Cartoons Thoughts

Fortune at the Bottom of the Pyramid

Setting the tone right, let me continue my discussions on junta colony and merge it with the ideas I got from “Fortune at the bottom of the Pyramid”

If any one of you has actually visited slums, you would realize that you are more likely to see TV, coolers than toilets. Since these people live in constant fear of eviction, they do not invest in improving their living conditions. Hence there is no drainage, pest control, sanitation or even paint on the house.

Government cannot provide them with ration card (PDS), drinking water, electricity or even health care cards because for all these, you need a permanent residence. And providing these cards means legitimizing their claim on the land. Net result the schemes meant for urban poor never reach the poor themselves.

Since nobody has the legal ownership, the goons have a field day. They run their clandestine operations there, they settle all the disputes and rule the area.

Slum lands cannot be used by its owner because eviction/relocation is politically impossible. The poor who have been occupying it for almost 15-20years do not own it. I always believe land/house is an asset. If you have property in your name, you can use it to raise funds and invest properly. If there was a way in which poor/rich got the ownership, they could unlock its value.

As real estate becomes more expensive apartments, high rise buildings become cheaper. But since nobody is willing to invest in construction, poor continue to live in single storied shacks. What a waste!

Solution (refer the cartoon above): 1 lakh apartments.

Make 7-10 storied apartments, each with 1open kitchen facing the window, 1 bathroom (with sanitation, running water), 150-200 sq feet of living room, a door with your own lock and key. Most important make them have clear titles, so there is never again a fear of eviction.

The building will unlock lots of slum land, so even the govt/land owner might me more than willing to give the land for free.

The ground floor can have shops whose rental could pay for the apartment upkeep.

Does it not sound feasible?

Well each metro has room for 10,000 such houses (100 cr business opportunity in each city) multiply it by the number of cities and it will be a few percentage of the country’s GDP. Builder who made it possible is actually doing good business while also serving the poor

Poor happy because they will get quality of life.

Banks: give me one bank which will not like to be part of this humongous venture.
I am sure even the poorest can raise 20k for their dream house, and borrow another 10k from relatives. So net result bank can give a 70k loan against a secured property of 100k (sounds logical)

The EMI (@8%) would be 586/- p.m. on 70k. (so it will take 17 months of default for bank to lose 10k of safety margin… I think it is worth the risk for the bank)

Since most of the slum dwellers never had a banking account. This loan will give banks new clients and will give poor access to cheep credit and attractive savings schemes.


education Thoughts

Some of the best things in life are free.

well not free exactly, but definately most economical. Look at education:
1) Pre-school education: the best education of 2-4years kids is under the supervision of the mother or relatives (free nanies). But people spend 40 thousand a year to get their schools in all the fancy playschools. I often wonder is it for the kids, or for the pride and ego of the parents. I even heard of a theory which said that parents are so much pissed of from changing diapers and constant nagging that they are more than happy to dump their kids. One thing is true these playschools always charge more fees than any decent highschool or college. Probably because 3 year old are being taught about future technologies and being imparted skills which no college graduate can even dream of!

2) School education: If you look at school with best board results, theie fees are always affordable. While the school which is the most expensive always has below average results ( and many of them do not even impart education beyond 5th class) These expensive private schools will take admission interviews of a 3year old and their parents. What is it for, what purpose does it serve? I have no idea. But I have never met a person who aced in the primary school as well as in life.(discounting people from places where there was no compitition)

3) College education. The most wonderful thing I discovered recently was that ISB school of business charges more tution fee per month than any of the ivory business school. Comparing 2.4lakh charged by IIM for a 2 year course with 17lakhs charged by ISB for a 1 year course make the whole structure ridiculous, but ISB charges more fees than Stanford, California, Berkley and MIT. Also the school is only 4-5 years old and is still establishing itself, I shouldnot comment on the quality. But probably who can pay so high fees, already have big offices and father’s businesses to run. So they already might be at the top positions.

Even in graduation, I found fees at IIT were 16thousand per semester, while most of the private engineering colleges were safely charging upto 80 thousand per semester (with much less faculty, and facilities). Then for those who could not afford even this 16thousand, there were more scholarships than applicants. So if you fell in the merit cum means criteria, you will get a full tution fee waiver and a monthly stipend. For the rest there were affordable student loans, which banks were more than happy to lend. So good schools and college always ensure that you do not pay through the nose for education, and no bright student is denied education because of economic reasons.

Inspired by this, I thought of checking US schools, before generalizing. The top 20 schools(engineering and comerce) always have many times more scholarships, research assistanceship, tution fee waivers then the rest of the schools. Also the highest fees is always getting charged by the mediocre colleges. Call it a price of mediocricity, but next time if someone cribs about the expensive education, you might be safe to assume that he is not very bright.