The Grameen Bank and Indian Microfinance

It is refreshing that this year?s Nobel Peace Prize has gone to Dr. Mohammed Younus and the Grameen Bank. With the last few Nobel Peace Prizes having gone largely to diplomats, giving the prize to an institution in an underdeveloped country which has taken development to the masses is a welcome change.

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interest rates derivatives revisited…

so my favorite topic of interest rate swaps has made front page news today (in the Business Standard). apparently the food corporation of india (FCI) entered into a swap with Barclays in which FCI received fixed and paid an interest rate linked to the yield on Indian GSecs. now it so happens that reverse repo rates have gone up by much more than Barclays had projected (thus driving up yields on GSecs), and poor FCI is now getting mothered.

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UD and the Masala Dosa

A few months back, before went on exchange, we thought of doing a survey of “delivery systems in south indian fast food (read darshini) restaurants in Bangalore”. And maybe publishing a paper on it. However, thanks to our combined laziness, it’s never happened. Nevertheless thought of writing what I’ve been observing in a few restaurants I’ve been visiting.

Upahara Darshini (UD) heralded a new paradigm in dining in Bangalore. Set up in the early 90’s, it was perhaps the first darshini in Bangalore, which till then had mostly sit-down type restaurants. During the initial few years, there was hardly any standing space there and we used to go there only to collect takeaways. Of course, I must also mention here that UD also started a new packaging funda for takeaways (using cardboard boxes) and even started charging for the packaging. And people willingly paid.

Business has always been brisk at UD. Till about a couple of years ago, they used to sell a Masala Dosa at around Rs. 10 (while it was at least 20-30% higher in other darshinis). In a survey done by the Times of India in 1998, it was found to be the restaurant with the highest daily turnover in Bangalore. It also diversified quickly, opening Roti Ghar in 98 and then the UD residency and the UD Jayanagar in the last one and a half years.

After the whole lot of dilly-dallying, let me finally come to the point I wanted to make. It is regarding the masala dosa manufacturing process at UD. In most fast food restaurants, the masala dosa is a “made to order” item. Given the fact that the dosa has to be consumed really hot for it to be tasty, and the fact that it doesn’t take too long to make, the strategy makes perfect sense.

UD, however, has totally turned the paradigm on its head and makes to stock masala dosas. The clincher here is the demand. Though UD is known more for its idlis and kadubus and the shavige bath, the masala dosa there seems so immensely popular that they can afford to make it to stock!

While waiting for my dosa the other day I noticed how the system works. There are two huge tawas at UD, one of which is dedicated for making Masala Dosa, which is the “vanilla product” while there is a used for the non-standard products such as rava dosa, set dosa, etc. And the tawa is large enough to make 24 dosas at a time (6×4). And every 5 minutes 24 dosas are churned out and quickly lapped up by hungry customers.

One process change on the customer side that the restaurant has made is the point at which the coupons are collected. Typically, in most darshinis, you hand over the coupon to the “waiter” and then wait for the dosa to be made. Here, due to the huge crowd and the continuous manufacture, the coupon is collected at the time of delivery of the dosa. Another thing is that they usually don’t accede to “special requests” such as “extra roast” or “roast only on one side” or “no red chutney” (though the last time we went my dad managed to get a dosa without the red chutney). Once again, helps in faster manufacture and delivery.

Really interesting to see such a beautiful system that these guys have evolved, all because the demand characteristics of the restaurant are so different from that of the others. Think it would be a good idea to ask an operations prof to write a case study on it.

By the way, what I described above is for the UD in Jayanagar 3rd Block. However, the same process is also followed in the UD on DVG Road (the original UD). And I must also add that the coffee at both places also rocks. At 3 bucks for the extra-large glass of strong filter coffee, it’s definitely worth more than a few visits.

PS: Some day in the next one month, I want to do a vegetarian food tour of Bangalore, and come up with a “vegetarian food tour guide to Bangalore”, similar to what Dibyo has done for not-necessarily-vegetarian food.

Water privatization

, , , two others and I initially thought we are going to fraud our project in Infrastructure Appraisal, Financing, Privatization and Regulation (IAFPR). We decided that each of us would put in 4 man hours of work where we would each come up with 4 pages of report and put it together. It just so happened that in my four hours of effort, I got a fairly decent insight which I thought I should share with you.

from what i’ve read up over the last one hour, whenever a public utility provides water supply, a large part of the population (typically the poor) gets left out. however, those who get it get it at affordable rates. the left out have to rely on unsafe alternate sources for their thing.

now, when water services get privatized, prices shoot up. typically let’s say it doubles. however, the terms of contract, if implemented (and they have been in most cases), ensures water supply to 100% of the population, including the poorest.

what is the difference in the situation here? poor who had absolutely no access earlier now have THE OPTION of buying safe water, though at a high price. and who is paying for this option? it’s the haves. people who were anyways getting water, but who now have to pay extra for it. and most of them can actually afford to pay the extra amount (like i’ve paid a couple of bills for my dad, it’s of the order of 100 bucks. so a 100% increase won’t affect me too badly).

the only losers in this deal are the poor who anyway had access to water supply. they get no extra service, but at a much higher cost. if there’s some way in which these people can be compensated, water privatization is the way to go!

of course, one thing i forgot to mention, this scheme will work only if the entire water bill is variable, without any fixed components (else people who won’t want to exercise option would get screwed)

Given another exam in the afternoon I have to now translate this argument to more formal language and put it in a report in 15 minutes. Hope to do a decent job of it.

Airport Infrastructure

Today, we had a manager from a consultancy company talk to us about the airline industry. Apart from usual stuff like low cost vs full carrier, cyclicity of the industry, scope for consolidation, etc., one important thing that was mentioned is that most Indian operators have placed huge orders for aircraft. It is expected that by 2010, the number of aircraft in India would’ve grown by a factor of 4 (not exactly sure of this number).

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Bhelpuri Economics

Every evening during my last term break, I used to go on a long walk round South Bangalore, and used to top it off by eating somewhere. Being too impatient to sit at a table and order, I would typically saunter into some fast-food places and make good all those calories burnt in the walk. Roti Ghar on most occasions; Upahara Darshini on a few other; Adigas; Cool joint; Chat house; Kakunje’s corn outlets; and a lot of street bhelpuri.

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