Narendra Modi's Clean India campaign breeds business opportunities
The campaign is India's biggest drive for sanitation and availability of potable water. These sectors are now set to be the catalyst to the next wave of entrepreneurship.
Swachh Bharat Abhiyan (Clean India Campaign) – Narendra Modi’s dream to make India a clean nation by 2019 – has in hindsight created new thriving business opportunities. Launched on a war footing, the campaign is India’s biggest drive for sanitation and availability of potable water – the two sectors that always remained at the back stage. These sectors are now set to be the catalyst to the next wave of entrepreneurship.
In India, among many reasons for numerous diseases and malnutrition in children is the practice of defecation in the open by people. The country, disgracefully, is responsible for the world’s 60 per cent of open defecation. Moreover, around 11.3 crore households in India have no access to toilets, and around 10 per cent schools have no toilets for girls.
When it comes to the supply of potable water, only around 27 per cent of the population belonging at the bottom section (0-20 quintile) in rural areas had supply of drinking water in 2012, says a report by National Sample Survey Office (NSSO). This calls for the use of innovative technology in sanitation and portable water segments to solve these pressing issues.
Although UPA-II revamped “Total Sanitation Campaign” (1999-2012) as Nirmal Bharat Abhiyan in 2012 in its endeavour towards total sanitation by 2022, the Modi government further restructured it into Swachh Bharat Abhiyan.
“Both water and sanitation spaces offer viable and highly scalable business models with limited amount of capital required. The business models can also attract mainstream capital,” says Anurag Agrawal, CEO, Intellecap, an investment firm investing in social enterprises.
Out of the total money allocated for the campaign, Rs 1,34,000 crore has been earmarked by the government for building 11.11 crore toilets in rural India over the next five years. The rest Rs 62,009 crore has been allocated towards eradicating open defecation and manual scavenging, managing solid waste in urban areas, etc. Moreover, the maintenance of toilets and their regular cleaning is another opportunity area.
“While the construction of toilets may involve some capital, support services, technology, etc, maintenance task can be easily taken up. The biggest reason for the failure of previous sanitation programmes was the functionality issue. Similar to housekeeping industry, if an entrepreneur gets the contract for a cluster of, for example 20 toilets, at district or state level, it can be a big business,” says Vaidyanathan Krishnamurthy, Head, Innovation and Implementation, Samhita, a social sector consulting firm.
The Ministry of Drinking Water and Sanitation will implement the programme in rural areas; while the Ministry of Urban Development is responsible for urban areas.
For Rajeev Kher, Founder and CEO of Pune-based 3s India, an end-to-end solution provider in manufacturing bio-toilets, installing, cleaning and further recycling sewage water, Swachh Bharat Abhiyan is the best thing that could happen to the sanitation space. “This will change India’s impression of being a dirty country,” says Kher. The company offers portable toilets at special events, social and religious gatherings, un-served settlements, labour camps, construction and infrastructure sites, etc.
Apart from building toilets, the government will spend Rs 7,366 crore towards solid waste management in urban areas. India currently produces around 70 million tonne waste annually due to increasing population and overburdened municipal infrastructure. The mix-up of these factors opens up large business opportunity. 300 Feet Eco Solutions, working in waste management segment, focuses on reducing street litter. The company was set-up in December 2012 realising that there were no litter bins in Bangalore.
“In India, people don’t have the mentality to wait and walk up to the litter bins to throw the trash, so we started setting up litter bins at every 300-ft.(an average distance a person walks in a minute),” says Aditya Seshnath, Founder and CEO, 300 Feet Eco Solutions. The company raised Rs 5 lakh from a local MLA in Bangalore to set-up 300 more litter bins and is now looking to raise more funds through crowd-funding and put 500 litter bins across Bangalore in next two years covering 60 per cent of the commercial areas of Bangalore.
The Water Opportunity
The previous government had made efforts to improve the availability of potable water, particularly in rural areas. It had even made provisions under Bharat Nirman (government programme to build rural infrastructure).
According to National Sample Survey 69th Round (NSS69), in December 2013, 88.5 per cent of rural households and 95.3 per cent of urban households have improved source of drinking water. Pune-based Jaldoot strives to solve this problem by delivering potable water at homes. The company uses women-driven three-wheeler rickshaw fitted with a water filtration unit that purifies water from surface source like lake or rivers using ultrafiltration membrane technology costing only 60-70 paisa per litre.
“Apart from driving, Jaldoot uses rickshaw’s engine for water filtration. Since in many rural areas, men are not allowed to deliver water into house-kitchens, Jaldoot employs women for the purpose. They have now put about 100 auto-rickshaws in one particular district. The Orissa Government has also shown interest in their technology to deliver water in the remotest of its areas,” says Dr Abhay Jere, Member, Expert Panel for Swachh Bharat Abhiyan, Government of India.
Apart from the filtration process that ensures the elimination of water contamination especially the presence of arsenic and fluoride, technology start-ups are also developing standalone water-testing kits to detect water contamination level.
“Right now, there is no awareness about keeping drinking water facilities far away from toilets and this is very hazardous. Through this Abhiyan, people have become more aware about water cleanliness that offers a huge business opportunity. As a result, the demand for technology that can detect water contamination and clean it has increased,” says Samuel Rajkumar, Co-founder, TernUp Research Labs, a Bangalore-based company offering device to test water contamination level called Caddisfly. The company had raised funding in October 2012 from the Water and Sanitation Programme (WSP) by the World Bank.
Getting Through Due Diligence
While the Abhiyan will give visibility to companies working in potable water and sanitation spaces, it will not let them grab a share in the massive amount allocated to the programme. Companies working on technology innovation towards water and sanitation will have to go through the rigorous selection procedure under the 19-member expert panel constituted by the government for Swachh Bharat Abhiyan.
The panel invited first set of applications from technology firms in the second week of October this year, out of which around 45 applications (in both water and sanitation) have been shortlisted where around 12 technologies are new and unique. It will invite second set of applications possibly towards early December.
“The panel’s job is to identify new sustainable technologies that can solve issues in potable water and sanitation spaces, validate and empanel them. We will be coming out with a booklet where we will list the empanelled technologies and will provide the contact details of the companies offering those technologies. The state governments can then float their respective tenders and interested companies winning the tender can go ahead with its technology implementation,” says Dr Jere.
Some of the considerations by the panel on each technology reviewed is about its uniqueness, its application and areas in which it can implemented, ability to implement technology on a large scale, place of manufacturing (domestic or imported from outside), cost, etc. Moreover, the applications will be divided into three different segments – first, technology that is new and not empanelled; second, technology that is known but not empanelled; and third, technology that is empanelled by the government previously. The process will also include live presentations and site visits.
3s India and 300 Feet Eco Solutions are few companies that are gearing up to apply to expert panel and file for tenders despite being aware of the complexities involved in obtaining a government tender. “One cannot escape the tendering process to win government projects. These companies will have to mould themselves with the strict specification of tenders. Having certain amount of track record or the financial ability to execute project will be helpful in doing business with the government,” says Agrawal.
Moreover, delayed payments remain the most common concern while working on any government project, Dr Jere states, “Delayed payment is more of a governance issue. There are some state governments that are very efficient in making timely payments while some are very lethargic,” says.
Interestingly, UPA-II that visualised clean India over a 10-year period (2012-2022), Modi-led NDA government hopes to do that within half of that timeframe. Given how sensitive Indians are towards maintaining public hygiene, one can debate over which government sounds more practical? If Swachh Bharat Abhiyan cleans India by 150th anniversary of Mahatma Gandhi, it will be quite a feather in Modi’s cap; but if not, then it will remain the second fastest growing nation globally yet a filthy one.