare cash to invest.  You want to invest in something socially relevant and, if possible, something unique.  You do not mind waiting years before seeing your returns materialize; as long as your money is helping society progress, you consider your investment solid.  Given these conditions, how would you invest your money?

Three young social entrepreneurs have boldly declared that, for investors with these criteria, they would be worthwhile investments.  Unlike most up-and-coming entrepreneurs, they are not looking for investments into their organizations; rather, they are looking for investments into themselves. They are essentially asking for large upfront infusions of equity, which they will use as they see fit. In return, they are offering a percentage of their annual income–specifically, 3-6%–for life.

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