The Middle-class Sarvangaasana: All for Reducing Black Money!

Since all the experts have concluded that the rise of the new middle class is the force behind the rising tide against black money, The Opportunistic Times decided to ask a representative of the middle-class what the issue is all about. Our special correspondent spoke to forty-seven year old Shri Uttam Bharatputra, an engineer with a Central PSU, but now on medical leave to work for an MNC. He has to travel within and outside the country on work, although is currently a bit worried as his original employer has asked him to surrender his passport. He suspects that some jealous colleague, who is in the know of things, has complained against him. In these uncertain times, he just can’t understand why people expect him to quit his government job. Hypocrites, that’s all he can call them!

Here is what Shri Bharatputra had to say about the issue at hand, black-money:

“There should be no doubt, by now, that Indians, especially we middle-class Indians, can’t stand black money. The politicians, and these big businessmen may all be corrupt, but we middle-class, we are all for white money.

May be, the only exception is when we want to buy some property. You see, when we buy property, if I keep the entire value on paper, I’ll have to pay a higher stamp duty. Obviously, for us middle-class people, a few lakhs can be a big amount.

To be honest, this is true when we sell property too. You see, when we bought it, we kept the value on paper low to save stamp duty. Now, if we keep the right price, won’t we end up paying capital gains for the amount that we earlier did not keep on paper as well? The previous seller had also benefited from that. Why should I now pay for what he gained then? I’m sure you understand what I’m saying.

I’m not saying that we don’t pay any bribe either. I won’t lie to you. I’m an honest person, and I’ve been forced to pay some bribes here and there. For instance, I was in a hurry the other day and I got caught jumping the signal. I didn’t have the time to waste on these traffic fellows. So, I just put a hundred rupee note in his pocket. I genuinely think it was a win-win situation. Do you know how low these poor home-guards on additional traffic duty are paid? So I won’t blame him for taking the money I gave him. Anyway, I thought I could be of some help to him too. Not only have my parents taught me to be helpful to the others, I’ve also taught my children to be helpful! So, I’m only practicing what I preach.

See, these are things everyone in this country does. In any case, we are not like politicians, are we? May be, we save some money and spend that money on our families. Is that wrong? You have no idea about expenses these days. My son is just getting into high school, but for him, we had to buy a computer. Thankfully, my colleague connected me to a person who helped us in getting an assembled system and in installing software at real low cost. That gentleman, of course, has warned me against updating the software online as that could lead to the pirated software being discovered. But, that is a small price to pay considering what we saved. See, otherwise that money would have gone to some exploiting foreign company. Why should we let Indian money go to rich foreigners?

Now, my daughter is awaiting her medical entrance results. Just yesterday, I was told that if 25 lakhs were to be paid, they can straightaway arrange a seat for her. I didn’t agree because this wasn’t such a reputed medical college. It is alright if a good medical college asks for 20-25 lakhs extra, but how can a third-rate one ask? Should be owned by some politician! Anyway, I’m expecting some of the better ones to call her this week. If she gets into a good college, she can recover that additional investment later on.

I was telling you all this because, you see the kind of expenses we have these days... It is not very easy to finance your expenses. Just the other day, I had to use our family jewelry to take some agricultural loan, you know. No, no, I’m not into farming! See, we had some ancestral land, which is hardly used. Who is there to do these things now? My bank manager told me that I can use it to get some loans at very low interest. Of course, I could have pledged only the land, but then with gold as additional collateral, I could get more loans. Plus, I wouldn’t have to sit guarding my gold. These days, nothing is safe anywhere, you know! Anyway, my manager himself has taken the amount from me. He is paying me 17% interest on that amount. He has collected money from others too. He puts that in stocks and makes more money. Don’t worry! I know him for quite some time. He is an honest man, and he will pay every rupee he has promised us.

So you see the kind of things we do to take care of our families? When we are struggling like this, these politicians and businessmen are indulging in siphoning off black money! Do you know that if we get all the black money from abroad, for the next thirty years none of us in India need to work? Our politicians are drinking our blood and they are saving crores and crores of money for their families. Is that justified? They should all be shot dead.

When Baba Ramdev demanded that all this money be brought back, they started questioning how he made money. As if making money is wrong. Without making money, how can he serve the country? These stupid politicians, you know, someone should drive some sense into them. They are accusing him that he collects money without issuing any receipt or accounting for the transactions. What transactions are you talking about? Do doctors normally issue you receipt if you consult them at home? As if, civil engineers and architects in this country give you receipt for consulting them. That Kapil Sibal is a lawyer, no? Do lawyers give you receipt for consulting them? Why all this? Most landlords don’t give you a rent receipt and you have to make one yourself to submit to your office for tax purposes. Do brokers give you receipt? You and I know all this, but silly politicians don’t? I don’t believe them. This is all acting, mere drama! They just don’t want to reduce corruption. That’s all!

Anyway, no one believes them. My neighbor is a journalist. He is a very nice guy. Pretty straight forward. He was telling me of so many instances of corruption. So I really know how much money these blood-suckers are putting in Swizz-Banks. Some of these rich businessmen and politicians send him lots of gifts through their PR agents. So, he hardly had to buy anything when he built his house. But, you know, he doesn’t take any money from them. In fact, these politicians and bureaucrats don’t take any money from him either. Last time, these municipality people had sent me some notice because I had some construction which was not part of the approved plan, but he helped me and they closed that file without my having to pay a single rupee! So, it is good people like him who make our life easier in these trying times.

Our society needs people like him. Not these politicians! My father still talks about how good things were when we were ruled by our princely rulers then. Do you remember how things were during the emergency? I remember. No corruption! Not a single train was running late! Those days we had rulers who were strong. Now, all we have is weak people. And, they call it democracy! What kind of democracy is this? I was reading in the newspapers about the difference between democracy and participatory democracy. We don’t have the latter. That is the problem! Otherwise, how come this country, where an honest, hard-working middle-class is growing, still has such weak, corrupt leaders? I tell you, we need a revolution like they had in Egypt. In fact, it is coming. I’m very optimistic!”

Disclaimer: Shri Uttam Bharatputra, appearing above, is a fictitious character. Any resemblance to real persons, living or dead, is purely coincidental and unintended. The TOT editor is confident that none of the (middle-class) readers can identify with any of the acts of commission or omission mentioned above, because such things don't happen in our country. However, if the above post does trouble any reader's conscience, possibly because s/he is a foreign citizen or a poor person, then The Opportunistic Times willingly and unconditionally expresses regret for the same.

Want Good Mallu Food in Hyderagood? Try Utupura!

For all ye who love cuisine from God's own country, good tiding to ye! Rejoice, for your prayers have been answered. For ye, in a quiet corner of Banjara Hills in Hyderagood, has been given a place to fill your stomachs to your hearts' content, without much effect on your wallet balances. Sherry, the current holder of the most eligible bachelor title in town, was the blessed one who told us that Utupura was worth the try, and guess what, he is - as almost always - cent per cent right!

P.S. No, Utupura isn't (yet) our PR client! 

Is my degree valid? by Team Careers360

Careers360 is a wonderful  magazine on careers and education. It is a new initiative from Pathfinder Publishing Pvt Ltd, owned by Maheshwer Peri, the President and Publisher of the Outlook group. The first two issues have been simply brilliant, and I am looking forward to the June issue. Each issue is currently priced at Rs. 40/-, but I've found them worth every paise. The above image is that of page 71, May 2009 issue of Careers360.

Disclaimer: The copyright is with the publisher, and so it may not be copied or circulated. If there was an online edition, only the link would have been posted here.It is posted here only with the intention of drawing attention to this new welcome initiative.  If the publisher raises any objection to this being posted here, it will be removed immediately.

Be Wise in Choosing an Educational Institution...

- A Concerned Citizen

For more than a month and a half now, Icfai institutes in Hyderabad, Bangalore, Jaipur and other places have been in the news for all the wrong reasons. In fact, on Thursday, many students turned violent and ransacked the Icfai Institute of Science and Technology (IcfaiTech) at Bangalore after learning of its legal status. Today, these students face criminal cases against them and their future is in jeopardy. Students need to be extra careful before joining any institution, especially for pursuing a course leading to their first degree. They should not merely go by advertisements and promotional campaigns. They need to check the legal status of the institution that they are planning to join.

 

A student should ask four crucial questions before joining an institution of higher learning. These are regarding the status of affiliation and the legal status of the institution awarding the degree, the status of approval by the concerned statutory professional council, the status of accreditation, and the acceptance of the degree by other universities in India and abroad.

 

Is the Institution awarding the degree, either a valid University or Deemed to be University? If yes, is it operating within its authorized jurisdiction?

In India, valid degrees can be awarded only by a University set up either by an Act of the Parliament, in which case, the University is popularly known as a ‘Central University’ or by an Act of a state legislature, in which case, it will be known as a ‘State University’. Central and state universities come under section 2(f) of the UGC Act. There is also a provision for Central Government to grant 'Deemed to be University' status on institutions of higher learning on the recommendation of the UGC. Such institutes become known as "Deemed Universities" and come under section 3 of the UGC Act. They can also award degrees to their own students, provided their courses have been recognized by the UGC. However, deemed universities cannot affiliate other colleges and institutions.

 

While Central Universities can have an all-India jurisdiction, subject to the provisions of the Act of the Parliament under which it came to existence, state universities cannot have jurisdiction outside the geographical boundaries of the state. In fact, for several state universities, the jurisdiction might be limited to a few districts within the state. Deemed Universities are unitary universities, which cannot affiliate other institutions. However, as per the 2003 UGC private universities regulations, after five years of their existence, private universities, including deemed universities, under exceptional circumstances, and with the permission of the respective state governments and UGC, can have off-campus centres outside their main campus. BITS Pilani, which now has a legally valid campus each inHyderabad and Goa, is the best example for this.  

 

Keep this in mind! No university is ordinarily allowed to have campuses or study-centres outside its jurisdiction. So always check which university is going to award the degree after the completion of the course. If the university does not have jurisdiction over the geographical area where the institute one is joining is located, then any degree awarded by the university on successful completion of an undergraduate/post graduate program in such an institution would be legally questionable. The only exception to this rule is when it is a legally authorized off-campus centre of an established deemed university like BITS Pilani, in which case the institution is a constituent of that deemed university, and not an affiliate. If your institution claims to be an off-campus centre, and hence, a constituent of a valid university elsewhere, first check if the university in question is more than five years old and whether the campus you are planning to study has been officially notified by the university as an off-campus centre after taking prior permission of the UGC and the concerned state government.

 

In case, the course you are pursuing is a distance learning course or a flexible learning program as some institutions would call it, irrespective of where you are attending contact classes and writing exams, the course has validity only if its approved by the  Distance Education Council (DEC) and the UGC. In all cases, it is advisable that one check with the UGC if the University under question is in the list maintained by it under section 2(f) of the UGC Act.

 

Does the course/ programme have the approval of the relevant professional council ? In India, we have various statutory professional councils which have regulatory powers in their respective domains of education. For instance, the DEC that was mentioned above is the concerned professional council when it comes to distance education or Open University system. When it comes to technical education (courses in the field of engineering, computer applications, Management, Pharmacy, Architecture, Hotel Management, etc), the statutory authority is the All India Council for Technical Education (AICTE). AICTE is the standards maintaining authority and so all institutions of technical education have to maintain the minimum standards prescribed by AICTE. While universities and their constituents legally do not need to take AICTE's prior approval for running technical programmes, even they are expected to maintain the minimum standards prescribed by AICTE, failing which UGC can take action against them. It is mandatory for most deemed universities, colleges and other institutes to take AICTE's permission before running technical courses. Even a seat cannot be increased without AICTE's permission. Exceptions are there: IIMs, IITs etc do not need to take AICTE's permission as they are run directly by the Ministry of Human Resource Development (MHRD) and hence are sister institutions of AICTE. IIT, IIM degrees are, therefore, automatically AICTE approved. Also, long established deemed universities like BITS Pilani, (BITS Pilani became a deemed university in 1964) legally needn't take AICTE’s permission to run technical courses because they were established and were running popular technical courses long before AICTE Act of 1987 was passed.

 

Analogous to the role performed by AICTE in technical education, is the role performed by Medical Council of India (MCI) in medical education; Indian Council for Agricultural Research (ICAR) in agricultural education and research; National Council for Teacher Education (NCTE) in teacher education (B.Ed, M.Ed etc);Dentists Council of India, Pharmacy Council of India, Indian Nursing Council and Bar Council of India in the fields of dental education, pharmacy education (up to graduate level), nursing education and legal education respectively; 

 

Does the institution have valid accreditation? If it is an institution approved by the UGC and if its credentials are good, the institution is likely to go for National Assessment and Accreditation Council (NAAC) accreditation. NAAC accreditation, therefore, is an indication that the institution has send out at least two batches of students already and that it has nothing to hide. In addition, if the NAAC has awarded a high grade (A, A+ etc) then that is official recognition of the quality of education that such an institute provides. For instance, the University of Hyderabad has been awarded the highest possible rating given by NAAC. If it is a technical institution approved by the AICTE, then the accrediting body is the National Board of Accreditation (NBA). NBA after its examinations merely gives an 'accredited' or 'not-accredited' status to institutions. NBA accreditation is again an official recognition that the institution meets or exceeds the stipulated minimum standards for technical education prescribed by AICTE.

 

Is the institution awarding the degree a member of the Association of Indian Universities? It is not a legal requirement that all universities and deemed universities in India should be members of the Association of Indian Universities (AIU). However, all traditional universities and deemed universities in India are members of the AIU. Several universities, when considering students for higher education, insist that their previous degree should be from a university, which is a member of the AIU. Even some of the reputed non-Indian South Asian universities are associate members of the AIU. Since AIU is authorized by the member universities to determine the equivalence of various degrees across different universities in India, it is always good (from a mobility perspective) to earn your degrees from universities/deemed universities which are members of AIU.

 

It is important that students know the regulatory environment in the field of higher education in India. Knowing the legal requirements and taking reasonable care in these matters can help the youth of this country avoid losing money and precious years to well marketed, money-oriented educational business empires. It is certainly better to be careful than to be sorry!

TOT Editor's note: It is a timely message. The Opportunistic Times would like to place on record our thanks to the concerned citizen who wrote this and has shared it for publication. Also, please note that the usual disclaimers apply. The author has taken reasonable care while collecting and presenting the information contained above. This is posted here for information purposes alone, in the spirit of a public service message. Any erroneous reporting of factual details, if pointed out with evidence of the correctness of the claim, will be rectified with due acknowledgment within reasonable time. Needless to say, any act of accessing and reading information here does not create any relationship, including a solicitor-client relationship, and the author and the publisher takes no responsibility of actions taken on the basis of information provided in this blog.

Equip to Educate, Excel and Exceed!

World Development Reports, in the past, have often indicated that the biggest problem of poverty is the inability to take well-considered decisions due to lack of knowledge. Lack of effective primary and secondary school education leaves the citizenry ill-equipped to know their reality and take appropriate decisions that affect themselves and others. This makes a world of difference in the way people do their business, conduct their personal and professional lives. Correction of this scenario can open up new possibilities for growth and development of the country.

Bill Gates, in his recent annual letter to the Bill and Melinda Gates Foundation, writes about Warren Buffett calling every American – those who have been born in the United States – lucky winners of the "ovarian lottery". Lucky, because of the education that American children receive and the system that rewards innovation and risk-taking. Even while Gates admits that within the United States too, “there is a big gap between people who get the chance to make the most of their talents and those who don't", he emphatically makes it clear that good schooling is the critical factor. On a personal note, he has gone on to write about the difference schooling has made in Melinda's and his lives.

Recently, a study conducted by PurpleLeap, an organisation specialising in entry level talent management, found that only about seven per cent of the students passing out of engineering colleges across India were employable; the rest were found wanting in either technical skills or soft-skills or both, and clearly lacked problem solving skills. A number of commentators were quick to place the blame for this situation at the doorsteps of our private engineering colleges. While our engineering colleges certainly have their share of blame, we need to look at the quality of the students going into these institutions. Years before, a test conducted in Nicaragua had showed that seven out of ten engineers from that country then could not calculate the volume of a cube with sides of one metre if the formula was not given at hand. Obviously, it was the state of schooling in that country that was more at fault than the state of their technical education.

Look at the other side of the story: Bill Gates went to Harvard, but dropped out. So did Paul Allen, the co-founder of Microsoft, who had gone to Washington State University. Michael Dell had joined the University of Texas at Austin to be a physician before dropping out. Steve Jobs dropped out of Reed College after just a semester. Colleges did not make any of them, but schooling ensured the right foundations. Ask any one of them and they will talk about their early education.

 What all these tell us is essentially that if we don't get the schooling of our children right, it is more likely that our children won't get the chance to make most of their talents. Of course, for those who have already gone through these stages, and are striving to be employed, organisations like PurpleLeap can be of tremendous help. They help you acquire employable skills and help nation-building by transforming un-utilisable social investment in human resources to utilisable human capital. But, can they fully compensate for lack of good schooling? Unfortunately not!

One of the key lessons that the Bill and Melinda Gates foundation has learned is about the importance of good teachers. Among the Schools which have received funding from the foundation, the ones that have shown remarkable progress are the ones which helped their teachers be more effective in the classroom. To quote Gates, again: "It is amazing how big a difference a great teacher makes versus an ineffective one. Research shows that there is only half as much variation in student achievement between schools as there is among classrooms in the same school. If you want your child to get the best education possible, it is actually more important to get him assigned to a great teacher than to a great school." As a matter of fact, he adds that whenever he talk to teachers, "it is clear that they want to be great, but they need better tools so they can measure their progress and keep improving".

That is true not just in the United States, but world over. Our teachers, who themselves have gone through the old system, if they have to improve, have to be equipped with better tools.

James Tooley, an expert of international repute on private low-cost education, has often said that in developing countries, it is not the state that has the greatest potential to help the poor, but the private sector. Living up to that prediction are several innovations in the education sector initiated by private entrepreneurs in India. The NIIT story is Tooley’s favourite example.

Of course, as Tooley would point out, no programme or tool can compensate for lack of accountability in the system. Often, our schools fail our children because our teachers are answerable only to the government servants. In one set of schools, often state funded and run, even when parents vote with their feet, exit them and move their children to private schools, no one really bothers. Whereas in schools where teachers are accountable to the Manager – who can discontinue their services -- and through the manager to the parents – who can shift their children to competing schools – the system fails our children much less. Guess, which set of schools are signing up to implement innovative teacher training and curriculum development programmes?

Many schools where Gates Foundation invested money in did not improve students' achievement in any significant way. And incidentally, these tended to be schools which stayed inflexible in their approach, did not take such steps as allowing the principal (manager) to pick the team of teachers or change the curriculum. And the schools which showed outstanding achievements? Almost all of these schools were schools with limited public funding and hence, greater flexibility. According to Bill Gates, one of the key things these schools have done is help their teachers be more effective in the classroom. Surprising? Perhaps not! Choice and accountability are always interrelated.

The public policy lessons from these experiences are pretty clear. And quality education for all classes of people would transform this country and take it to the next level. Would the next generation of Indians consider themselves as winners of the 'ovarian lottery'? That depends on this generation of Indians, our political and business class, our parents and teachers, and our civil society. That depends on how far we are willing to go to equip our schools and empower our parents to educate our youth to exceed and excel beyond what the world has set as targets for them!

Brand Investment and the Art of Public Relations!

A brand as an asset entails investment of resources. As a private property, it can result in scarcity rent to the owner. It is this return on investment that prompts private capital to spend on brand building, advertising and Public Relations (PR).

Scarcity is an issue only because of utility. Sellers, whether of goods or services, are able to sell more when buyers are aware of the sellers and have confidence in them. Brand is one of the primary means by which sellers make themselves known as trustable entities. Since credibility and reliability are the keywords here, asset creation here is basically about investing in building a reputation and protecting it. Investments in brand building are foregone and non-recoverable if sellers renege on delivering. No wonder, buyers generally believe that a branded product is more reliable than one which is not. In fact, to extend the argument further, a ‘bigger’ brand is more likely to be trusted than a ‘smaller’ brand, since higher the perceived sunk costs in brand development, higher the incentive for the seller to ensure that the product does not disappoint the buyer!

(As an aside, I would like to point out that perceived high sunk costs needn’t be real. If you need advice on brand building and management that maximizes your return on investment, you can get in touch with professional brand consultants like AimHigh Consulting.)

So branding gets the seller to tap into a growing loyal customer base. But, what does the buyer get?

The economic cost of buying something is not just the price one pays for the product. Among other things, it also includes the cost of finding what exactly one wants and ensuring that the product is worth the money it costs. Search costs also include the opportunity cost of time spent looking for such information. This significant size of the costs associated with information causes buyers to seek sub-optimal information regarding products and can result in inefficiency. However, brands minimize search costs because, although they don’t say much about the product sold, they communicate relevant information about the sellers to the buyers.

Since resources are limited and have alternate uses, minimizing search costs improves efficiency and effectively puts more resources in the hands of the buyers. This additional purchasing power with the buyers can be tapped either by charging a brand premium on price or by selling more. Thus, a strong brand can earn you a return beyond the scarcity rent, due to the additional consumer surplus it generates!

If search costs can be minimized across the economy, it certainly will be growth inducing. But what about the costs of brand building? Will there be a decline in producer surplus, along side the increase in consumer surplus? Even if there will be, as long as the increase in consumer surplus is more than the decrease in producer surplus, overall welfare should improve.

Yet, for an individual seller who is not sure of tapping the entire additional consumer surplus generated by branding, the cost of branding should be a very serious concern. Of course, it is also important to remember that a producer can normally have a greater control and influence on his surplus than that of the consumer. Therefore, to the extent that consumer surplus can be positively improved, and the cost of branding can be controlled, brand building and management should offer tremendous possibilities in the market place.

While the cost of brand building was always an issue, it wasn’t always as much of an issue as it is now. The reason for this is the emergence of information intermediaries, especially third party retail web-sites and multi-brand stores, which provide easy price comparisons between products. The availability of information in a single place, say, on Amazon website or in a posh mall round the corner, about the existence and reliability of various brands can influence customers to try out lesser brands, especially if there is a ready price advantage. This essentially means that the ability of sellers to charge a brand premium is coming down.

There are even scholarly works today which argue that reduction in search costs due to availability of cheaper comparable information has reduced the significance of brands. To the extent this is true it highlights the need to manage branding costs better. However, none of them say that branding has become irrelevant. Other things remaining the same, buyers, even on Amazon website, pay a premium for branded articles. Increased availability of information has just ensured that the markets have become more competitive.

In the light of this emerging scenario, any brand building exercise will have to look beyond mere advertizing. Splashing millions of rupees only on advertizing without considering complementarities surely does not maximize the return on investment.

In this context, Public Relations (PR) is one area where most companies under-spend.

A PR exercise involves identifying the target audience, which needs to be communicated to. Audiences are broadly of two types: Active and Passive. Active audiences are already aware of the product and are interested in it. Passive audiences need to be persuaded by appealing to their self-interest. To begin with, a PR professional is, therefore, an audience expert.

PR professionals also have more direct access to the media and have much better media literacy than the average Joe. Therefore, they are able to judge how best to use the media to convey what the seller wants. They are basically communication generalists who know that the communication process is selective and that people consume media products for a reason. PR significantly contributes to ‘framing’ or the shaping of views through selective choice of facts, themes, imagery and words used in the media, which determines how a product, a person, or a development is discussed. The pattern of media coverage of a particular topic helps to determine what the public perceives as important. This agenda setting is done by the media, but again PR professionals have a huge influence on it.

Before a product can be sold to a passive audience, awareness and interest need to be generated. PR professionals motivate the audience to become aware and generate interest using various tactics that improve the design, style and delivery of message. They simplify the message and relate it to what the audience already knows. Given their expertise, they structure the message for optimal processing, ensure timely repetition and create an environment where the message is most likely to be heard. By persuading the passive audience, by shifting customer loyalties in your favor, and by increasing the size of the active audience, PR effectively complements advertizing and sales efforts.

Ideally, a holistic communication strategy, spanning advertisement to PR to corporate communication, needs to be in place for any organization trying to maximize its value. Starting from brand positioning to strategic communication management, brand building exercise needs to be a carefully thought out process if the exercise is to be relevant for the changing times. However, not only the planning part, but also the execution of such an exercise is too crucial to be left to non-specialists within the organization. That is where even corporates which understand the importance of brand communication sometimes make a mistake. The fact is that, even cost-wise, specialist firms are able to ensure better value for money due to their expertise as well as due to lower average costs arising from economies of scale.

A brand is a unique asset with high potential returns. Build it carefully, for it doesn’t give you much of a second chance!

The Signal is Green!

World Environment Day 2008 is here! Oil prices are going through the roof and that could be terrible news for you as a consumer. But, for an environmentally concerned citizen, it could perhaps be good news as well, especially since more and more cleaner energy alternatives may now become economically viable.

But, as another summer season gets over, what needs to worry you more as a producer or a consumer is something else! It is becoming increasingly clear that power shortage in India is not likely to disappear any soon. While the demand for electricity has kept on growing, the capacity expansion has fallen short of targets both in the Ninth and Tenth plans by about half. According to the government, India will miss the target of adding 78,577MW of power generation capacity by 2012 and the best case scenario will see only an addition of around 35,000MW.

The expected loss in Industrial Production during April-July 2008 only due to power shortages is 35%, according to ASSOCHAM. The all-India deficit in power supply in terms of peak availability and of total energy availability during 2007-08 was 14.8 per cent and 8.4 per cent, respectively, implying that the GDP was less by around 3,50,000 crores only due to power shortage. Given the related job loss and lost income opportunities, one can clearly identify the shortfall in power generation as an important constraint that prevents faster poverty reduction and our meeting the Millennium Development Goals (MDGs).

While initiatives for addition to capacity to meet the growing demand for power need to be accelerated, considerations of sustainable development and the need for efficient resource usage make it imperative also to focus on demand-side management. The Energy Conservation Act, 2001, empowers the Government to take concerted steps to improve energy efficiency and conservation in the Indian economy. Among other things, the Act provides for notifying energy intensive industries, establishments and commercial buildings as ‘designated consumers’ and to prescribe energy consumption standards for them. The Act also provides for Energy Conservation Building Codes (ECBC) for efficient use of energy and its conservation in commercial buildings.

In this context, the setting up of the CII Green Business Centre at Hyderabad in 2000 was a major pioneering step in India. CII-GBC formed the Indian Green Building Council (IGBC) to promote the concept of Green Buildings in India. Of course, the concept of green building is not just about improving energy efficiency. It is also about improving the efficiency of use of material and water resources as well. It is ultimately an attempt to reduce the environmental impacts of both the construction and use of buildings, which also reduces the cost of operations and improves public health, by reducing conflict with nature.

The Leadership in Energy and Environmental Design (LEED-INDIA) Green Building Rating System promoted by the IGBC is slowly catching the attention of corporate clients. IGBC’s vision is to usher in a green building revolution in the country and to facilitate the emergence of India as one of the world leaders in green buildings by 2010.

One company which has taken the vision of a green building revolution to non-corporate customers is Biodiversity Conservation (India) Limited (BCIL). BCIL has built nearly two million square feet of residential homes in gated communities, offering green solutions to individuals and families without compromising on urban comfort and convenience. BCIL eco-homes use half the energy of regular residences of comparable size. Given that energy costs can only rise in the years ahead, the potential savings for the consumer is clear and tangible.

Naturally, the business is growing, and how! Whether in Madison Square or down town Bangalore, the best advertisement for any product is in the form of a proud customer. Word of mouth publicity has accelerated the demand for this customer driven business and BCIL has grown to an 80 crore company in a decade or so. Of course, awards and recognitions for BCIL and its Managing Director, Mr Chandrashekar Hariharan, from national and international bodies like TERI and ADB have also helped.

World Business Council for Sustainable Development (WBCSD) says that buildings are responsible for at least 40% of energy use in most countries. With construction booming, especially in countries such as China and India, these figures are only likely to rise. The report of the companies involved in WBSCD’s Energy Efficiency in Buildings (EEB) project calls on governments to provide better urban planning, more effective building codes to enforce minimum required technical standards, and information and communication framework to overcome the lack of know-how. Additionally, policy improvements including tax and market incentives could encourage the use of energy efficient building equipment and materials and occupant consumption.

Of course, buying efficient equipment or building green homes is only one aspect of consumer behavior related to energy. The other significant aspect is using energy efficiently. In most Western countries, despite the price premium for energy-efficient equipment, during the 1990s most consumers switched over to more energy-efficient appliances. This eventually made the consumers wealthier. Yet, when the monetary savings from efficient use of energy is spent on more gadgets and equipment, this may not lead to much of a reduction in overall energy demand.

The growth of green business houses in India needn’t surprise us. Globally, green business has already become big business. The reasons are plenty: For one, it is now widely accepted that environmental problems, especially the ones related to energy, are not going to get any better. Then, of course, the consumers are increasingly aware and want economic costs and environmental risks to be minimized. The technology factor cannot be ignored either. Clean technology has emerged to meet the demand for greener products without compromising on quality or value for money. And all these mean that there is money, and fame, to be made for companies like BCIL that go the green way.