Targetting lowest common denominator

Reaching out to the bottom of the pyramid is everyone’s responsibility. The responsibility hinges upon the users who innovate and make better products for themselves, the private sector and the corporates, the NGOs and self-help groups and of course with the democratically elected governments.

In many cases it the people who organised themselves into groups the most famous of them being; AMUL the milk cooperative from Gujarat and the Lijjat Papad, an association of women who came together to make their lives better. Let us see more examples of reaching out to the common denominator.

Government of India schemes on social welfare: Any elected government has a responsibility to look after the comfort, safety and the happiness of its entire population, including the people at the bottom of the pyramid. The government’s schemes include:

Pradhan Mantri Jan-Dhan Yojana

It is a savings bank account scheme that aims to see that every Indian has a savings bank account. A savings account for all will ensure access to financial services, namely; banking/savings, remittance, credit, insurance and pension. Beneficiaries of government schemes will get direct benefit transfer in the savings account. It has features like accidental insurance cover of Rs.1,00,000 and life insurance cover of Rs 30,000. The account needs no minimum balance and after satisfactory operation of six months an overdraft of Rs 5,000 is available to the lady of the house.

Schemes under Jan Suraksha Yojana:

Pradhan Mantri Suraksha Bima Yojana (accident insurance):

The accident insurance scheme will offer a renewable one year life cover of Rs 200,000 for accidental death or permanent total disability to all savings bank account holders in the age group of 18 to 70 years, for a premium of only Rs 12 per annum.

Pradhan Mantri Jeevan Jyoti Yojana :

The life insurance scheme will offer a renewable one year life cover of Rs 200,000 to all savings bank account holders in the age group of 18 to 50 years, covering death due to any reason, for a premium of only Rs 330 per annum per subscriber.

Atal Pension Yojana (pension):

The scheme focuses on the unorganized sector and provides subscribers a fixed minimum pension of Rs 1,000 , Rs 2,000 , Rs 3,000 , Rs 4,000 or Rs 5,000 per month starting at the age of 60 years, depending on the contribution option exercised on entering at an age between 18 and 40 years.

The Atal pension Yojana will benefit the unorganised sector workers, who constitute 88 per cent of the total labour force of 47.29 crore, as per the 66th Round of NSSO Survey of 2011-12.

Amma canteens in Tamil Nadu:

Amma Unavagam (meaning "Mother Restaurant" in Tamil) is a food subsidy program run by the government of Tamil Nadu. Under the scheme, municipal corporations of the state run canteens serving subsidised food at low prices. The canteens serve idly, sambar rice, curd rice, pongal, lemon rice and chapatti. The dishes are offered at low prices - Rs1 for an idly, Rs 5 for a plate of sambar rice and Rs 3 for a plate of curd rice, etc.

Obviously, the canteens make losses and are not financially viable but the social benefits that can accrue from schemes like this are enormous. The loss made should be considered as a subsidy or the government could get funding from NGOs. It could also try corporate funding through co-branding and sponsorships.

Nano car for the masses

Tata Nano is manufactured by Tata Motors. Made and sold in India, the Nano was initially launched with a price tag of Rs 100,000, which increased with time. It was designed to lure India's burgeoning middle classes away from two-wheelers. It is the worlds cheapest mass produced car.

Affordable housing for every-one

An own home is everyone’s dream. There is a huge gap between demand and supply of low-cost homes. By the end of 2012, it was estimated that there will be a housing shortage in Indian cities of 26.53 million units, more than three-fourths of which are in the low-income households namely the economically weaker section (households earning up to Rs 5,000 a month) and in the low-income group (households earning Rs 5,000-7,500 a month).

Several developers such as Tata Housing, Mahindra Lifespaces, Patel Realty and VBHC are active in this segment. Smart Value Homes, a subsidiary of Tata Housing, is developing low-cost houses in Boisar, Maharashtra, valued at Rs 4-10 lakh. It plans to expand across the country in the next two-three years. VBHC has several projects where the starting price is Rs 8 lakh.

Narayana Hrudayalaya (later renamed Narayana Health or NH)

Hitherto those seeking affordability in health care had to be content with government hospitals, while quality seekers could spend lavishly in private hospitals. Affordability and quality health care did not go hand-in-hand. NH managed to change this misconception by bringing down the cost of surgery, at the same time delivering world class health care.

NH's average cost of a bypass surgery is Rs 90,000 compared to Rs 86,40,000 in the US, Rs 16,20,000 in Mexico and Rs 8,88,000 in Colombia. Infact, NH's cost of cardiac surgery is significantly lower than what it was in India 13 years ago.

The lower cost has not come at the expense of quality. NH's mortality rate (1.27 per cent) and infection rate (1 per cent) for a coronary artery bypass graft procedure is as good as that of US hospitals.

At the same time NH's revenues grew to Rs 827.35 crore in 2012-13, and it has a healthy profit margin of 13 per cent (Rs 97.79 crore).

Kalam Raju (K-R) stent:

The burden on national economy due to cardiac disease is enormous. More than 90 per cent of the consumables used in cardiac procedures are imported. One of the reasons for the very low number of cardiac procedures carried out in India is the poor affordability arising from the high cost of imported consumables.

Kalam Raju Stent developed by Bharat Ratna Dr. APJ Abdul Kalam and Padmasree Dr. B. Soma Raju (K-R stent) costs Rs. 5,000 to Rs. 7,000 and it led to the crash of prices of imported coronary stents in Indian market by more than 50 per cent. The imported stents cost at least ten times more.

Shantha biotech’s “Sanofi”

The World Health Organisation had recommended that every child be vaccinated for Hepatitis B and large multinational pharmaceutical companies held monopolies on the Hepatitis B vaccine. At a price as high as Rs 1380 a dose, most Indians families could not afford vaccination. Shantha Biotechnics, a Hyderabad based biotech company, developed a novel process for manufacturing Hepatitis B vaccine to reduce prices to less than Rs 60 a dose. Further expansion enabled low-cost mass vaccination globally through organisations such as UNICEF.

Affordable Refrigerators

In a country like India with over 1.21 billion people, only 20 per cent have access to a cooling device as against 92 per cent in United States and 78 per cent in China.

Mittikool:

Made of clay, this natural refrigerator named ‘Mittikool’ is the brain child of Gujarat based potter Mansukhbhai Raghavbhai Prajapati. The eco-friendly refrigerator can keep fruits, vegetables, and milk fresh just like any conventional fridge. It also provides cool water. It is a low cost fridge that runs completely without electricity.

Mittikool is made of four or five types of mud from the villages of Wankenar in Rajkot district of Gujarat. It takes about eight to ten days to make one Mittikool. The cost it takes to produce this natural refrigerator is between Rs 2,500 to Rs 3,500 and it retails at around Rs 5,500 for a 40 litre model.

The low cost Mittikool costs Rs 5,500 while a regular fridge Vox (50 litres) costs Rs 6,500. The cost difference is only Rs 1000. The entrepreneur and the government need to rethink. The entrepreneur has to think of methods of cheaper production like economies of scale. The government can give subsidy for Mittikool fridge buyers as they save electricity for the country. A subsidy of Rs 1500 per Mittikool could bring its price down to an affordable Rs 4,000.

Chotukool from Godrej:

Chotukool has a storage capacity of 43 litres, enough for a four-member family.It weighs 8.9 kilos.‘Chotukool’ operates between 50C to 150C and provides enough chill to store milk, vegetables and leftovers for a day or two. It has high end insulation which keeps food cool for 2-3 hours even during power cuts. It can run on car batteries or on an invertor. ‘Chotukool’ costs Rs. 3790.

By:Dr M Anil Ramesh