To study this aspect, CGAP and DFID had released a paper in 2009 called “Banking the Poor via G2P Payments”. In this paper, several things were acknowledged formally – electronic transfer of funds would cost the government much lesser as compared with traditional methods of aid/grant dissemination. Secondly, electronic transfer also made things convenient for recipients as they would now no longer required being at a particular place at a particular to so as to lay claim to their grant money physically, nor will they have to suffer any intermediaries. Moreover, the paper recognized the bank account (that the recipient would own, so as to lay claim to his grant money) was very often seen as the portal into the wider world of formal financial services, such as savings, insurance, and credit and this would further the achievement of financial inclusion developmental goals for the government.

Studies further revealed that the poor generally tried to save out of their grant money – since they usually did not have formal bank accounts, they saved informally. Some earlier studies even went so far as to show that once recipients had a formal bank account, they would use it as the vehicle for their savings.

However, some key questions were left unanswered due to the lack of evidence. For example – would it be profitable for governments to push for integration of inclusive financial services into social cash transfer programmes? Or that once the recipients were given a host of the financial instruments banks thought would be popular amongst them considering their needs, would they actually adopt these? Or, will commercial financial service providers find involvement in this profitable?

Hypotheses were quoted, and only now may they be verified, using CGAP’s new study called “Social Cash Transfers and Financial Inclusion: Evidence from Four Countries”, which analyses data from Brazil, Colombia, Mexico and South Africa – all large, middle-income countries with relatively well-developed financial infrastructure in urban areas.

Read the report here.

PV installed capacity may rise by as much as 600 GW by 2020
The study estimates that installed solar photovoltaic (PV) capacity may increase by 400 to 600 GW by 2020 from current levels of about 65 GW. This would imply as 50-fold increase in PV installations compared to 2005 levels, thus rivalling gas, wind and hydro installation rates. Such growth, primarily in distributed generation, is based on the anticipation that continuation of decline in PV prices, despite financial support drying up, will lead to doubling of manufacturing capacity by 2015-16 and a 10% annual drop in underlying costs till 2020.

Distributed generation set for rapid ramp-up with downstream players reaping maximum benefits
Downstream players, according to the study, will reap maximum benefits particularly after 2015 when rapid ramp up is projected to occur in distributed generation. Opportunities for upstream players to differentiate themselves will dry up as manufacturing is expected to become more standardised. However, to remain competitive and survive, both upstream and downstream companies will have to achieve rapid cost reductions and also deliver distinctive products and services. For generating differentiation, upstream companies will need to push for developing proprietary technologies while downstream players will need to focus on catering to the needs of high-value customers in a particular customer segment.

Demand to be driven by five consumer segments
Demand in five customer segments, the study predicts, will drive PV growth over the next two decades. The first four segments are expected to rapidly grow by 2020 while the fifth segment will expand significantly between 2020 and 2030. These segments along with their triggers and barriers to growth and their estimated size are tabulated in the exhibit below:

Margins set to expand even though PV price decline continues
In addition to the five segments, the study expects diverse entrepreneurial opportunities to arise for new players and investors aiming to tap the different markets and customer segments with customised business models. Downstream companies focusing of specific consumer segments may emerge and become regional or even global niche leaders. For example, a global solar developer could help big retailers such as Wal-Mart and Staples to deploy solar and energy-efficiency approaches in their stores. Emergence of these new lines of demand, according to the study, will lead to healthier margins for solar companies by 2015 despite continuation of PV price decline as solar becomes attractive for more and more customers. Read more here…

That was the status of food requirement for consumers in the world. Let us now focus on the producers and how agriculture is equally important to them. In many developing countries, agriculture accounts for approximately three-fourths and half of employment in Sub-Saharan Africa and India respectively. Seventy-five percent of the world’s poor live in rural areas and for whom economic returns from agriculture form some part of their livelihoods. For very poor households, agricultural development is not only a defence against hunger; it is also possibly the only available option to potentially increase income as much as four times; it can raise incomes nearly four times more effectively than growth in any other sector. Perhaps that makes optimal and strategic investment in innovation systems and innovation the tools to overcoming global poverty.

However, investments made for the sake of making investment wouldn’t work. Let us now look at what countries stand to gain from innovation in these sectors. Agriculture sustains the economies of most countries in significant ways: Agriculture contributes to one-third of GDP for sub-Saharan Africa countries, and 17% of Indian GDP. These statistics serve as reasonable proxies for other parts of the developing world as well.

Innovation is widely recognized as a major source of improved productivity, competitiveness, and economic growth throughout advanced and emerging economies. If farmers, agribusinesses, and even nations are to cope, compete, and thrive in the midst of changes of this magnitude, they must innovate continuously. In light of that, this report highlights the past examples of innovation and innovation systems (there is a difference between the two – read it here) and brings forth for consideration the practice of Agricultural Innovation Systems (AIS). This overview of the WB report is not so much about the importance of Agricultural Innovation Systems in the world today, as it stresses on how specific approaches and practices can foster innovation in a range of contexts – or how innovation systems can be best applied to bring about increasingly progressive and more productive changes across the three verticals – economic productivity of a country, poverty alleviation and food security.

Read the overview here.

The FSP Team (Financial Services for the Poor) in the Bill and Melinda Gates Foundation has identified the use of digital devices as the way to break the circle of poverty for the world’s poorest. The facts state that mobile phone usage in Africa grew from 25 million in 2001 to nearly 650 million in 2011, and it is expected to reach 925 million by 2015. Furthermore, by 2012, the number of unbanked people who possess mobile phones is expected to increase to 1.7 billion worldwide. Mobile Payment Networks (take the example of the famous Kenyan M-PESA) have evolved to form a strong foothold in East Africa and South Asia and are strategically placed to further their services of digital payment services to large numbers of poor households in just a few years.

FSP has also recognized the suitability of digital payment services to almost exclusively cater to the needs of the underserved: disaggregation of transactions to enable the delivery of services that are right sized for the cash flow needs of poor households, record of transactions to help product makers, enabling the poor to control expenses and more.

Keeping these factors in mind, FSP has now come around to recognizing its strategic financial inclusion goals as following:

1. Expanding access to financial services by enhancing the reach of digital payment services in poor and rural areas
2. Expanding the range of financial services that poor people can access over these platforms
3. Supporting research and product design experiments to better understand which product design features, price incentives, and marketing messages work best to encourage poor people to adopt and actively use financial services over these platforms

The Foundation plans to work on several levels – narrowing the digital divide in rural areas of the poorest of economies, researching to enhance the kind of financial services for the poor, form global partnerships so as to look for innovative ways to maximize impacts through products, services and policies, and finally, working on digital and technological innovations.

Read the report here.

India’s power distribution sector is characterised by huge losses
Despite abysmally low per capita power consumption, India experiences up to 80% electricity shortfall in certain regions at peak consumption periods. It has been widely acknowledged that a heavily loss making and unsustainable distribution sector is at the core of such a sorry state of things. Mr. Partha Bhattacharyya, Senior VP, BCCI, cited that the combined distribution loss faced by the country currently exceeds INR 1 trillion (USD20 billion). For the Indian power industry to experience sustainable growth, the distribution sector has to therefore, be first made financially sustainable.

Losses stem from failure of the Electricity Act to ensure sustainability
So where do the problems plaguing the distribution sector stem from? According to Mr. M.K. De, Principal Secretary, Department of Power and Non-Conventional Energy Sources, Government of West Bengal, although the Electricity Act, 2003, provided a broad framework, it fuelled certain contradictions which in effect led to its failure in addressing the issue of sustainability of the distribution sector.

Distribution companies would be profitable without the burden of cross subsidy
Firstly, the Act had originally proclaimed that the then necessary evil of cross subsidy in the tariff structure would be progressively reduced and eventually removed. However, it was later amended to state that cross subsidy will only be reduced, remaining silent on when and by how much such reduction would occur. The result: cross subsidy has become the single most important reason for the mammoth distribution losses the country faces today. Distribution companies (DISCOMS) historically have been aggregators of power, getting low cost power through long term contracts and hence having every chance of being profitable, without the burden of cross subsidies.

Factors restricting competition have had a crippling effect
Secondly, lack of effective mechanisms fostering competition also has had a crippling effect on the distribution sector. Competition is restricted by high capex requirement for installing metering infrastructure, rampant power theft and ambiguity over who will bear these losses and most importantly, government influence. The fundamental objective of corporatisation post the Electricity Act, as a reform, was to arms-length the government from commercial business. Some ascribe the distribution sector’s woes to the failure in achieving this objective. As mentioned earlier, continuation of cross subsidy, an external regulatory (government) influence, has indeed been the biggest barrier to competition. Furthermore, the practicality of the clauses in the Act mandating competition is questionable. For example, if any entity has to compete in the sub-1MW category, it has to develop a parallel distribution network, which is an extremely costly and unviable proposition in itself, let alone additional challenges like land acquisition for such parallel networks.

SERCs have only themselves to blame for their failures
Finally, failure and inefficiency of State Electricity Regulatory Commissions (SERCs) has been an oft-cited reason for the plight of the distribution sector. SERCs are appointed through an elaborate process and once appointed, they are practically impossible to remove, thus enjoying a high degree of protection. According to M.K.De, if an SERC fails in bringing in efficiencies in the distribution sector despite such protection, then they have no one else to blame but themselves. The question that arises as a result therefore, is whether such unfettered protection has given the SERCs a sense of invincibility which in turn, has made them indifferent to the needs of the distribution sector.

Effective corporate governance is crucial for arresting the losses
In conclusion, it appears that state control over DISCOMS will continue in the short to medium term, where regulators will only be able to introduce surrogate competition. In the longer term, if cross subsidy is scrapped, true competition will be given a fair chance. Irrespective of whether the distribution sector remains under public or private control however, there is a strong need for effective corporate governance for uplifting the fate of the distribution sector. There have been some positive developments in this regard in the recent years. With the rising coal prices and its huge impact on input costs, SERCs had soon found the resulting losses impossible to absorb. Public sector banks collectively started funding the losses resulting in their related potential non-performing assets (NPAs) rising to INR1.5 trillion (USD30 billion), cited Mr. M.K.De. This alarming situation led the Planning Commission to intervene and stop such lending by the banks. This is ushering in reforms by forcing SERCs, so far criticised for their laxity, to take corrective actions like debt restructuring of DISCOMS and improve on the corporate governance front.

The study termed “Does BoP business approach fit in the Japanese framework? : Japanese private businesses searching for new markets while contributing to the reduction of poverty”, stresses that time is ripe for Japanese companies to strengthen partnerships with the public sector to implement innovative business models tailor made for BOP needs, engaging this population as consumers, employees and producers. The study highlights the role of the METI, JICA and JITRO in fostering such strong win-win public-private partnerships and that of the ODA in serving as a catalyst for attracting and mobilizing funds for their implementation. The study also cites success stories of Japanese companies in building sustainable BOP business models and provides a compilation of BOP business promotion projects announced by JICA in 2010 and JETRO’s pilot demonstration projects for development and import schemes till 2010.

Since the launch of Jawaharlal Nehru National Solar Mission (JNNSM), India’s solar policy has undergone dramatic changes. In early 2010, the policy initially envisioned a levelised FiT of INR17.91 ($0.36) per kWh for Solar Photovoltaic (SPV) projects. An overwhelming response from project developers based on anticipated rapid decline in solar PV prices prompted the government to replace the Central Electricity Regulatory Commission (CERC) determined FiT with a reverse bidding mechanism.

The reverse bidding mechanism entailed inviting bids from interested solar project developers. The lowest bidders would be selected for projects totalling the predetermined capacity for the two batches of Phase 1 of the JNNSM. The winning FiTs (bids) would apply to the solar project PPAs for 25 years, subject to the original CERC determined FiT serving as the ceiling.

Reverse bidding has triggered a 58% decline in FiT in less than two years
The rationale behind the reverse bidding mechanism was making the FiT market based and since the market (prices) for SPV was heading southward, it was anticipated that the FiT would follow suit. The SPV FiT has declined by 58% over less than two years since implementation of the mechanism.

Under Batch 1 (November 2010), the lowest winning bid for SPV projects was INR10.95 ($0.22) per kWh, implying a 40% discount to the original CERC FiT. More recently in December 2011, under Batch 2 the lowest winning bid reached a further low of INR7.49 ($0.15) per kWh by Solairedirect, the second largest French solar company. At these levels, solar power is now much lower than the cost of diesel generated power which is about INR12.5 ($0.25) per kWh. Given the trend and on the assumption that all the projects selected under JNNSM are successful, solar energy is expected to achieve grid parity much earlier than 2022 as originally anticipated under the JNNSM.

Source: EAI, PV Magazine

Developers expect decline in global solar prices to continue
What is noteworthy is that apart from Solairedirect, many other winning developers bid below the INR10 ($0.20) level. The deep discounts offered by developers closely correlate with a rapid decline in global solar PV module prices. The lowest winning bid declined a shade over 31% over the past one year to $0.15 per kWh while retail prices for solar PV module also fell by 30% to $2.43 per Wp during the same period.

Source: Solarbuzz

A section of experts and industry observers have criticised the reverse bidding mechanism questioning the viability of the projects at such low tariffs resulting from the mechanism. That is however, a topic for another day.

In India, the concentration of children suffering from malnutrition is in states like West Bengal, Uttar Pradesh, Bihar, Jharkhand, Madhya Pradesh, Rajasthan and Orissa. In West Bengal particularly, 19% of children are wasted, 38% underweight and 42% suffering from malnutrition. Also, according to the prevalent trend, mothers in West Bengal were largely young adolescent girls forced to marry early. They were found to be generally uneducated (36%), already married (49%) and almost always anaemic (59%).

What is being done to address these issues, made starker by the alarming numbers? The Government of West Bengal, in association with UNICEF, Save the Children ® and Child in Need Institute (CINI) rolled out the program “The 1000 Days Approach to Malnutrition in West Bengal: The Window of opportunity” to address the afflicted mothers and children in West Bengal.

The concept of 1000 Days: A window of Opportunity, if it were to be implemented, would prove to be an efficient tool in reducing the national child and mother mortality rates in India. (“The 1,000 days between a woman’s pregnancy and her child’s 2nd birthday offer a unique window of opportunity to shape healthier and more prosperous futures. The right nutrition during this 1,000 day window can have a profound impact on a child’s ability to grow, learn, and rise out of poverty. It can also shape a society’s long-term health, stability and prosperity”. Read more here). But with how history has run its course in terms of aid-programs in India so far, this could just as well be another program that was funded, piloted and never heard of again, making no mark on its targeted goal of change. How would this be any different?

Dr Sujata Basu, Senior Programme Office at CINI answered our question. According to her, the same stakeholders would be involved – ASHA Workers, Health workers at the grassroot level, and ANM workers, the same forms of governmental and non-governmental schemes and aids will be employed – with the simple exception that accountability creation will be given the utmost priority. Accountability has been recognised as a key missing ingredient to success of such programs, as recognised by Dr. T Kumar (IAS, Principle Secretary, Dept. of Women and Child Development, GoWB). As she put it – all the tools and finances are in the possession to of the state administration, only the lack of accountability creates the gap in services having the impact they were created for. Dr. Dilip Ghosh (IAS), Health and Family Welfare Department, GoWB suggested toward this end, the use of experiences of similar programs piloted before like Positive Deviation and CHCMI (Community healthcare Management Initiative) to learn to avoid creating fallacies in this new program.

Accountability creation would be implemented through formation of community groups where discussions between urban local body representatives, PRIs (Panchayati Raj Institutions and community members, especially mothers will be conducted. Demand for services that have long been in existence but have not made it into practise with or knowledge of the women at grassroot levels can only be generated once they have been made aware of it – and such community groups will directly facilitate it. Once awareness has been generated and demand has been made, accountability creation will take importance. This will be done through data tracking of the status of malnourished children over regular intervals of time, as well as facilitating the involvement of change makers in community gatherings to share their stories and best practices. SHGs in these communities will be trained to track and monitor progress and funding from UNICEF and Save the Children® shall be used to scale capacity and train more workers.

With such strategic methods to ensure the smooth working of machinery to achieve mother and child health for a better future of India, one cannot but hope that the inference of accountability as a factor to be addressed will finally bring about change.