Can India afford its villages?

An editorial in livemint puts forth the thesis that the answer to rural India’s problems does not lie in the development of the villages, but rather in the development of the villagers. And they claim, paradoxically, that the best way to do that is to convert them into city dwellers.

There has been a general tendency to romanticize village life as a return to our roots. What is noticeable, though, is that most people who romanticize village life in India tend to live in cities—in India, or elsewhere. They also seem incapable of noticing the irony implicit in this romanticization, since their forefathers, too, were once villagers —who migrated to cities for good reason.

The main problem they see with development of villages is that a typical village is too small to allow efficient delivery of (at least some important) goods and services. Like electricity.

The economics of power generation and distribution do not allow decentralization to the level of villages that are home to a few hundred people. The average cost of per unit of power makes it prohibitive. The only way for a small 1-2MW decentralized plant to provide power for a village of 1,000 people is for the villagers to pay substantial premiums—which is highly improbable.

However, an earlier post on the Indian Economy blog suggests an alternative way to fix this without giving up on the villages:

Given that rural populations are very poor, it is reasonable to expect that the aggregate demand of a single village for any single service will be very low. However, the aggregate demand for, say, a 100 villages for a single service could be significant. Aggregating the demand for many different kinds of services of the same 100 villages would translate into lot of services. These services would require infrastructural inputs which can be commercially and sustainably supplied. Thus, a RISC would supply to the needs of about 100 surrounding villages.

Considering that Atanu Dey is a co-author of both the above posts, I am not sure why the livemint editorial does not have any reference to the RISC idea.

In any case, it is very common for people to subscribe to the “village life is great” philosophy without really putting too much thought into it. And these two articles should go some way in ensuring that you understand the issues a little bit more.

The overheads of outsourcing

Munjal Shah, CEO of riya.com/like.com blogs about having to close their Bangalore office. The overheads of having multiple sites geographically separated (especially for a small start-up) are just not worth the (fast reducing) cost savings. for:

Bangalore wages have just been growing like crazy. To give you an example, there is an employee of ours who took the first 5 years of his career to get from 1% to 10% of his equivalent US counterpart. He then jumped from 10% to 20% of his US counterpart in the next 1 year. During his time with us (less than 2 years) he jumped to 55% of the US wage. In the next few months we would have had to move him to 75% just to “keep him at market.”

Keep in mind that Riya are at the leading edge of this trend. We tend to only hire folks from IIT or other top schools. We tend to only hire the smartest folks from these schools. We only hire in Bangalore (just too hard to have three offices). We tend to only hire folks with a lot of experience. These are all characteristics that are critical for technology startups, but not necessarily for a big company like IBM or a services company like Infosys who can afford to train new graduates. I do believe that other startups in Bangalore will see the same issue in 12-24 months.

See full article.
I found it here.

Sheep sold as poodles

My friends often think that I make up some of the stories I tell them. You can’t make these things up. I don’t have that much imagination. For example, see this:

Thousands of Japanese people have apparently been scammed into buying “poodles” that are actually sheep with fancy haircuts. The scam was uncovered after actress Maiko Kawakami showed a photo of her pet poodle on TV and commented that it “didn’t bark and refused to eat dog food,”

Pictures are here. One of the commenters there asks whether this is what is meant by a sheepdog.

Source: boing-boing.

Update: Hmmm… Taste of my own medicine. Normally, people forward me all kinds of internet crap, and I have to tell them it is a hoax. Now I got the same thing done to me. In the comments below, MJ points out that this is a hoax. Snopes (one of my favorite sites on the internet) has officially debunked the story. Serves me right for being too credulous.