For tips on frugality, look to India – read the title of a NYT article. Being an Indian I could never debate that. The idea of saving a buck or two is deeply wired into Indians. Indians still have a healthy 30 percent savings rate, though cheap and easy credit is trying hard to change that. ‘By-two coffee’ is a famous expression here in India and probably the most ordered drink. You might think of it as a special kind of coffee, but in reality it is two people sharing the same coffee – in two different cups of course.
There are many things like these that make frugality a birth right of every Indian. From ‘by-two coffees’ to re-gifting gifts, missed calls and shared autos – India has it all. Amartya Sen has written the book ‘Argumentative Indian’. Someone should write a book called ‘Frugal Indian’.
This is all good news and in good spirit though. Frugal India is one of the many reasons why expensive phones never made it big here. It’s the low-cost phones like Nokia 1100 which have mass appeal. Even people who can splurge do not really spend all that much money, except if they want to show off. Any product should have a tag – value for money – associated with it.
India can be the test bed for all kinds innovations across the world. There are many other innovations which happen in India for India. From a ultra-low-cost mobile phone and a cycle charger to go with it, to a $35 tablet PC, there’s no end to what India can consume.
Here are the 10 frugal innovations:
- Tata Nano: Tata is an Indian company which produces cars ranging from luxury models to the cheapest money can buy. The 1 lakh (US$2,259) car or the people’s car is finally a reality. With a rear-engine, no boot space, one windshield wiper and a whole lot of plastic to reduce the weight of the car, Tata’s Nano is a frugally engineered car just for the Indian market. It is targeted at families who use two-wheelers as a mode of transportation.
- Husk Power Systems : Husk Power Systems (HPS) has a noble goal – electrifying rural India. Mind you that’s 70 percent of India and it has been a major challenge for the country. HPS uses discarded rice husks to generate electricity. And there is no shortage of discarded rice husks as India is the biggest consumer and producer of rice. And rice has to come out of the husks. HPS operates 35-100 kW mini-power plants and electrifies off-grid villages in India. Over 50,000 rural Indians are powered with HPS power plants.
- VNL – Solar powered GSM base station: VNL, a Swedish-Indian company, is trying to solve the power problems of telecom tower stations. Sixty percent of the operational cost of running a telecom tower is fuel. Fuel is mostly diesel as most of India still grapples with erratic power supplies. In fact, electricity, or the lack of it, is the main cause for the lack of rural penetration of broadband and telecom. VNL has designed do-it-yourself telecom tower stations which use solar power and wind power. That would cut the operational cost of a telecom tower in half and would facilitate the deployment of these towers in hard-to-reach places which have erratic or no power supply.
- GE MAC 400: A part of a poly-centric innovation drive from GE, GE MAC 400 provides a hand-held ECG device that costs only a fraction of its bigger cousin. The regular ECG device costs $10,000 and GE MAC 400 costs $1,000. The reduced cost did not affect the quality. GE MAC 400 helps doctors predict and diagnose patients who are at risk of heart disease. Though GE has its research center in Bangalore, most products are not targeted at the Indian market. GE’s products are usually expensive for Indian market as they are targeted at the US and global markets. GE has turned this upside down with it’s GE MAC 400. It’s part of GE’s reverse engineering initiative to produce products which are designed for India, by India, in India.
- First Energy’s Oorja: Cooking gas or LPG, which is sold in 14.2 kg cylinders, is sold at an average price of Rs. 370 ($16). This would help a family of four cook meals for a month. This looks affordable as the government has subsidized it. The private rate or the unsubsidized rate for the same cylinder is Rs. 650. Yet the LPG, a much safer way to cook, is not affordable for most of Indians. Indians who cannot afford LPG resort to wood and other materials which help them cook meals but put them at the risk of indoor air pollution. An estimated 400,000 people die every year because of indoor pollution. First Energy is trying to solve two problems – clean cooking and affordability. The stove costs $23 and the pallets needed to keep the stove running cost $5.5 per month. Half a million of these stoves have been sold across three Indian states.
- Godrej Chottukool : India’s monsoons are lethal and summers are brutal . Summer is the time one would want to migrate to a cooler place. Summer is also a time one is in most need of a refrigerator. Entry level refrigerators cost upwards of Rs. 7000 ($150). This would put the cool box out of reach for many Indians. Enter Chottukool from Godrej, a refrigerator for the frugal India, which costs Rs. 3,250 ($74). Chottukool, which looks like a glorified icebox, doesn’t have a compressor, runs on a battery, has a capacity of 40 liters and weighs just 7.8 kg. Godrej still has to mass produce Chottukools, but it is a reverse engineered product which is being dubbed as the Nano of refrigerators.
- Tata Swachh: This nano-tech water purifier from Tata (who else?), is the world’s cheapest water purifier. A much-needed innovation for India’s muddy drinking waters. Swachh costs Rs. 749. Swachh purifies water using a bulb-like water purifier component made of rice husk ash and nano-silver particles. No electricity is needed. Each bulb can purify 3,000 liters and the cost of maintaining it is 30 rupees per month for a family of four. Hindustan Unilever has a similar a low-cost water purifier called PureIt which targets the same segment with a slightly more costly device.
- Vortex – Solar powered ATM: For a population of 1.2 billion India, at the end of year 2007, had 32,000 ATMs. Or 32 ATMs per million – a very low number. Having more ATMs doesn’t necessarily solve India’s financial inclusion problems but it would definitely be a start. As with telecom towers, lack of electricity is one of the reasons for non-proliferation of ATMs. Vortex, which is installing solar powered ATMs, is trying to solve that problem. A solar powered ATM would need just 100 watts of electricity, as opposed to 1,800 watts needed by the traditional ATM’s. A total of 545 Vortex ATMs are already set up with plans to set up more. A frugal innovation which could be the first step to solfing India’s banking problem.
- A branchless bank: Why go through the process of installing an ATM, even if it is a solar powered ATM? There are many versions of the branchless banking phenomenon. Most of them work like EKO India Financial Services. EKO acts as a midleman to the bank and the virtual kiosk ( a mom and pop store). Using a mobile phone and text messages a migrant worker in Delhi can give money to a mom-and-pop store in Delhi, a receipt is obtained and the same money is withdrawn by the kin in Bihar using another mobile phone from a store in Bihar. EKO earns a small commission and so do the stores involved in the transaction. State Bank of India and Bank of India are pioneering this service.
- Affordable housing: The whole housing market is being reexamined. Looking at the shortage of space in urban housing, many developers came up with really small yet useful homes. A 580 square foot homs with all amenities. The house is really stripped down to the bare essentials – One bathroom, two bedrooms, a living room and a balcony. Western media, which has a habit of counting the number of toilets in India, would be happy about these homes. Three people can sleep in an effectively designed bunker bed and the living room is split between a living room and a kitchen with a wooden partition. A minimal home which is constructed in pre-cast bricks and comes at an affordable price. Minimalists across the world would love to live in a place like this.
India is to frugality as Bethlehem is to Jesus. (NYT)
Cannot debate that. Could you?