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ROLE OF INDUSTRIAL CORRIDORS IN INDUSTRIALIZATION AND ECONOMIC BOOST IN INDIA: A CASE OF DELHI-MUMBAI INDUSTRIAL CORRIDOR View project
All content following this page was uploaded by Shailesh Kumar Jha on 19 May 2015.
This case study has been prepared as coursework for SML 702 (Management of Innovation and R&D)
course. The case study draws upon knowledge resources available in the public domain as secondary
sources. We are immensely grateful to all agencies for providing sharing such resources in the public
domain. Also, tried to leverage all the information and experience of working in water and environment
sector.
MANISH RAJPAL
SYED HABEEB AHMED
SHAILESH KUMAR JHA
VIBHOR PACHNANDA
ASHISH MALVIYA
SUNEET ANAND
Introduction
The Water Crisis: India's immense and developing populace is putting an extreme strain on the
majority of the nation's characteristic assets. Most water sources are tainted by sewage and
farming spill over. India has made advance in the supply of safe water to its kin, however
horrible divergence in scope exists the nation over. Despite the fact that entrance to drinking
water has enhanced, the World Bank appraises that 21% of transferrable illnesses in India are
identified with risky water. In India, looseness of the bowels alone causes more than 1,600
passing every day the same as though eight 200-man enormous planes collided with the ground
every day. Cleanliness rehearses additionally keep on being an issue in India. Restroom use is
amazingly poor in provincial ranges of the nation; just 14% of the rustic populace has entry to a
lavatory. Hand washing is additionally low, expanding the spread of sickness. So as to lessening
the measure of illness spread through drinking-water, lavatory use and cleanliness must be
enhanced all the while. (Please see Exhibit 1)
Drinking water in rural India has far reaching and multiple consequences with direct and indirect
impact on different parts of individuals' lives. Out of 850 million individuals that need access to
safe drinking water, 150 million are in India alone. (Please see Exhibit 2)
Water, since a long time ago thought to be a neighbourhood characteristic asset that were to be
overseen by individuals mainly has experienced a changed ideal model wherein it must be
"provided" to. Along these lines, not just the traditional sources been degraded, expanding
demographic changes, both in country and urban areas have increased demand for water in
general and safe drinking water specifically. Increased demand brings with it unreasonable
reliance on ground water, wellsprings of which have disintegrated because of changes
principally in two ways: anthroponic and geogenic1
Sameer Kalwani understands this well- “75% of disease in India is caused by water borne
contaminants sources of massive, centralised, industrialised water treatment plants that are
basically having to ship water across the entire country to over half a million villages”. There
are numbers of different treatment technologies available in India which is catering community
at small and household levels. (Please see Exhibit 3)
Keywords: Water for all, Sarvajal, Affordable water, safe Drinking water, bottom of pyramid
‘Sarvajal’, although in the business of giving safe drinking water is not among these top five.
The filtered water industry in India saw a boom in the late 1990s and soon after Bisleri launched
1
(i) anthropogenic - those caused by manmade activities like, industries, urban sewage and waste landfills, mining etc. (ii)
geogenic - those occurring due to natural causes mainly through rock-water interaction.
its bundled drinking water in the nation. This critical development was fuelled by a surge in
promoting by the business players that "bottled water was pure and healthy".
Today, with a rise in health awareness, low quality of piped water, and the simplicity of
accessibility of bottled water, the per capita consumption of bottled water in India is on the
increment. Changes in rural and rurban demographics together with modifications in natural
resource management have brought concentrate on safe drinking water in the peri-urban and
rural pockets.
For as long as eighteen months, Saurabh Jindal, a marble and tile dealer in Sangaria town of
northern Rajasthan, has been purchasing 30 liters of drinking water consistently for his home,
and an equivalent sum for his shop. What amount of does he pay for those 60 liters? INR 30. It
would cost even less, simply INR 18, or INR 0.33 every liter, in the event that he didn't get the
water conveyed to his doorstep. "I don't mind paying this small amount for clean water," he
says. "It is far less than what it would cost me if someone in the family fell ill from drinking tap
or well water."2 Such concerns are justifiable. Excessive fluoride content in groundwater
increased frequency of kidney failure, dental issues and extreme joint pain. A study led in Alwar
district found that the fluoride content in groundwater in Alwar, Rajasthan was somewhere
around 2 ppm and 7 ppm, way past WHO admissible breaking point of 1 ppm. 60-80% of
regions in Gujarat, Rajasthan, Punjab, Andhra Pradesh and different states are influenced by
Fluoride contamination.
Injuring impacts of fluoride and arsenic lethality because of non-accessibility of safe water for
drinking and cultivating has turned into a noteworthy well-being issue, essentially because of
openness in rural markets.
As indicated by the consequences of a Service Level Benchmarking (SLB) Program did by the
Ministry of Urban Development (MoUD) in 2006 in 28 urban communities, the normal term of
supply was 3.3 hours every day, with an extent from one hour at regular intervals to 18 hours
every day.
In Delhi inhabitants get water just a couple of hours every day due to insufficient administration
of the conveyance framework. This outcomes in defiled water and power’s family units to
supplement an insufficient open water administration at restrictive "adapting" expenses; the poor
experience the ill effects of this circumstance. For instance, as indicated by a 1996 study family
units in Delhi spent a normal of INR 2,182 (US$ 34.30) every year in time and cash to adapt to
2
Source: http://businesstoday.intoday.in/story/innovation-drinking-water-supply-sarvajal-
waterlife/1/186622.html
poor administration levels. This is more than two times as much as the 2001 water bill of about
US$ 18 every year of a Delhi family unit that uses 20 cubic meters every month. (Please see
Exhibit 5)
Profoundly unified choice making and supports at the state level, which are normal for the
Indian common administration, influence the administration of water supply and sanitation
administrations. Case in point, as indicated by the World Bank in the condition of Punjab the
procedure of endorsing plans is incorporated with even minor specialized regards arriving at the
workplace of chief engineers. A dominant part of choices are made in a tremendously
concentrated way at the headquarters. In 1993 the Indian constitution and significant state
enactments were changed keeping in mind the end goal to decentralize certain obligations,
including water supply and sanitation, to districts. Since the task of obligations to districts is a
state obligation, distinctive states have taken after diverse methodologies. As indicated by a
Planning Commission report of 2003 there is a pattern to decentralize capital venture to
designing divisions at the region level and operation and upkeep to area and gram panchayat
levels.
3
High-tech initiative that provides cheap drinking water through ATM-like kiosks in a resettlement colony
Founded by Sameer Kalvani in 2008, Sarvajal is a mass market solution provider for clean
drinking water. The organization empowers access to clean water, enrolling neighbourhood
ambitious people to offer it and screen water quality remotely. “Customers are happy to pay to
get clean water at their doorstep. What started with one village three years ago now provides
safe water to 70,000 people every day4”.
Normally, Institutions face test of catering drinking water needs of vast number of labourers and
now and again, considerably bigger number of guests. As a rule they decide on rather expensive
and raw water wasteful purpose of-utilization cleansing framework with no reliable maintenance
support. On the other hand, at numerous spots, organization depends on buying significantly
more expensive bundled drinking water. In sharp complexity to these, Sarvajal gives single
machine answers for such multi-storied, high activity areas at viably one-tenth of the expense.
More than 8.8 Billion liters of clean drinking water served, 100,000 served day by day in more
than 6 expresses, 400+ occupations that empower safe water hones in neighbourhood groups.
The organization relies on upon an establishment model, working with business visionaries to
whom it gives preparing, filtration gear, and different assets. This manifestation of money
related building accumulates considerably more capital for R&D and for operations than any of
the ambitious people could have obtained themselves. To date about 150 franchisees have sold
more than 200 million liters of clean drinking water all through six states.
Sarvajal applies a proficient asset dispersion answer for location an unsatisfied need, sparing
both governments and people cash (purchasing through its water ATMs is less lavish than
sanitizing water at home) and killing the waste that outcomes from individual filtration or huge
scale appropriation through funnels. The organization has moved from a the present state of
affairs quadrant 1 way to an innovative, monetarily built quadrant 4 answer for supplying
country and urban off-the-framework water.
Award: Fast Company named Sarvajal one of the World's main 10 most creative organizations
in India for 2013.
Innovation 5
Products:
1. Water Treatment Plant: extremely low cost equipment assembled by Sarvajal.
2. Soochak: a patented two-way monitoring device for each water system that gives real-
time information on water production and enables to anticipate maintenance
4
Source: survey of bottled and RO based firms
5
This section is adapted from http://www.sevea-asso.org/wa_files/Case_20study_20Sarvajal_vcomp.pdf
3. SEMs: Customized in house ERP that manages water enterprises from source to
consumption.
4. Suvidha: a pre-payment mechanism for franchisees.
5. Solar Water ATM: a solar-powered, stand-alone, cloud-connected RFID-based and cash-
less water vending machine
To attain to scale in the business operations, SarvaJal expected to present another plan of action
with Water ATM's. The prior model gave 'Proof of Concept'. (Please refer Exhibit 6)
Later, sustainability turned into a key concern. In the prior model, each new machine implied
that there would be a capital lockdown for the organization, other than extra liabilities in the
event of default by a franchisee. Sarvajal had no exact information on costumers, so a benefit
offering model was a non-starter. With erratic power supply, franchisees felt vigorously
compelled in business operations.
The way that establishments did not possess the water treatment plant had a flip side: the
machines were not legitimately worked and dealt with. The administrators of the machine were
habitually changed, not effectively prepared, were changed consistently and the machines were
not used to their full-limit, as a rule not as much as a large portion of their outline limit.
In the new plan of action, Sarvajal has a superior information of the client, (prepaid card for the
costumers), ATM's are solar powered fuelled which empowers franchisees to run their machines
the whole day. The franchisees are substantially more "incentivized" now that they need to pay
for the capital expense and as a result, SarvaJal's has the capacity extend its achieve and its effect
is much bigger than some time recently. (Please refer Exhibit 7)
Franchisees purchase a permit, pay a month to month expense to Sarvajal for its
administrations (upkeep, quality checking and showcasing help charge), work the stand and
offer water to villagers in 20 L containers with a discretionary6 conveyance administration
for additional expenses.
Franchisees have a "reserve zone" of 3 km radius, to guarantee a minimum number of
customers to support the plant.
6
Franchisee used to provide water in 20 litres of containers only, there was no option of less than 20 litres or in
multiple of 1 litre as per customer’s demand
Revenue Model
Old Business Model:
Franchisee works the machine and offers water in 20L cluster for INR 6, keeps 100% incomes
for first month, then gives back 40% of water deals to Sarvajal (franchisees keeps 100% of
conveyance charges).
For a franchisee, break-even point is arrived at by 30-45 months, considering the franchisee is
serving 150 families every day and normal utilization of 20L/every capita/ day.
It is a gainful business for the Sarvajal as well. The aggregate expense of setting up the RO plant
with the machine is around INR 5 lakh. Franchisees pay 40 per cent of their income to the
organization. On the off chance that the franchisees own the machine, they pay 20 every penny
of the profit to the organization. A unit earns back the original investment when it serves 125
families with 20 liters every day by day. The organization gives support, publicizing backing and
group drive.
Leveraging IPR
One of the inventors of Sarvajal, Mr Sharma said “IP can help deliver low cost services”.
Sarvajal is utilizing the validity connected with IP for persuading people groups, clients,
establishments and budgetary organization and ingraining trust in them in manifestation of long
haul reasonability of this innovation and utilizing it for shaping systems also.
The Piramal endeavours need to utilize patent insurance for being fiscally manageable by
sending expense initiative methodology and utilizing their development for utilizing first
mover's playing point and stalling contender's section utilizing IPR. The patent documented will
serve as game changer and key differentiators for Sarvajal to empower market entrance and also
mastery unless an alternate troublesome development happens and changes the paradigm
(Creative Destruction). (Please refer Exhibit 8)
Future Directions
Urban, Not Just Rural: Sarvajal is situating itself as a mass water supplier, confined to country
as well as urban where it is required. Sarvajal is planning to set up 1000 water "ATMs" in the
slums of Delhi and Mumbai. The ATMs are solar based controlled and can hold upto 500 liters
at full capacity.
Customers, the vast majority of whom are slum inhabitants can get to the ATM with the
assistance of an ATM card. The customer applies for an ATM card. This helps SarvaJal catch
critical demographic information. Likewise, the chip in the ATM card will capture data about
utilization attributes of the ATM. Sarvajal looks to introduce water ATM's in slum clusters
(approx. nearly 20 ATM's will make one cluster). The establishments of the ATMs relies on
upon two viewpoints:
I. Availability of a water source – area identified for bore well by the government, etc.
II. Permissions from the local authority for land, installation, sale of water, etc.
Data Aggregation: The user characteristics captured can be aggregated with customised goods
and services for the user group.
Significant Challenges
Social Issues: One major town in Rajasthan has a few smaller towns, called Dhani, based on
nature of community. In the event that water ATM was introduced in one Dhani, individuals of
different Dhanis would protest. The advanced model of water ATM dealt with this issue. To
evade conflicts, the new model is deliberately put with the goal that it can be gotten to by
individuals of all groups. The machine itself is less complex with only one button.
With renewed government focus on furnishing provincial families with access to piped water
supply in sufficient amount with a metered tap connection providing safe drinking water, as the
year progressed, that meets predominant national drinking water measures, interest for sourced
water will eventually diminish. (Please refer Exhibit 9)
By 2022, every rural individual in the nation will have access to 70 lpcd within their household
premises or at a level or vertical separation of not more than 50 meters from their houses without
obstructions of social or monetary discrimination. Individual States can embrace higher amount
standards, for example, 100 lpcd if required (Strategic Plan for Rural Drinking Water in India – 2011-
2022; Department of Drinking Water and Sanitation- Rural Drinking water, GoI)
It is important that share of Indians to access to enhanced source of water has increased
altogether from 72% in 1990 to 88% in 2008.
Environmental Aspects: Sarvajal claims to recharge the wastewater produced during the
treatment process. "Groundwater here has high TDS content. Handling leaves 50 per cent water
with TDS content," says Singh. This water is sent back to the aquifers through recharge pits.
Shockingly, the area authority and different authorities in the groundwater office remain
unaware of water ATMs. With no legislature activity to handle the issue of defiled water, such
an entrepreneurial venture is a major hit. (Please refer Exhibit 10)
In the current model the franchisee need to oversee near to 5000 liters of salt water consistently.
Also, in the wake of a reasonable procedure towards water source advancement, the
development depends solely on underground water resources. Sarvajal operates in probably the
most water focused on districts of the nation. Rajasthan, a state where Sarvajal was established
and right now has the greatest operations, 80% of wells are critically overdrawn.
Source: http://www.valuenotes.biz/wp-content/uploads/2014/11/Growth-of-premium-natural-mineral-water-in-
India-In-bn.bmp
Source: http://www.valuenotes.biz/wp-content/uploads/2014/11/Growth-of-premium-natural-mineral-water-in-
India-In-bn.bmp
Exhibit 5: Cost of Drinking water across the globe (cost per 1.5 litres)
Country USD INR EUR Country USD INR EUR
Afghanistan 0.49 30.5 0.36 Lithuania 0.77 48.43 0.58
Albania 0.67 41.8 0.5 Luxembourg 1.07 66.88 0.8
Algeria 0.34 21.31 0.25 Macao 1.16 72.85 0.87
Argentina 1.28 80.6 0.96 Macedonia 0.55 34.42 0.41
Armenia 0.62 38.61 0.46 Malaysia 0.63 39.41 0.47
Australia 2.84 178.24 2.13 Malta 0.73 45.98 0.55
Austria 0.67 41.8 0.5 Mauritius 0.8 50.43 0.6
Azerbaijan 0.79 49.4 0.59 Mexico 0.92 57.42 0.69
Bahrain 1.33 83.19 1 Moldova 0.61 38.22 0.46
Bangladesh 0.32 20.19 0.24 Monaco 1.05 66.05 0.79
Belarus 0.7 43.92 0.53 Mongolia 0.51 32.23 0.39
Belgium 1.27 79.42 0.95 Montenegro 0.67 41.8 0.5
Bolivia 1.08 67.69 0.81 Myanmar 0.53 33.36 0.4
Bosnia & Herzegovina 0.68 42.67 0.51 Namibia 1.27 79.62 0.95
Botswana 1.17 73.52 0.88 Nepal 0.35 21.91 0.26
Brazil 0.88 55.02 0.66 Netherlands 1.33 83.6 1
Brunei 1.61 100.8 1.21 New Zealand 2.51 157.36 1.88
Bulgaria 0.55 34.21 0.41 Nicaragua 1 62.74 0.75
Cambodia 0.55 34.51 0.41 Nigeria 0.93 58.62 0.7
Canada 1.92 120.19 1.44 Norway 3.32 208.24 2.49
Chile 1.36 85.14 1.02 Oman 0.51 31.98 0.38
China 0.66 41.2 0.49 Pakistan 0.42 26.3 0.31
Colombia 1.3 81.61 0.98 Palestinian Territory 0.85 53.09 0.64
Costa Rica 1.9 119.22 1.43 Panama 1.15 72.16 0.86
Croatia 1.05 65.8 0.79 Papua New Guinea 1.83 114.8 1.37
Cyprus 1.28 80.26 0.96 Peru 1 62.7 0.75
Czech Republic 0.66 41.63 0.5 Philippines 0.69 43.56 0.52
Denmark 1.43 89.65 1.07 Poland 0.64 40.21 0.48
Dominican Republic 0.91 57 0.68 Portugal 0.67 41.8 0.5
Ecuador 1 62.74 0.75 Puerto Rico 1.97 123.61 1.48
Egypt 0.44 27.34 0.33 Qatar 0.55 34.47 0.41
El Salvador 0.8 50.2 0.6 Romania 0.75 47.2 0.56
Estonia 1.07 66.88 0.8 Russia 0.93 58.08 0.69
Ethiopia 0.65 40.91 0.49 Saudi Arabia 0.53 33.46 0.4
Finland 2.6 163.03 1.95 Serbia 0.54 33.97 0.41
France 1.07 66.88 0.8 Singapore 1.2 75.6 0.9
Georgia 0.6 37.65 0.45 Slovakia 0.8 50.16 0.6
Germany 0.67 41.8 0.5 Slovenia 0.8 50.16 0.6
Ghana 1 62.74 0.75 South Africa 1.17 73.44 0.88
Greece 1.33 83.6 1 South Korea 1.15 72.32 0.86
Guatemala 1.01 63.62 0.76 Spain 0.67 41.8 0.5
Guernsey 2.32 145.85 1.74 Sri Lanka 0.56 34.88 0.42
Honduras 1 62.74 0.75 Sudan 0.5 31.37 0.38
Hong Kong 1.81 113.32 1.36 Sweden 2.29 143.88 1.72
Hungary 0.45 28.29 0.34 Switzerland 1.08 67.97 0.81
Iceland 2.47 154.91 1.85 Syria 0.4 25.1 0.3
India 0.32 20 0.24 Taiwan 1.02 63.91 0.76
Indonesia 0.39 24.77 0.3 Tanzania 0.94 58.83 0.7
Iran 0.41 25.54 0.31 Thailand 0.48 30.03 0.36
Iraq 0.75 47.06 0.56 Tunisia 0.36 22.75 0.27
Ireland 1.69 106.18 1.27 Turkey 0.49 30.93 0.37
Israel 1.13 70.79 0.85 Uganda 1 62.57 0.75
Italy 0.53 33.44 0.4 Ukraine 0.73 46.02 0.55
Jamaica 1.44 90.06 1.08 United Arab Emirates 0.54 34.16 0.41
Japan 1.33 83.75 1 United Kingdom 1.6 100.58 1.2
Jordan 0.58 36.57 0.44 United States 1.75 109.8 1.31
Kazakhstan 0.78 48.97 0.59 Uruguay 1.35 84.44 1.01
Kenya 1 62.7 0.75 Uzbekistan 0.53 33.54 0.4
Kuwait 0.53 33.14 0.4 Venezuela 2.39 149.75 1.79
Latvia 0.85 53.54 0.64 Vietnam 0.5 31.36 0.38
Lebanon 0.8 50.2 0.6 Zimbabwe 2.75 172.55 2.06
Source: http://image.slidesharecdn.com/scaling-up-141031171153-conversion-gate01/95/business-innovations-for-
scalingup-water-and-sanitation-services-in-lowincome-countries-19-638.jpg?cb=1414793596
Exhibit 7: Business Model innovation at Sarvajal – Affordable, Accessible and Pure Water
Source: http://image.slidesharecdn.com/hsg-india-lecture-full-131108165908-phpapp02/95/business-model-innovation-for-water-services-23-
638.jpg?cb=1383951682
Exhibit 8: Schematic illustration of the working of the water distribution system as disclosed in Patents.
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df
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