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ONDC – Is it the next game changer for Digital India?

If you have not come across ONDC – Open Network for Digital Commerce, its time you know about it and this post is to help better understand what problem it addresses, how it operates, and the value that it brings to consumers, businesses, retailers, existing e-commerce platforms and the state.

Problem statement

There are a number of pain points around current digital commerce:

  • Its dominated by a few players e.g. Amazon, Flipkart, Zomato, MakeMyTrip, etc.
  • Consumers have to go to multiple platforms to search and explore the products/services they would like
  • Consumers are restricted to only a subset of products/services available on the platforms
  • Consumers need to go to multiple places for different products/services
  • Penetration is not widespread across the country and small towns
  • Small businesses are not able to participate and sell in the digital commerce space

Solution

Open Network for Digital Commerce is a network of e-commerce. It is a network-centric model where, so long as platforms/applications are connected to this open network, buyers and sellers can transact irrespective of the platforms/applications they use. It’s like “UPI of e-commerce”

Source: ONDC.org

ONDC works on 3 important use cases to solve the problems, which explained very well by ThinkSchool

Discoverability – allows you to discover products across different platforms using a common catalog

Interoperability – where you can combine multiple platforms to accomplish different services e.g. product with delivery, services with payments etc.

Price comparison – allows you to compare prices across these platforms e.g. ticket prices across different ticketing platforms.

How does it work?

Through an open protocol network, various selling /buying apps such as flipkart, dunzo, airtel, paytm will connect to the network and the consumer will be able to access the product/services through any of the apps.

You can either connect to the buyer network or seller network. One of the important aspects of ONDC is to standardize the product/services catalog so that consumers get a common experience. All the technical specifications are available here

Role of ONDC

ONDC will play three roles as laid out by their CEO

Development – Build and sustain the network with cutting-edge tech and facilitation widespread participation of ecosystem players

Network Management – Establish a code of conduct for the network, with policies and rules for the network

Service Delivery – Foundation services for operations of the network e.g. registry, certification, grievances redressal

Value for stakeholders

Consumers – amazing way to explore and get the best product/services across platforms, sellers

eCommerce Companies – Gets a wide reach with Govt. backing to get to a large user footprint, make them more competitive

Small Businesses – Gets them to sell products and services across the country, without having to be associated with a single platform

Government – Accomplish the mission of connecting India digitally and enhancing the economy significantly

Challenges

This is a massive and ambitious project, balancing of different stakeholders is going to be huge, as well as connecting all of them. Also ensuring the quality of service is going to be a big factor, as the trust factor of the platform plays a big role in deciding where to buy.

But given the Government backing and really smart think tank behind this, these challenges may likely be overcome.

Key Takeaway

ONDC looks to be a huge potential and another game changer for an Atmanirbhar Bharat.

More Resources

ONDC Strategy Paper

ONDC on twitter

ONDC CEO Blog on ONDC 101

Nandan Nilekani ONDC Keynote

ThinkSchool on ONDC

Benefits and Glitches explained in detail

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iSPIRT’s Official Response to the Draft Drone Rules 2021

This is our response to the Draft Drone Rules 2021 published by the Ministry of Civil Aviation on 14 July 2021.

Introduction

The potential commercial benefits that unmanned aviation can bring to an economy has been well established in several countries. A primary and immediate use-case for drones is in Geospatial data acquisition for various applications such as infrastructure planning, disaster management, resource mapping etc. In fact, as argued in the recently announced guidelines for Geospatial data, the availability of data and modern mapping technologies to Indian companies is crucial for achieving India’s policy aim of Atmanirbhar Bharat and the vision for a five trillion-dollar economy.

The current situation in India, however, is that the drone ecosystem is at a point of crisis where civilian operations are possible in theory, but extremely difficult in practice. Because the regulations in place are not possible to comply with, they have led to the creation of a black market. Illegally imported drones are not only significantly faster, cheaper and easier to fly but also far more easily acquired than attempting to go through the red tape of the previous regulations to acquire approved drones. Thus, rather than creating a system that incentivises legal use of drones, albeit imported, we’ve created a system that makes it near impossible for law-abiding citizens to follow the law of the land and discourages them from participating in the formal system. This not only compromises on the economic freedom of individuals and businesses but it also poses a great national security risk as evidenced in the recent spate of drone attacks. If we do not co-opt the good actors at the earliest, we are leaving our airspaces even more vulnerable to bad actors. This will also result in a failure to develop a world-class indigenous drone & counter-drone industry, thus not achieving our goals of an Atmanirbhar Bharat.

The Draft Drone Rules (henceforth the draft) have addressed some of these problems by radically simplifying and liberalising the administrative process but haven’t liberalised the flight operations. Unfortunately, closing only some of the gaps will not change the outcome. The draft rules leave open the same gaps that cause the black market to be preferred over the legal route.

With the three tenets of Ease-of-Business, Safety and Security in mind, it is our view that while the intention behind the draft rules is laudable, we feel that the following areas must be addressed to enable easy & safe drone operations in India:

  1. Remove Requirement of Certificate of Airworthiness: The draft mandates airworthiness certification for drones whereas, no appropriate standards have been developed, thus, making the mandate effectively impossible to comply with.
  2. Lack of Airspace segregation, zoning and altitude restrictions: The draft doesn’t mention any progressive action for permitting drone operations in controlled airspaces.
  3. Business confidentiality must be preserved: The prescribed rules for access to data is not in consonance with the Supreme Court Right to Privacy Judgement
  4. Lack of transparent Import Policy: This results in severe restrictions on the import of critical components thus disincentivizing indigenous development of drones in India
  5. Insurance & Training must be market-driven and not mandated: We must let market forces drive the setting up of specialised training schools & insurance products & once mature they may be mandated & accredited. This will result in the creation of higher quality services & a safer ecosystem.
  6. Fostering innovation and becoming Atmanirbhar:
    A. Encouraging R&D: by earmarking airspace for testing for future drones
    B. Encouraging the domestic drone manufacturing industry: through a system of incentives and disincentivizing imports should be inherent in the Drone Rules.
    C. Recognition of Hobby flying: Hobbyists are a vital part of the innovation ecosystem; however, they are not adequately recognised and legitimized
  7. Encouraging A Just Culture: Effective root cause analysis would encourage a safety-oriented approach to drone operations. Penal actions should be the last resort and dispute resolution should be the focus.
  8. Enabling Increased Safety & Security: NPNT and altitude restrictions would enhance safety and security manifold.
  9. No Clear Institutional Architecture: Like GSTN, NPCI, NHA, ISRO, and others a special purpose vehicle must be created to anchor the long-term success of Digital Sky in India based on an established concept of operations
  10. Lack of a Concept of Operations: Although drone categories have been defined, they have not been used adequately for incremental permissions, as in other countries; rather the draft appears to prefer a blank slate approach. The failure to adopt an incremental approach can arguably be considered as one of the root causes of the drone policy failures till date in India as regulations are being framed for too many varied considerations without adequate experience in any.
1. Airworthiness

In the long term, it is strategically crucial to India’s national interest to develop, own and promulgate standards, to serve as a vehicle for technology transfer and export. The mandatory requirement for certification of drone categories micro and up is the key to understanding why the draft does not really liberalise the drone industry. It would not be too out of place to state that the draft only creates the facade of liberalising drone operations – it is actually as much of a non-starter as the previous versions of regulations.

The standards for issuance of airworthiness certificates have not been specified yet the requirement has been stipulated as mandatory for all operations above nano category in the draft (pts 4-6). However, most of the current commercial operations are likely to happen in the micro and small categories. And for these categories, no standards have been specified by either EASA or FAA. EASA’s approach has been to let the manufacturer certify the drone-based on minimum equipment requirements. On the other hand, It is only fairly recently that the FAA has specified airworthiness criteria for BVLOS operations for a particular drone type of 40kg, and which it expanded to 10 drone types in November. Building standards is an onerous activity that necessitates a sizable number of drones having been tested and criteria derived therefrom. The only other recourse would be adopting standards published elsewhere, and as of date these are either absent (not being mandated in other countries) or actively being developed (cases noted earlier). Given the lack of international precedent, the stipulation for certificate of airworthiness in the draft needs to be eliminated, at least for micro and small category drones.

2. Airspace

One of the major concerns since the early days of policy formulation in India has been the definition of airspace and its control zones. All regulations till date, including the draft, require prior air traffic control approvals for drone operations in controlled zones. However, given that controlled airspace in India starts from the ground level for the controlled zones upto 30 nm around most airports (unlike many other countries where it starts at higher levels), it effectively means no drone operations are possible in the urban centres in the vicinity of airports in India. While the Green/Yellow/Red classification system is a starting point for Very Low-Level airspace classification, the draft does not move to enable the essential segregated airspace for drone operations up to an altitude limit of 500ft above ground level.

3. Business Confidentiality

In the domain of Privacy Law, India has taken significant strides to ensure protection of individual and commercial rights over data. The draft (pt 23.) in its current form seems to be out of alignment with this, allowing government and administrations access to potentially private and commercially sensitive information with carte blanche. The models of privacy adopted in other countries in unmanned aviation are often techno-legal in nature. It is recommended that DigitalSky/UTM-SP network data access be technically restricted to certain Stakeholder-Intent mappings: executing searches for Law Enforcement, audit for the DGCA, aviation safety investigations and for Air Traffic Control/ Management. This would need due elaboration in the detailed UTM policy complemented with a legal framework to penalise illegitimate data access.

4. Insurance

One constant hindrance to compliance is the requirement of liability transfer. While the principle of mitigating pilot and operator liability in this fashion is sound, the ground reality is that as of date, very few insurance products are available at reasonable prices. The reason behind it is that insurance companies have not been able to assess the risks of this nascent industry. Assuming the regulation is notified in its current form (pt 28), arguably affording a clean start at scaling up drone operations, we will continue in this vicious dependency loop in the absence of incentives to either end. Again, market forces will drive the development of this industry with customers driving the need for drone operators to obtain insurance for the respective operations. Therefore it is recommended that initially, insurance should not be mandated for any category or type of drone operations, and instead be driven by market or commercial necessity. Over a period of time, insurance may be mandated within the ecosystem.

Similar feedback has been shared by Insurers: “Though the regulator (aviation regulator) has made mandatory the third party insurance, the compensation to be on the lines of the Motor Vehicles Act is somewhat not in line with international practices,” the working group set up by Insurance Regulatory and Development Authority of India (IRDAI) said.”

5. Training

Currently, there’s a requirement of training with an authorized remote pilot training organization (RPTO) (pt 25), applicable for micro-commercial purposes and above (pt 24). While the intent is right, it should not be mandated at the initial stage. The reality is that there are very few RPTO’s that offer training and the cost of such training is often higher than the cost of the drones themselves, while quality is inconsistent. While the current draft rules try to address this problem, they do this with the assumption that liberalizing the requirements for establishing RPTO’s will solve this problem. While this incentivizes more RPTO’s to be established, it still does not incentivize quality and leaves in place the same bureaucratic process for registration. This has been the experience of the ecosystem so far. While it is certainly reasonable to expect that remote pilots should receive training, the goal of better informed and equipped pilotry is better achieved, at this time, if left to manufacturers and market participants to drive it.

There are currently two types of training – Type training and Airspace training. Type training can be driven by manufacturers in the early days, as is the current practice, and Airspace training can be achieved through an online quiz, based on a Concept of Operations. It is our view that customers of drones will have a natural incentive to seek training for their pilots, thereby creating the market need for better quality training schools. Furthermore, as manufacturers establish higher levels of standardization and commoditization, they will partner with training schools directly to ensure consistent quality. In the upcoming years, as the drone ecosystem grows more mature, it will become reasonable to revisit the need for mandating pilot training at approved training schools, and DGCA may create a program that accredits the various RPTOs.

6. Fostering innovation and becoming Atmanirbhar
6A. R&D

To encourage institutional research and development further, we recommend authorised R&D zones be designated, particularly where low population and large areas (like deserts, etc) are available, some key areas of experimentation being long range and logistics operations which might require exemptions from certain compliance requirements.

6B. Import policy

Rather than simply delegating the entire import policy to DGFT (pt 8), there needs to be a clear statement of the import guidelines in the rules based on the following principles in the current draft:

  1. No barriers for the importation of components and intermediary goods for local assembly, value addition and R&D activities
  2. Disincentivising import of finished drone products, both pre-assembled and Completely Knocked Down. Possible avenues could be imposition of special import duty as part of well-considered policy of “infant industry protection”, a policy used successfully in the recent past in South Korea and is considered a part of the policy of Atmanirbhar Bharat by the Principal Economic Advisor to the PM, Sanjeev Sanyal.
  3. Incentivising investments in the indigenous manufacturing industry by aligning public drone procurement with the Defence Acquisition Procedure (2020) and supplemented by targeted government programs such as PLI schemes and local component requirements, which will help realise the PM’s vision of ‘Make in India’ and “Atmanirbhar Bharat’.
  4. In the long term, developing incentives for assemblers to embed themselves into global value chains and start moving up the value chain by transitioning to local manufacturing and higher value addition in India, to be in line with the PM’s vision of Atmanirbhar Bharat. Some suggestions here would be prioritisation for locally manufactured drones for government contracts, shorter registration validity for non-locally manufactured drones etc.
6C. Hobby Fliers

While research and development within the confines of institutions is often encumbered by processes and resource availability, hobby and model flying has enjoyed a long history in manned aviation as a key type of activity where a large amount of innovation happens. Hobby clubs such as The Homebrew Computer Club, of which Steve Jobs and Wozniak were members, and NavLab at Carnegie Mellon University are instances out of which successful industries have taken off. Far from enabling hobby or recreational fliers, they are not even addressed in the draft, which would only limit indigenous technology development. Legally speaking, it would be bad in law to ban hobby flying activities considering hobby fliers enjoy privilege under the grandfathering rights. A solution could lie in recognising hobbyists & establishing hobby flying green zones which may be located particularly where low population and large areas are available. Alternatively, institution-based hobby flying clubs could be authorised with the mandate to regulate the drone use of members while ensuring compliance with national regulations. The responsibility of ensuring safe flying would rest with these registered hobby clubs as is the case in Europe and USA.

7. Encouraging A Just Culture

Implementation is the key to the success of any policy. One of the key factors in encouraging voluntary compliance is an effective means of rewarding the compliant actors while suitably penalising any intentional or harmful violations. Therefore, arguably, an important step could be to build such rewards and punishments. In the context of aviation safety and security, the key lies in effective investigation of any violation while fostering a non-punitive culture. Effective investigations enable suitable corrective actions whilst minimal penal actions encourage voluntary reporting of infringements and potential safety concerns. ICAO encourages a just and non-punitive culture to enhance safety. Penal actions, if considered essential, should be initiated only after due opportunity and should have no criminal penalties except for deliberate acts of violence or acts harming India’s national security. However, considering the fallout from any unintentional accident as well, there should be adequate means for dispute resolution including adjudication.

8. Enabling Increased Safety & Security

The draft while taking a blank slate approach clearly aims to reduce hurdles in getting drones flying. However, we argue that lack of clarity on several issues or not recognising certain ground realities actually reduces the chance of achieving this. We list the details of these issues in the subsections below.

Points 13-14 acknowledge the existence of non-NPNT (No Permission No Takeoff) compliant drones and makes airworthiness the sole criteria for legally flying, provided such drone models are certified by QCI and are imported before the end of this year and registered with DigitalSky. This is a great step forward, however, keeping in mind the win-for-security that NPNT provides through trusted permissioning and logs, it is recommended that NPNT be phased back in with an adoption period of 6 months from the date of notification.

To bring back a semblance of safety to the thought process and keeping in mind that manned aviation would be operating above 500 ft except for takeoff, landing and emergencies, it would be pragmatic to enforce altitude fencing in addition to two-dimensional fencing going forward. Permissive regulation has the effect of encouraging good and bad actors alike, and this measure ensures the correct footing for the looming problem of interaction between manned and unmanned traffic management systems, where risk of mid-air collisions may be brought back within acceptable limits.

9. Institutional Architecture

The draft indicates that institutions such as QCI and Drone Promotion Council (DPC), along with the Central Government, would be authorised to specify various standards and requirements. However, no details have been specified on the means for notification of such standards as in the case of the Director-General (Civil Aviation) having the powers to specify standards in the case of manned aircraft. Such enabling provisions are essential to be factored in the policy so as to minimise constraints in the operationalisation of regulations e.g. as was observed in the initial operationalisation of CAR Section 3 Series X Part I which did not have a suitable enabling provision in the Aircraft Rules.

Further, effective implementation demands that responsibility for implementation be accompanied by the authority to lay down regulations which is sadly missed out in the draft. In the instant draft, the authority to lay down standards rests with QCI/ DPC but the responsibility for implementation rests with DGCA which creates a very likely situation wherein the DGCA may not find adequate motivation or clarity for the implementation of policy/ rules stipulated by QCI/ DPC.

It is not clear that setting up a DPC would advance policy-making and be able to effect the changes needed in the coming years to accelerate unmanned aviation without compromising safety and security. We argue that for effective policy and making a thriving drone ecosystem, Digital Sky is a unique and vital piece of digital infrastructure that needs to be developed and nurtured. In the domain of tech-driven industries, the track record of Special Purpose Vehicles (SPV) is encouraging in India, the NSDL, NPCI and GSTN being shining examples.

The field of unmanned aviation has its own technical barriers to policy making. Its fast-evolving nature makes it extremely difficult for regulators who might not have enough domain knowledge to balance the risks and benefits to a pro-startup economy such as that of India. With the context formed through the course of this paper, it is our view that an SPV with a charter that would encompass development of a concept of operations, future standards, policy, promotion and industry feedback, would be the best step forward. A key example of success to model on would be that of ISRO, which is overseen by the Prime Minister. This would remove inter-ministerial dependencies by overburdening the existing entrenched institutions.

10. Lack of a Concept of Operations

The difference in thought processes behind this draft and the rules notified on 12th March 2021 is significant and is indicative of the large gap between security-first and an efficiency-first mindsets; keeping in mind that mature policymaking would balance the three tenets. It also points to the lack of a common picture of how a drone ecosystem could realistically evolve in terms of technology capability and market capacity while keeping balance with safety and security. The evolving nature of unmanned aviation requires an incremental risk-based roadmap; the varied interests of its many stakeholders makes reaching consensus on key issues a multi-year effort. To this end, taking inspiration from various sources and focusing on the harsh realities peculiar to India, we are in the process of drafting a Concept of Operations for India.

Concluding remarks

With the goal of raising a vibrant Indian drone ecosystem, we recommend the following actionable steps be taken by policy makers:

Immediate Term – Enabling The Ecosystem

Changes to the draft

  1. Airworthiness Compliance requirements for all drone categories be removed till such standards are published
  2. Hobby flying and R&D Green zones be designated in low risk areas
  3. Guiding principles for Import policy formulation be laid out to incentivise import drone parts and de-incentivise drone models
  4. A privacy model be applied to DigitalSky ecosystem data access that technically restricts abuse while laying a foundation for a legal framework for penalties
  5. Insurance be not mandated for any drone categories
  6. The provision for setting up the Drone Promotion Council be subsumed by a SPV as discussed below
Next six months – Setting the ecosystem up for long-term success

A) NPNT be re-notified as a bedrock requirement for security

B) An SPV outside of entrenched institutions be set up with a charter to

1. Envision India’s concept of aviation operations for the next few decades

2. Formulate Future Policy and institutionalize some aspects of key enablers of operations currently missing in India:

  • Development / update of ConOps
  • Monitor / develop / customize International standards
  • Establish Standards for Airworthiness and Flight Training

3. Develop and operationalise DigitalSky in an open, collaborative fashion with oversight and technical governance mechanisms

4. Redefine control zones and segregate airspace for drone operations

5. Establish an advisory committee with equitable membership of stakeholders

6. Address all charter items of the Drone Promotion Council

Key Authors

1) Amit Garg – [email protected]

2) George Thomas – [email protected]

3) Hrishikesh Ballal – [email protected]

4) Manish Shukla – [email protected]

5) Siddharth Ravikumar – [email protected]

6) Sayandeep Purkayasth – [email protected]

7) Siddharth Shetty – [email protected]

8) Tanuj Bhojwani – [email protected]

About iSPIRT Foundation

iSPIRT (Indian Software Product Industry Round Table) is a technology think tank run by passionate volunteers for the Indian Software Product Industry. Our mission is to build a healthy, globally competitive and sustainable product industry in India.

For more, please visit www.ispirt.in or write to [email protected]

iSPIRT’s Official Response to the Draft Drone Rules 2021 from ProductNation/iSPIRT

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Can digital currencies and crypto investors help close India’s SME financing gap?

The internet connected the average Indian to millions of sources of information. Could crypto protocols connect Indians to millions of sources of capital?

To achieve its goal of a five trillion dollar economy by 2025, India needs to close an enormous financing gap for its small and medium-size enterprises (SMEs). It already has important assets with which to attract global capital: the youth of its population, the energy of its tech sector, the growth of its internet connectivity, and the rising acceptance of so-called informational collateral in lieu of traditional physical collateral. But what hasn’t yet been done is to integrate these assets into the new multi-trillion dollar cryptoeconomy, which may have the most risk-tolerant, internationally oriented, growth-seeking pool of investors in the world.

In this piece we begin by reviewing India’s need for SME and startup capital. We then tick through India’s existing assets, with particular focus on informational collateral, which combines the previously separate concepts of due diligence and physical collateral into an internet-friendly financing package. Finally, we discuss why global crypto investors could help meet India’s capital needs.

India’s need for SME and startup financing

India is home to more than 60 million businesses, 10 million of which have unique GST registration numbers, most of them SMEs. However, of the one trillion USD worth of total commercial lending exposure of the banking system, only ~25% of it is provided to SMEs, which are considered less creditworthy than larger corporates or multinationals. This has resulted in a financing gap estimated to be between 250-500 billion USD, where meritorious businesses without national profiles aren’t able to access the capital they need to finance their growth. India’s next trillion in GDP growth depends upon solving this problem, but the incumbent financial system may not have the resources to fix it alone. Despite ever-increasing bank branches, India’s legacy financial system is still slow, costly, and unwieldy for borrowers— in sharp contrast to the databases, online KYC systems and intelligent lending apps of new-age fintech companies. And in addition to this high cost of capital for MSMEs, India also has a low baseline level of financial inclusion.

The baseline issue is being partially addressed with low-frill Jan Dhan accounts, which are providing partial banking support for millions of previously excluded individuals. Many of these Jan Dhan accounts are held by small businesses, entrepreneurs, students and self-employed people in rural India, the same folks who are running India’s SMEs. But these accounts have only inflow data, with outflows typically in cash. Even though cash still plays a big role in the self-organized and informal sectors, it’s not easy to provide business-related financing in cash. The so-called JAM trinity (Jan Dhan accounts, Aadhaar digital identities, and Mobile phones) offers a partial solution for this under-banked population, but it only supports what we might think of as consumer-grade applications like basic peer-to-peer payments and individual savings accounts. Access to capital sufficient to finance a business — a true measure of financial inclusion — is still not yet present for these low-income, mostly feature-phone possessing groups.

On the other end of the spectrum from rural SMEs are India’s tech startups. Over the last decade, India has broken into the ranks of global technology and is now the #3 generator of unicorns in the world. Supportive governmental policies, combined with a young, creative, and aspirational workforce has helped reimagine large swathes of the economy including diverse industries such as e-commerce, logistics, SAAS, education, food, healthcare etc. This rise has attracted global equity and loan-funds that could in turn help many start-ups become world beating players in their respective domains. But the startup sector is just as hungry for capital as the rural SMEs, and India’s startup economy is still somewhat disconnected from global venture capitalists and financial markets.

India’s assets: youth, growth, connectivity, and informational collateral

India does have assets with which to close the capital gap. It has a youthful population. It has a fast-growing economy, even given the setbacks of COVID-19. It has an enormous population of hundreds of millions of new internet users. And it has something new, which is the possibility of informational collateral as a sort of combination of traditional concepts of due diligence and physical collateral.

Specifically, the SME funding gap is most pressing for the Indian cash-flow businesses that don’t have the physical assets to take out loans, which are the mainstay of the current, hard-collateral-backed credit system.

One alternative is to use trustworthy digital records to ascertain whether a business is worthy of credit or equity investment. India’s Goods and Services Tax (GST) helps to address this by generating invoice and payment data in a format suitable for credit underwriting and risk analysis. The GST data also enables a small enterprise in a large value system to provide data and visibility across the supply chain; for example, one can track the progress of parts from a small parts supplier to an auto component manufacturer to a large passenger car maker all the way through to distributors, sub-dealers, and retail sales.

The digital version of an SME’s sales and purchase invoices ledger thus amounts to informational collateral on both the company and the larger ecosystem within which it sits, that could become the basis for extending credit, as an alternative to the hard asset or collateral-based financial system. This is similar to how Square Capital and Stripe Capital already function in the West.

In addition to credit-based financing, the trustworthy records furnished by GST’s informational collateral can also support equity or quasi-equity financing, to support growth without increasing debt. These might take the form of direct equity investments in small businesses, or even personal micro-equity investments in individual consultants or students. 

India’s innovation: use new pools of crypto capital to address long-standing financing needs

So, we understand that (a) Indian SMEs need capital, and that (b) IndiaStack’s UPI and Aadhaar can help GST generate informational collateral for potential investors and lenders.


Now the question arises: what class of investors is most willing to use this newfangled type of informational collateral to invest in potentially high-risk businesses outside of the proven venues of America, Europe, East Asia and the large Indian enterprises? Who are the most risk-tolerant, international, forward-looking, class of investors in the world — willing to risk millions of dollars purely on the basis of internet diligence alone?

It may turn out to be the new class of wealthy, globally-minded crypto investors. After all, the 10-year old cryptoeconomy is now worth trillions of dollars, there are more than a hundred million crypto holders around the world, and there are at least fifty crypto protocols valued over one billion dollars, a “unicoin” analog to the traditional tech unicorn. While still small in comparison to global capital markets, a sector worth $2T that is growing at more than 100% per annum could become a much larger piece of the global financial puzzle in short order. This is a new source of risk-tolerant digital capital that could flow into India to help close the SME financing gap, if we can make it an attractive proposition for the global investor.

Specifically, India could offer a viable path to deploy this new crypto wealth in a controlled manner, while solving for SME financial inclusion. Inflows of cryptocurrencies from KYC-ed investors through approved Indian and global exchanges can potentially be allowed into India for the purposes of enhancing SME access to low-cost global capital. GST-registered companies could, for instance, receive capital against their issued e-invoices and other information collateral in special accounts opened via a controlled conduit such as GIFT city, which is one of India’s favored bridges to international markets. The companies benefiting will need to explicitly consent to sharing their information and receiving funds into a new account at system-level while capturing cash flows against invoices for repayment. Inflows of global crypto-capital into Indian SMEs could also enable the rest of the credit system to migrate to informational collateral-based lending. And the special account could eventually be ported to a wallet backed by a national digital currency, such as the proposed digital rupee.

For more detail on this possibility, we invite your attention to Balaji S. Srinivasan’s companion piece on the subject, where he proposes to Add Crypto To IndiaStack. Balaji makes the case for crypto-powered extension of IndiaStack, which broadens IndiaStack from its current mostly domestic remit into an international platform for attracting capital from around the world. He describes several case studies by which the emerging world of decentralized finance or “defi” could help enrich the Indian economy, without competing with the digital rupee. For example, Indian startups could benefit from crypto crowdfunding, Indian SMEs as discussed could access global defi lending pools, and Indian students might even be funded with the emerging concept of personal tokens, like an equity-based version of microfinance. As the former CTO of  Coinbase, the $100B crypto goliath, and a former General Partner at Andreessen Horowitz, the $16B venture capital firm, Balaji’s proposals have technical and social support from the very class of investors we’d seek to attract. At least insofar as they relate to the issue of plugging the SME financing gap, we believe they deserve serious consideration by policymakers in India. 

In short, India has a unique opportunity to close the SME financing gap by attracting the new class of global crypto investors, by using everything the IndiaStack team has helped build over the last decade — particularly UPI, Aadhaar, GST, and the informational collateral they generate —  to help connect the trillion-dollar cryptoeconomy to capital-hungry Indian entrepreneurs.

The blog post is co-authored by Sanjay Phadke, Krishna V Iyer, Pankaj Gupta, Sanjay Jain, Sharad Sharma and Siddharth Shetty.

For any further queries, please write to [email protected]

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Mapping Policy a major Progressive reform for Digital India

Almost everything in the tangible world has a location attached. In the future Data Economy, map information is going to be one very important piece of information.

The Government of India announced a policy and new guidelines of using Mapping and relaxed the Policymaking it simple enough, aiming at unbundling the economic value across all sectors in the economy. 

Click here to read the entire notification issued by the Ministry of Science and Technology, Government of India.

iSPIRT organised a panel discussion on the policy announcement to understand the policy and its importance for India. This blog post is an exciting read and listen for young innovators wanting to reimagine the economy as almost each and every thing will require mapping.

Following participants took active part in discussions.

  1. Lalitesh Katragadda, Co-Founder of Indihood
  2. Umakant Soni, Co-founder & CEO of ARTPARK (AI & Robotics Technology Park), AI Foundry
  3. Mohit Gupta, Co-Founder of Zomato
  4. Sudhir Singh, Volunteer at iSPIRT (Policy Hacks Anchor)

Recorded Video Transcript

Subsequent to introduction, Sudhir Singh (anchoring the Panel) opened the discussion asking Lalitesh Katragadda to explain important features of Policy announced.

Lalitesh explaining the policy salient features said “all the other Map’s policies that used to exist in various departments currently stand null and void, and they are replaced by this one very simple policy that has been issued, and people who embark on Mapping don’t have to worry. 

He further added, “ if you are Indian company you can map anything except for a small blacklist of attributes and features that you should not map, I’m sure will be related to military and security. And, you can map using whatever technology that you want, you can use lidar, you can use high-resolution cameras, underwater, over water, anything. You cannot just create Maps you can disseminate, sell and distribute.” 

“The only restriction if anything is that international mappers are restricted to a higher level of resolution for security purposes and they can also have access to high resolutions Maps created by Indian entities. This new policy is so simple that it creates freedom to map”, he said.

Mohit Gupta said, “for me the most important thing is Government taking notice”, and “coming to an understanding about the digital infrastructure required to build high-quality businesses and services across a large spectrum of different areas”.

He also expressed his happiness on the news that the Indian Space Research Organisation (ISRO), a Government organisation and MapmyIndia a private Indian company are collaborating.  

Mohit Gupta informed that they tried in the past, experimenting with various different players who provide mapping services both Indian and international and understand the importance of alternative options to handle both the precision mapping and business economics.

Umakant Soni started the discussion by quoting an example of google maps and how they had increased the cost from free to 10X to 20X and made it expensive to use their service and almost single-handed dependence upon them.

He said that, “fundamental thing that was different in the mobile revolution was the use of location” and that, “the immersion of the digital world into the physical world started with the whole mobile revolution and I think Zomato and Ola kind of companies have actually really profited from that”.

According to him, If out of every ₹4 that a business earns out of its services, it is spending ₹1 on mapping, then it is tough to sustain certain kinds of business models. Hence, it is a great move to create more options, thereby reducing the price in the long-term and benefit the Indian consumer.

He gave a perspective on the amount of value mapping technology and applications can unlock. Quoting the survey he explained 90% of the value lies in intangibles and this is not possible to unlock this value without having easy reformative mapping policy, that will help India to build the 5Trillion 10 Trillion Economy. 

“The challenges that we are at 3 trillion, wanting to go to 10 trillion, and we are talking about additional 7 trillion out of that 90% i.e. 6.3 trillion is going to be in the digital domain. If you’re not own the critical pieces which are going to create the intangible assets,  we will not be reaching 10 trillion. We might actually get to 3.7 or 4 trillion that’s it in another 10 years” explained Umakant.  

The other perspective on the value that Umakant gave was on how Google is inherently underestimating its business targets of 5 billion revenue from mapping. Quoting Baidu’s estimates from China, he explained that more than 70% of this value is lying in the future data economy, where location and mapping data will actually flow from sensors, almost everywhere in our lives. According to him, this data will augment the present Satellite imagery and physical mapping. 

“You will be able to catalogue and tag every single object that you see in the physical world around you and that is the future of mapping, and this policy, actually unleashing this whole system of innovation that is now possible because this tiny little camera has got lidar,  you can actually see a single object, and that’s where the computing moving onto the edge”, said Umakant. 

He further added that “I mean we have not even started to comprehend what it might be”, And  “that’s why it’s great news for Indian start-ups founders. What is next right after the mobile revolution, I think Maps. You know combined with AI and robotics they are going to form the next big wave of change in terms of massive business potential we have”, said Umakant.”

On the question of whether we can go International, Lalitesh answered,  “when we have the best mapping technologies available and that will only happen if we start in our own backyard.” 

He had further explained that according to a rough guess not more than 15% of India is mapped and we need to map everything that matters in India for development. According to him, there is a lot of work to be done, it won’t happen with just one company building it. 

He further added that “democratization can only happen if the underlying layers become accessible which is both coverages has to increase quality has to increase and that can only happen with large amounts of innovation” and making it as easy as creating websites’.

‘So, I am looking forward to a world where we have you know hundreds, if not thousands of mapping innovations coming”, he added. 

Mohit expressed his agreement with Lalitesh on how unmapped India was and explained the Challenge it posed to them in food delivery even to urban dwellers. 

He went on to explain how they had to innovate and add a pre-recorded voice (audio instruction) message for consumer location to solve a problem of precision mapping.

He said that the “Audio instructions “we had to launch and are being used very widely, the last mile addresses and ability to get last-mile addresses accurately is very poor as a result a lot of our riders would end up calling customers for last-mile instructions.”

“Reality is that, there is a lot of ground to be covered for maps”, he added. 

He also informed that they do not like over-dependence on a single player and hence has been doing a pilot almost every year with MapmyIndia. He felt that MapmyIndia has also a room to improve and become competitive to existing major services. 

Sudhir posed a question on how easy it will be to use maps and if the process of using mapping information will be as stringent as existing offline maps, which sometimes require the approval of a senior official like joint secretary of Government of India, to obtain a physical map and use. 

Lalitesh answered, “policy calls for all the government agencies cooperating, obviously if not of security sensitivity, which is most of the mapping data, to be made accessible to Indian company I’m hoping see changes coming” 

Maps that you can depend on how to run on good quality data otherwise they will fail so so this is really enabler I don’t look at the map a product at the map enabling piece of infrastructure that every you know digital entity in India needs to have access to 

Lalitesh further went on to explain how mapping can change lending, by using mapping in property and land record.  According to him, it has the potential to unlock more than 4 and a half-trillion dollars of capital both for small business.  

****The End****

Disclaimer: The discussion and ideas expressed here should not be construed as legal advice. The discussion is conducted with Industry practitioners and experts for purpose of benefiting the Industry members in Software product, IT or ITeS Industry

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IGP (Innovative Growth Platform): The Capital Enabler

Two Cs are extremely critical for startups: Capital and Customers. In India, with a population of 1.3B, customers for B2C or B2B2C startups is not an issue. For B2B startups, although the market in India is promising, global markets are still very important.  Capital on the other hand is trickier. The total capital raised by startups India from 2010-2020 is around $100B. In the same period, startups in China have raised 4x and startups in the US have raised 10x the capital raised by startups in India. India needs to have a stronger mechanism to enable more Capital. There is a need to increase Capital availability in India.

IGP platform proposed by SEBI is a very refreshing initiative that aims to address the Capital issue. It provides another great avenue for startups looking to raise series B and beyond. This platform can double the available capital over the next 5 years. It addresses a key pain point of Capital availability for startups raising between INR 70 to INR 200 Cr. There is a chasm in this space- there are early-stage VC funds and there are PE funds for growth companies. However, there is not enough growth stage VC funds in India to fill this gap. IGP has the potential to be the platform to bridge this void.

The design of IGP has been very thoughtful with the key focus is on technology startups. The precursor to IGP was ITP (Institutional Trading Platform). Due to various reasons including the maturity of the startup ecosystem, the response to this platform was tepid. IGP addresses a few key pitfalls of ITP.

IGP restricts the listing to technology-focused companies with a proven Product-Market Fit and entering its growth phase. The revenue of the companies listing on this platform is expected to exceed INR 50 Cr. This will greatly help in mitigating the risk of listing by ensuring a good understanding of Product-Market Fit beforehand.

The governance issues are well balanced – protects the investor interests but at the same time provides enough flexibility for the founders to have control over strategy and execution. The companies listing on this platform cannot be burdened with the same rules of the public markets as they need to be very nimble. A balance between taking risks and moving fast with financial discipline as against governance practices such as quarterly reporting and stability is advised.

As in the case of investments in Alternative Investment Fund, the platform is selective about its investors. The companies listing on this platform need to operate as startups and not as mature companies. The risks are much greater with these companies and hence it is very critical to have investors who understand these risks and who can understand these nuances. 

M&As have been a key hurdle for startups in India. This is one of the key reasons for companies opting to flip. The platform is designed to simplify the process of M&As, post-listing. Simplifying the M&A process encourages corporates and PEs to participate on the platform. However, this spirit should be maintained in the implementation of the platform as well.  This is one of the critical success factors for the platform.

For the Indian startup ecosystem to become one of the major contributors to the economy, key policy changes are needed. IGP is one such platform that has the promise to increase capital availability significantly.  IGP has the added advantage of enabling exits for early stage investors. This increases the liquidity in the market that will further spur the startup ecosystem- a much needed virtuous cycle.

NASDAQ encouraged and enabled technology startups to list because of its adaptability and easier listing and governance guidelines. This accelerated technology startups in the US. IGP has the potential to be that platform in India. India can build products for the world and has the potential to be startup capital, but it needs a perfect storm of- Capital, Liquidity, Policy, Customers, and Entrepreneurs. IGP certainly has the promise to address the Capital and Liquidity aspects. Most importantly it enables Indian startups to stay in India!

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Announcing Healthathon 2020

  1. Context
  2. Format
  3. Ideas & Themes
  4. Speakers & Judges
  5. Event Calendar
  6. Sponsors & Partners
  7. Prizes
  8. Registration Details

Context

Those of you who have been following this blog would know that as we speak, India is rolling out a piece of public digital infrastructure known as the National Health Stack (NHS). This project, which is being put into place to futurize the nation’s health technology ecosystem, has exciting and important ramifications for the entire country.

The ground reality in India is that the doctor:patient ratio in the country is low and inequitably distributed. Moreover, the digitization of health data is minimal and the availability of care facilities is sporadic. Taken together, these factors contribute to a relatively subpar standard of public health, which in turn affects happiness and productivity. In a country like India in which each percentage point of productivity and growth corresponds to millions of people moving out of poverty, it is doubly important to bring up the standard of public health as quickly as possible.

One of the components of the NHS which can do this is the Personal Health Records (PHR) system. This system establishes a standardized interface for storing, managing, and sharing medical data, all with user consent. If users can assert greater control over their own health data, they can derive more utility, convenience, and value. This might take expression through easier access to teleconsultations, or perhaps through a better consumer interface to canvas second opinions about some test reports or medical images. The PHR could also allow for individuals to securely and voluntarily contribute their anonymized healthcare data towards data sets used to map and manage public health trends over time.

The possibilities for the PHR system are many, but it will require a collaboration between the public sector, private sector, and medical community to make the most of this technology. For this reason, we are excited to announce the launch of the Healthathon 2020.

This four-week long virtual conference aims to bring together different stakeholders to work on solutions and products stemming from the PHR system. One key group of stakeholders is the public sector bodies like the NHA and MoHFW,  without whose support this initiative can never reach all of the 1.3 billion Indians. The second group is the private sector players such as health tech companies, entrepreneurs, private equity investors, and technology providers – without their creativity, capital, and execution capacity, it will be hard to make any project sustainable or scalable. The last stakeholder group is the medical community of doctors, hospitals, labs, and others; it is clear that without the buy-in and support of this group, no technology intervention can pinpoint or solve the most pressing problems. 

Format

The Healthathon 2020 will feature two competitions: the Hackathon and Ideathon. The Ideathon is a 2-week long event aimed at students, medical practitioners, and non-technical parties. During this event, teams will compete to come up with the best business plans and product ideas around the PHR system. 

In contrast to the Ideathon, the Hackathon is a 4-week long event aimed at startups, corporates, entrepreneurs, developers, and health tech enthusiasts. As part of the Hackathon, teams of developers will work on building projects on top of the new PHR APIs provided by our sandbox providers. 

Participants in both competitions will receive the mentorship, guidance, and resources they need to put out the best possible submissions. Panels of judges will then award prize money to the best teams from each competition. 

In addition to the Ideathon and Hackathon, there will also be a slew of masterclasses, panel discussions, and other events. These sessions are intended to generate engagement, awareness, and innovation around the PHR system, and they will all be recorded and open to the public. 

We hope that the event will draw in participants from different fields and backgrounds, united in the purpose of leveraging technology to make India healthier, more inclusive, and more efficient.

Hackathon & Ideathon Themes

Some of the themes that teams could choose to work on for the two competitions could include:

End Use Apps:
  • Apps that can read healthcare reports and provide some additional context or insight using AI
  • Platforms to help create real time monitoring and alerts for doctors using their patient’s wearable device data
  • Doctor-facing apps that help unify and analyze patient’s health records across different data sources
  • Health lockers for secure and convenient long term storage of health data
  • Matching systems that pair patients with the right kind of care provider given a medical report or treatment history
  • Anonymised health trends/dashboards for epidemiological studies
  • Preventive care applications that promote healthy living by tracking health markers and gamifying healthy living
  • Applications that provide and track continued & personalized care plans for chronic disease patients (eg. cancer care) 
  • New insurance products, possibly featuring fraud prevention and auto-adjudication based on PHR 
Consent Management:
  • Apps that help the user discover, link, and share access to their medical data
  • Building assisted and accessible consent flows for low-literacy or non-smartphone users
  • Systems to delegate patient consent in case of emergencies or other extenuating circumstances
  • Consent lifecycle management systems ie. generating, storing, revoking, and  safeguarding consent
  • Easy and informed consent experiences eg. “scan to share data”, “understand what you are consenting to”
Middleware and Utilities:
  • Secure data storage and management facilities
  • Tools to help medical institutions adopt and use the PHR system
  • AI utilities to decipher and parse medical data
  • Developer tools to simplify and abstract the workflows for PHR development 

Speakers and Judges

Here is a list of some of the speakers and judges for the event:

  • Kiran Mazumdar Shaw, Executive Chairperson, Biocon
  • Dr. C. S. Pramesh, Convener, National Cancer Grid
  • Sanjeev Srinivasan, CEO, Bharti Axa General Insurance
  • Arvind Sivaramakrishnan, Group CIO, Apollo Hospitals
  • Nachiket Mor, Commissioner, Lancet Committee on Reimagining Healthcare in India
  • Shashank ND, CEO, Practo
  • Gaurav Agarwal, CTO, 1mg
  • Dr. Ajay Bakshi, CEO, Buddhimed
  • Dr. Aditya Daftary, Radiologist, Innovision
  • Kiran Anandampillai, Technology Advisor, NHA
  • Dharmil Sheth, CEO, PharmEasy
  • Pankaj Sahni, CEO, Medanta
  • Veneeth Purushotaman, Group CIO, Aster Healthcare
  • Yashish Dahiya, CEO, Policybazaar
  • Abhimanyu Bhosale, CEO, LiveHealth
  • Prabhdeep Singh, CEO, Stanplus
  • Rajat Agarwal, Managing Director, Matrix Partners India
  • Tarun Davda, Managing Director, Matrix Partners India

Prospective Talks and Masterclasses

  • “An overview of the NHS architecture and objectives”
  • “A deepdive into the PHR APIs”
  • “Medical imaging data: Changing the Status Quo”
  • “Using delegated consent to bolster efficacy in emergency care”
  • “Technology challenges and opportunities for hospitals and labs”
  • “Health Tech in India: successes and areas of improvement”

Sponsors and Partners

Principal Sponsors
  • Matrix India Partners
  • Swasth Alliance
Knowledge Partners
  • CHIME India
  • HIMSS India Chapter
Sandbox Providers
  • National Health Authority
  • LiveHealth
Organization Partner:
  • Devfolio

Cash Prizes

Six teams in the hackathon will be eligible to win prizes of Rs. 50,000 each

Five teams in the ideathon will be eligible to win prizes of Rs. 20,000 each.

Dates, Registration, and Outreach

Registration Link (for both events): https://healthathon.devfolio.co

Registrations Close (for both events) : 22nd October, 2020

Opening Ceremony: 24th October, 2020

Ideathon submissions: November 6th, 2020

Hackathon submissions: November 19th, 2020

Closing Ceremony: 22nd November

Outreach: [email protected] (Email subject: “Healthathon”)

Blog Post Image Source: SelectInsureGroup.com

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iSPIRT Fourth Open House on OCEN: Market Opportunities

On 14th August we hosted the fourth open house session on Open Credit Enablement Network (OCEN). This week’s discussion focused on the different roles and market opportunities for ecosystem participants across the lending value chain.

To recap, OCEN (O-Ken) is a new paradigm for credit that seeks to provide a common language for lenders and marketplaces to build innovative, financial credit products at scale.

In last week’s session, we did a deep dive into the underlying OCEN API flows, covering different entity interactions in-depth and addressing common technical queries. 

We began by highlighting the shift from balance sheet based lending to cash flow based lending that will be enabled by OCEN adoption. This upgraded methodology gives lenders a more holistic way to assess the creditworthiness of potential borrowers while allowing for more innovation in the kinds of products that can be offered to individuals and MSMEs.

OCEN is built around the idea that any service provider that interfaces with consumers and MSMEs can become a Fintech-enabled credit marketplace i.e. a Loan Service Provider. A key component to the success of this approach is that data from these digital platforms will reduce the information asymmetry between borrower and lender. 

There is room for entities to play the role of Derived Data Providers by digesting this data (after obtaining user consent) and helping to inform the lender’s credit rules. Working alongside specialised Underwriting Modellers, these players can map the best the fit between lender and borrower, making for smarter underwriting. 

OCEN is designed to enable many types of LSPs offering diverse ‘species’ of credit products. While the last three sessions have focused on MSME credit, this week our volunteers covered several use cases for individual consumers and service professionals. Principally these resemble the ‘Type 4’ loan products highlighted in earlier sessions where the end use for the loan is defined, and the repayment is locked into incoming cash flows.

Through the past few weeks one of our objectives has been to illuminate the range of opportunities for participants (both new and incumbent) to get involved in an OCEN-enabled lending process. Entities can provide value by bringing superior distribution, data, technology, or capital into the equation. 

LSPs have an important role to play as ‘agents of the borrower’. Technology Service Providers (TSP) need to work with lenders, LSPs or both, helping them to successfully come onboard the OCEN protocol. Account Aggregators play the role of data fiduciaries, facilitating the consented sharing of financial information in real time. Payment Service Providers (PSP) provide a ready infrastructure for both the disbursement of loans and collection of repayments.

Even incumbent fintech lending marketplaces that have a ‘deep, tacit know-how of the lending domain’ can play multiple roles in the cash flow based lending value chain.

Finally, our volunteers talked about CredAll, which is a collective of lending ecosystem players to drive cash flow based lending. Participants interested in becoming an OCEN-enabled Lender or LSP can have a look through the suggested checklist and basic requirements for each.

The fourth session on OCEN covered the following topics broadly, and the entire webinar is also available on our official Youtube channel:

  • By Siddharth Shetty
    • An introduction to iSPIRT and our values
  • By Nipun Kohli
    • New cash flow based lending paradigm
    • Derived data providers
    • How DDPs and Underwriting Modellers can help assess the creditworthiness of potential borrowers
    • Types of lending products enabled by OCEN
    • Product example 1 (Consumer finance use cases like paying school fees or streaming charges)
    • Product example 2 (For service professionals)
  • By Ankit Singh
    • Opportunities for different stakeholders at various stages in the credit lifecycle
    • Different ways entities can add value
    • How an LSP is different from a DSA
    • 5 D’s of value addition for LSPs
    • The role of Technical Service Providers (TSP), Account Aggregators (AA), and Payment Services Providers (PSP)
    • OCEN opportunity for incumbent fintech lending players
    • How to become an OCEN-enabled lender or LSP

After the presentation, our volunteers answered some questions from the community including:

  • How to think about constructing the right business models for LSPs and lenders?
  • Does a DDP always have to be an LSP?
  • What are the opportunities for existing fintech players?
  • What are the KYC implications for OCEN?

As always, in order to successfully create a new credit ecosystem for Bharat it will take the collaborative effort of participants from every corner of our fintech ecosystem.

If you’re interested in participating as a:

  • Loan Service Provider
  • Lender
  • Technology Service Provider

please drop us an email at [email protected]

Readers may also submit any questions about the OCEN to the same email address and our anchor volunteers shall try their best to answer these questions during next open house discussion (P.S: Time and Date is yet to be decided)

If you would like to know more about becoming an LSP, please check out www.credall.org (CredAll is a collective of lending ecosystem players to drive cash flow based lending)

Recommended Reading:

Chapter 7 and 8 in RBI UK Sinha MSME committee report: https://www.rbi.org.in/Scripts/PublicationReportDetails.aspx?UrlPage=&ID=924

Introduction to India Stack’s fourth layer – Data Empowerment & Protection Architecture: https://www.youtube.com/watch?v=mW__azI8_ow

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Technical Standards of the Personal Health Records (PHR) component of the National Health Stack

We have an exciting announcement for you all today!

We are publishing a draft of the technical standards of the Personal Health Records (PHR) component of the National Health Stack (NHS)!

As a refresher, these standards govern the consented sharing of health information between Health Information Providers (HIPs) – like hospitals, pathology labs, and clinics –  and Health Information Users (HIUs) like pharmacies, medical consultants, doctors, and so on. The user’s consent to share their health data is issued via a new entity called a Health Data Consent Manager (HDCM). 

This is a big deal. The problem today is that the electronic health records listed in one app or ecosystem are not easily portable to other systems. There is no common standard that can be used to discover, share, and authenticate data between different networks or ecosystems. This means that the electronic medical records generated by users end up being confined to many different isolated silos, which can result in frustrating and complex experiences for patients wishing to manage data lying across different providers. 

With the PHR system, a user is able to generate a longitudinal view of their health data across providers. The interoperability and security of the PHR architecture allows users to securely discover, share, and manage their health data in a safe, convenient, and universally acceptable manner. For instance, a user could use a HDCM to discover their account at one hospital or diagnostic lab, and then select certain electronic reports to share with a doctor from another hospital or clinic. The flow of data would be safe, and the user would have granular control over who can access their data and for how long. Here is a small demo of the PHR system in action. 

The standards document released today offers a high level description of the architecture and flows that make this possible. You can find version 0.5 of the document embedded below.

Health Information Flows Technical Standards – V 0.5 from ProductNation/iSPIRT.

All the exciting progress we are making on this new digital public infrastructure for healthcare is all thanks to you, the community. We are grateful for your support and look forward to engaging with you further!

The blogpost is co-authored by our volunteers Aaryaman Vir, Saurabh Panjwani and Graphics by Dharmesh BA.

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Covid19 Crisis: Sharpen the Saw with Marginal Costing

When reality changes, it’s important for the firms to acknowledge and adjust to the new situation. This is the time to remember the mantra ‘Revenue is Vanity, Profit is Sanity, Cash is Reality’.

The Covid-19 crisis is much written about, debated and analyzed. If there is one thing everyone can agree about on the future, it is that there is no spoiler out there for this suspense. The fact is that no one knows the eventual shape of the business environment after the pandemic ends. 

When revenue momentum slows down or even hits a wall as it is happening in the current scenario, costs take centre stage even as every dollar of revenue becomes even more valuable for the firms. So, enterprises need an arsenal of strategic weapons to operate and survive, maybe even thrive, in this period of dramatic uncertainty. The same old-same old, push-push methods will not move the needle of performance. 

As an entrepreneur and CEO, I have always found the theory of Marginal Costing (MC) to be practically powerful over the years. Let me tell you why.

At the best of times, MC is a useful tool for strategic and transactional decision making. In a downturn or a crisis, it is vital for entrepreneurs and business leaders to look at their businesses through the MC filter to uncover actionable insights.

Using MC-based pricing, the firm can retain valuable clients, win new deals against the competition, increase market share in a shrinking market and enhance goodwill by demonstrating dynamism in downmarket.

As the firm continues to price its products based on MC, the idea is to continually attempt to increase the price to cover the fixed costs and get above the Break-Even Point (BEP) to profitability. However, this happens opportunistically and with an improving environment. 

Pricing for outcomes is more critical during these times and playing around with your costing models can go a long way in determining the most optimal outcome-based pricing approaches. 

Steps to Get the Best Out of MC:

1. Determine bare minimum Operating level

Estimate the bare minimum operating level or fixed costs you will need to bear to stay afloat and capitalize on revenue opportunities. This is the BEP of the business. This estimate can include:

  • Facilities, machines, materials, people and overheads. 
  • All R&D expenses required to support product development
  • Necessary support staff for deployment and maintenance of products/services.

2.  Ascertain the variable costs

Identify the incremental costs involved in delivering your business solutions to fulfil contractual and reputational expectations to both existing and new customers. These costs are the variable costs in your business model. Try to maximize capacity to flexibly hire, partner or rent variable costs as needed, based on incremental revenues.

3. Distinguish between fixed costs and transactional variable costs.

Take your fixed costs at your operating level as costs for a full P&L period. Let’s say, the fiscal year. Take your variable costs as what it takes to fulfil the Revenues that you can book. Make sure you only take the direct, variable costs. Note that if Revenues less Variable costs to fulfil the revenues is zero, then you are operating at MC.

4. Sweat the IP already created.

For every rupee or dollar you earn over and above the MC, you are now contributing to absorbing the fixed costs. Do bear in mind that all historical costs of building the IP are ‘sunk’, typically to be amortized over a reasonable period. Hence, it doesn’t figure in the current level of fixed costs. The idea now is to ‘sweat’ the IP already created. 

5. Peg the base price at marginal cost.

Start at the level of marginal cost, not fully absorbed costs. Then, try and increase the price to absorb more and more of the fixed costs. The goal is to get to BEP and beyond during the full P&L period. At the deal level, be wary of pricing based on the fully-loaded costs (variable and fixed costs, direct and indirect).

6. Close the deal to maximize cash flows

Price your product at marginal cost + whatever the client or market will bear to get the maximum possible advance or time-linked payments. This is a simple exchange of cash for margins wherever possible and an effective way to maximize the cash flows. Many clients, especially the larger ones, worry more about budgets than cash flow. 

Let’s look at a high-level illustration. 

Assume a software product company providing a learning and development platform to the enterprise marketplace. Let’s call this company Elldee.

Elldee has a SaaS business model that works well in terms of annuity revenues, steady cash flows and scale. Clients prefer the pay-as-you-model representing OpEx rather than CapEx. Investors love the SaaS space and have funded the company based on the future expectations of rapid scale and profitability.

However, given the ongoing crisis condition, Elldee needs to take a good re-look at the licensing model. By applying MC filters, it may make more market and financial sense to maximize upfront cash by doing a longer-term `licensing’ deal for the software-as-a-service at even a deep discount, with back-ended increments in price. The variable costs of on-boarding a client are similar to a SaaS deal yet the revenue converts to contribution to absorb fixed costs quickly to help survival and longer runway for future growth. So the client pays lesser than what they would have for a three year SaaS deal but Elldee is able to sweat its IP while maximizing cash flows.

Elldee can even move its existing SaaS clients to this model to capture more revenues upfront by being aware of MC and figuring out the right pricing models to get to the BEP of the business or product. Outcome-based pricing can also be designed to deliver margins beyond the MC, contributing to the absorption of fixed costs more aggressively.

Elldee is now in a position to address different types of markets, clients and alliances. It can calibrate higher and higher margins as the environment improves and client relationships deepen. Over the next two years, Elldee would come out stronger with a more loyal client base, higher market share and a growth trajectory aligned with its pre-Covid19 business plans.

Yes, this is a simplified example but many variations to the theme can be crafted, based on a firm’s unique context.

Remember that a strong tide lifts all boats but a downturn separates the men from the boys. Marginal costing techniques, when customized for sector-specific operating models, delivers a competitive edge at a time from which will emerge stronger winners and weaker losers. Be a winner.

About the contributor: Sam Iyengar is a PE investor, mentor and advisor focused on Innovation and Impact. He can be reached at [email protected].

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NHS Open House Discussion #4: Doctor Registry, Enrollment APIs And PHR

On 13th June, iSPIRT hosted the fourth open house discussion on the National Health Stack (NHS). For anybody unfamiliar with the NHS, here are some introductory blog posts and videos.

In the session, our volunteer Vikram Srinivasan deep dived into the Enrollment APIs of the electronic doctor registry. These APIs are called when a new doctor is being added to the registry, or when a doctor’s information is being uploaded. 

Vikram also spoke about the attestation APIs, which come into play when an attesting institution (such as a state medical council, medical college, or hospital) confirms some data about a doctor. This is crucially important for building trust in the registry and preventing the proliferation of false profiles. With the release of these enrolment and attestation APIs, all the APIs pertaining to the electronic doctor registry are now available here.

After Vikram’s presentation, he and our other volunteer Siddharth Shetty answered some technical questions submitted by the community. Here are some of the questions they fielded:

  • Doctors have multiple identities (from different medical councils), how are these unique IDs handled by the electronic registry?
  • Can anybody access the doctor information in the registry, including phone numbers and photographs of doctors?
  • Who can healthcare companies partner with in the Health Stack Ecosystem?
  • How does the federated network architecture of the PHR system deal with downtimes, incorrect data, and other failure? Is this architecture scalable for a system with 1000s of participants?

As always, these were great questions. You can watch Sid and Vikram answer these questions and walk through their presentations below. Please keep the questions coming by sending them in through this form: https://bit.ly/NHS-QAForm.

If you would like to get involved with Health Stack, we encourage you to watch the recordings of the previous Health Stack open house discussions before reaching out.

Furthermore, if you are interested in the Health Stack and wish to build on top of it or contribute to the working groups being formed, you should reach out to [email protected]

Please note: The fifth open house on PHR Implementation was previously planned for 27th June. This has been postponed to 11:30 am on 4th July due to unavoidable circumstances.

To confirm your participation, continue to register on this form.

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iSPIRT Open House Discussion on National Health Stack [Virtual]

The National Health Stack is a set of foundational building blocks that will be built as shared digital infrastructure, usable by both public sector and private sector players. 

Healthcare delivery in India faces multiple challenges today. The doctor-patient ratio in the country is extremely poor, a problem that is exacerbated by the uneven distribution of doctors in certain states and districts. Insurance penetration in India remains low, leading to out-of-pocket expenses of over 80% (something that is being addressed by the Ayushman Bharat program). Additionally, the current view on healthcare amongst citizens as well as policymakers is largely around curative care.

Preventive care, which is equally important for the health of individuals, is generally overlooked. The leapfrog we envision is that of public, precision healthcare. This means that not only would every citizen have access to affordable healthcare, but the care delivered would be holistic (as opposed to symptomatic) and preventive (and not just curative) in nature. This will require a complete redesign of operations, regulations, and incentives – a transformation that, we believe, can be enabled by the Health Stack.

iSPIRT Foundation in partnership with Swasth Alliance is hosting an Open House Discussion on the following building blocks of the Health Stack

  • Doctor Registry
    • The ability for doctors to digitally authenticate themselves and share their electronic credentials with a third-party application such as a telehealth provider
  • Personal Health Record (PHR) System
    • The ability for every Indian to be empowered with control over their health data such that they can share it with trustworthy clinical providers to access a digital service
  • Open Health Services Network 
    • A unified health services network that comprises of a common set of protocols and APIs to allow health services to be delivered seamlessly across any set of health applications, doctors, and providers. 

The virtual session will be from 11:30 AM to 1:00 PM on Saturday 23rd May.

To confirm your participation and receive the virtual link, please click here.

Recommended Reading 

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The future of ‘civic’ technologies after COVID-19

In 1973, the British economist Ernst Schumacher wrote his manifesto “Small is Beautiful”, and changed the world. Schumacher’s prescription — to use technologies that were less resource-intensive, capable of generating employment, and “appropriate” to local circumstances — appealed to a Western audience that worried about feverish consumption by the ‘boomer’ generation. Silicon Valley soon seized the moment, presenting modern-day, personal computing as an alternative to the tyranny of IBM’s Big Machine. Meanwhile, in India too, the government asked citizens to embrace technologies suited to the country’s socio-economic life. Both had ulterior motives: the miniaturisation of computing was inevitable given revolutions in semiconductor technology during the sixties and seventies, and entrepreneurs in Silicon Valley expertly harvested the anti-IBM mood to offer themselves as messiahs. The government in New Delhi too was struggling to mass-produce machines, and starved of funds, so asking Indians to “make do” with appropriate technology was as much a political message as it was a nod to environmentalism.

And thus, India turned its attention to mechanising bullock carts, producing fuel from bio-waste, trapping solar energy for micro-applications, and encouraging the use of hand pumps. These were, in many respects, India’s first “civic”, or socially relevant technologies.

The “appropriate technology” movement in India had two unfortunate consequences. The first has been a celebration of jugaad, or frugal innovation. Over decades, Indian universities, businesses and inventors have pursued low-cost technologies that are clearly not scaleable but valued culturally by peers and social networks. (Sample the press coverage every year of IIT students who build ‘sustainable’ but limited-use technologies, that generate fuel from plastic or trap solar energy for irrigation pumps.) Second, the “small is beautiful” philosophy also coloured our view of “civic technologies” as those that only mobilise the citizenry, out into farms or factory floors. Whether they took the form of a hand pump, solar stove or bullock cart, these technologies did little to augment the productivity of an individual. However, they preserved the larger status quo and did not disrupt social or industrial relations as technological revolutions have historically done. 

Nevertheless, there has always been a latent demand in India for technologies that don’t just mobilise individuals but also act as “playgrounds”, creating and connecting livelihoods. When management guru Peter Drucker visited post-Emergency India in 1979, Prime Minister Morarji Desai sold him hard on “appropriate technology”. India, Drucker wrote, had switched overnight from championing big steel plants to small bullock carts. Steel created no new jobs outside the factory, and small technologies did not improve livelihoods. Instead, he argued, India ought to look at the automotive industry as an “efficient multiplier” of livelihoods: beyond the manufacturing plant, automobiles would create new sectors altogether in road building and maintenance, traffic control, dealerships, service stations and repair. Drucker also pointed to the transistor as another such technology. Above all, transistors and automobiles connected Indians to one another through information and travel. Drucker noted during his visit that the motor scooter and radio transistor were in great demand in even far-flung corners, a claim that is borne by statistics. These, then were the civic technologies that mattered, ones that created playgrounds in which many could forge their livelihoods. 

The lionisation of jugaad is an attitudinal problem, and may not change immediately. But the task of creating a new generation of civic technologies that act as playgrounds can be addressed more readily.  In fact, it is precisely during crises such as the ongoing COVID-19 pandemic that India acutely requires such platforms.


Consider the post-lockdown task of economic reconstruction in India, which requires targeted policy interventions. Currently, the Indian government is blinkered to address only two categories of actors who need economic assistance: large corporations with their bottom lines at risk, and at the micro-level, individuals whose stand to lose livelihoods. India’s banks will bail out Big Business, while government agencies will train their digital public goods — Aadhaar, UPI, eKYC etc — to offer financial assistance to individuals. This formulaic approach misses out the vast category of SMEs who employ millions, account for nearly 40% of India’s exports, pull in informal businesses into the supply chain and provide critical products to the big industries.

To be sure, the data to identify SMEs (Income Tax Returns/ GSTN/ PAN) exists, as do the digital infrastructure to effect payments and micro-loans. The funds would come not only from government coffers but also through philanthropic efforts that have gained steam in the wake of the pandemic. However, the “playground” needs to be created — a single digital platform that can provide loans, grants or subsidies to SMEs based on specific needs, whether for salaries, utilities or other loan payments. A front-end application would provide any government official information about schemes applied for, and funds disbursed to a given SME.

Civic technologies in India have long been understood to mean small-scale technologies. This is a legacy of history and politics, which policymakers have to reckon with. The civic value of technology does not lie in the extent to which it is localised, but its ability to reach the most vulnerable sections of a stratified society like India’s. The Indian government, no matter how expansive its administrative machinery is, cannot do this on its own. It has to create “playgrounds” — involving banks, cooperative societies, regulators, software developers, startups, data fiduciaries and underwriting modellers — if it intends to make digital technologies meaningful and socially relevant.  

Please Note: A version of this was first published on Business Standard on 17 April 2020

About the author: Arun Mohan Sukumar is a PhD candidate at the Fletcher School, Tufts University, and a volunteer with the non-profit think-tank, iSPIRT. He is currently based in San Francisco. His book, Midnight’s Machines: A Political History of Technology in India, was published by Penguin Random House in 2019

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When one door closes…

An inspiring effort in response to COVID-19

Last Tuesday, for the first time in recorded history, India pulled the emergency brakes on all of the complex interactions that make up the economy and society of 1.3 Billion Indians.

We’re going to see a lot more cascading effects of bringing almost all economic activity to a sudden and near-complete stop. Some of those effects are already visible and others will reveal themselves over time. One thing that’s easy to predict is that this disaster, like most others, will affect Bharat more than it does India.

However, at iSPIRT, we remain impatient optimists for Bharat. It does not suffice for our volunteers to simply predict the future; we want to help create it. When the lockdown hit, we could immediately see that the country’s messy supply chains would be hard-pressed to disentangle essential services from non-essential ones. On the very first day of the lockdown itself, you may have seen videos or news about the police using their lathis on innocent essential service providers like doctors.

This is undeniably tragic, but at its heart is an information and social trust issue inherent in India. When you distil the problem, it comes down to how does the administration identify those travelling for essential-services vs those who are not. Consider this, Swiggy and Zomato alone – who only work on the last mile of one category of food – claim to have a fleet of close to 500,000. For the entire supply chain, even restricted to essential items only, will require authorisations for millions of people and another few million vehicles.

So today, we’re announcing the release of an open-source tool called, ePass. ePass is a tool to help the administration issue digital lockdown passes. These e-Passes are secure and can be verified when needed. iSPIRT got this solution going from zero to launch in less than 4 days. In the following interview, Tanuj Bhojwani speaks with Sudhanshu Shekhar, who led the effort to build the tool and Kamya Chandra, who helped liaison with the Karnataka administration.

Tanuj Bhojwani: Hey Sudhanshu, let’s start with what e-Pass is?

Sudhanshu Shekar: Sure, so the objective is to make sure that those who are on the road providing essential services or regular citizens seeking them can face minimal friction from the authorities.

We imagine a simple 4-step flow

  1. Individuals, such as you or me, or businesses providing essential services, can apply for a pass.
  2. The administration sees these requests digitally, and can authorise them from the backend, either manually or via automated rules.
  3. People can download their digitally signed passes on their devices
  4. The on-ground personnel, such as the police, can verify the curfew pass is valid by scanning it.

We’ve built tools for each part of that flow.

When we started working with the administration, they gave another great suggestion. If the beat officers could provide pre-authenticated “tokens” – like a gift-code, we could make this process even more convenient for some essential service providers. For example, they could distribute tokens to all the informal businesses in a mandi in one go, helping bring the supply-chain back online that much faster.

Tanuj Bhojwani: And you’ve made this open-source. How can a local administration use this?

Kamya Chandra: Everything is a configuration. The administration will have to decide who the approving authorities are. An admin dashboard allows bulk uploads, approvals, tracking statistics of issued passes, etc. It also allows them to configure timings, the validity of the pass, which identity fields are required, etc.

And finally, they have to instruct their beat officers to download the verification app and use it.

Tanuj Bhojwani: so the local government hosts this themselves?

Sudhanshu Shekar: Yes, the governments need to host this themselves, either directly or through a service provider. As iSPIRT, we have only provided the code and will not be providing any managed services. Even the code is open-sourced for others to use and remix as they see fit.

Tanuj Bhojwani: iSPIRT doesn’t work with the Karnataka administration normally, so how did this all happen? How did the team come together?

Sudhanshu Shekar: Sharad called me at 8 pm Tuesday or Wednesday? Maybe it was 8 in the morning. I’m no longer sure. What’s a day anyway? *laughs*

Kamya Chandra: I want to interrupt here and say I am super impressed by Sudhanshu and the rest of the team. No matter how little sleep they got, they didn’t let it affect their judgement or mood. Their decisions were always geared towards what’s the best that’s needed.

Sudhanshu Shekar: Thank you. We’re all just doing what we can.

But basically, on Monday, as Karnataka started enforcing curfew, we realised that people are going to need curfew passes. We started kicking around the idea on Monday, but there was no team. The next night the PM announced a nation-wide lockdown. We knew this was going to be a problem everywhere.

On Wednesday, the Karnataka administration also got in touch with Sharad asking for a similar solution, and they made it clear they need the solution in two days.

Sharad called and said, “I’m going to ask you about something, and you’re going to want to do it, but be really sure and think about it. This is a hard project and has very tight timelines. Everybody will understand if you say no”.

Sharad was right, I did want to do it, so I said yes and immediately got to work. I reached out to several friends and iSPIRT volunteers for help and a few – namely Mayank, Manish, Vibhav, Mohit and Ashok – agreed to help. It was easy to convince everybody, given the importance of fighting COVID. Manish has a few friends in China and was very aware about the seriousness of this situation. We quickly agreed on the basic product outline and started working. Wednesday was a flurry of activity and we got frequent reviews done with the Administration.

We realised we needed an admin console for the police to manage pass issuance. None of us was really an expert in building front-end applications and therefore, I started making calls trying to find an expert. Through referrals, I managed to reach Vishwajeet at 12 pm. I spoke to him about the project, its importance and the strict timelines. I told him we’d fail without him!

Tanuj Bhojwani: So you called a guy you’ve never met and asked him to deliver a complex task, on a ridiculous deadline for no pay nor any certificate or recognition. How did he respond?

Sudhanshu Shekar: He called his office to take a holiday. Vishwajeet sat down, worked for 15 hours straight, and delivered before time!

Kamya Chandra: *laughs* I want to add that this team, which did not know each other, did sleep shifts – including Vishwajeet, who became a volunteer that afternoon. I remember Sudhanshu taking turns with the devs to sleep at night in 2-hour batches just to keep the engine going. I’d run demos with the administration for feedback in the morning, while they all got a little shut-eye. From afternoon, they’d repeat another day and night of development.

Tanuj Bhojwani: Wow, that’s a lot of effort, and what sounds like very little sleep! What was happening on the police end, Kamya? 

Kamya Chandra: Honestly, I went in with a negative impression of the police and administration – because all you see are videos of people being beaten. However, I was very impressed with the few people I was working with. They were very knowledgeable about the challenges they were going to face operationally. Also, it was obvious they were doing their best. The first call I got from them was at 11.45pm!

They made time for our demos, gave excellent, considered feedback on all of it that has definitely helped the product. For example, we added a quick and easy way to verify the ID alongside the QR, so that it can work even if the beat policeman verifying does not have a smartphone.

All of this was happening by a remote team in lockdown. I was in Delhi talking to officers in Karnataka. Other than Sudhanshu, I’ve never met any of the other volunteers! In every other organisation, this kind of a crisis response doesn’t happen as smoothly even if the team knows each other. Anywhere else, it would have been near impossible if the team didn’t know each other.

Tanuj Bhojwani: Oh! I assumed they were all from Bangalore?

Sudhanshu Shekar: No.

 Mayank is in Bundi, a small town in Rajasthan. Kamya is in Delhi. I’m in Indiranagar, Bangalore. Ashok, our design guy, is in Koramangala and Mohit – I have no idea where he stays – I have never met him *everyone laughs*

Kamya Chandra: Knowing everyone’s location is harder, we still don’t know full names! One of the volunteers who helped us test the security of the product was Sasi Ganesan. I spelt his first and last name wrong in the first email I sent to him! He still helped though. On the 4th day of working together, I needed everyone’s last names, I still only knew Sudhanshu’s and Sasi’s!

Compared to the places I’ve worked before, I was surprised to see Pramod send an email with such savage truths. That’s a great example of how radical candour works, why it is in direct opposition to corporate culture.

Tanuj Bhojwani: *laughs* What were the “savage truths” in this email?

Kamya Chandra: To be fair to Pramod, it was more surprising than savage. Pramod said DO NOT GO LIVE (in bold and underline) until security and related aspects weren’t complete. The contents weren’t particularly shocking, but that he sent it to all of us – including people he barely knew. There was no secrecy or pretending to be bigger than we are. All our failures were also publicly available to a team we’ve never worked with before or met. It’s quite a unique experience.

Sudhanshu Shekar: Yeah, we were planning on going live on Friday, and we knew we needed to do security testing before we went live. Pramod’s email was a good one, and all fair asks about security, usability and data retention. He connected us to another iSPIRT volunteer, Sasi Ganesan for help. Ten hours before the scheduled launch, Sasi wrote back with a list of tasks we must do BEFORE we go live. This Thursday night email doubled our todo list. Thankfully, we were able to pull in Bharat, Sireesha and a few others from Thoughtworks to help close these tasks But at the time it felt brutal, we realised this was going to be a very hard few hours.

Kamya Chandra: Yeah, I think this is around the time Rohit started helping us enhance our UX. To me, this email was a clear indication of the high bar every iSPIRT volunteer must meet. Tight timelines or urgent needs are not enough to excuse sloppiness. I am glad we have senior volunteers such as Pramod to keep the bar high.

Tanuj Bhojwani: But I believe this story has a twist?

Kamya Chandra: Well, we did the demos in time, and everyone seemed very impressed. Unfortunately, the Karnataka administration decided to go with someone else. Their decision to go with someone else was disappointing for us.

However, they are policymakers making scale decisions. They probably had to keep many balls in the air and have redundancy. It’s good they have backup plans for backup plans.

They handled it with grace and were very kind about it. They sent a thank you and a commendation letter to each of our volunteers. One of the senior lady officers asked me – do you only take techies? I do not have a computer science degree, but I want to volunteer!

I told her I was an economist too and that she should definitely volunteer.

Sudhanshu Shekar: For me, the toughest part was when I heard the news that our work won’t be going live on Friday like I had promised all these guys. I was really sad. For about an hour, I tried to fight the decision, but then I realised that I would have to do the difficult thing and break the bad news to a bunch of volunteers who’ve slept less than 6 hours total in the last 72 hours.

What happened next is what surprised me the most about this whole thing.

All of them – every single one – took it so well! They all said something to the effect of working on a solution with other volunteers felt better than not working on one and worrying about the lockdown.

I thought this is the end of the line, but it was they who cheered me up and suggested we should open-source it. I was hoping to tell the volunteers to get some rest. Instead, these guys were so passionate that they worked for a couple more days to complete the documentation, which is why we were able to launch ePass today!

Tanuj Bhojwani: Wow. That’s quite a lot of team-spirit for a team that has never even met! So what happens now that this is open-source? How do you expect it will get traction?

Kamya Chandra: The decision to open-source paid off! Even though Karnataka didn’t take ePass, the officers messaged their batchmates and told them about what the volunteers did.

Sudhanshu Shekar: Now, we have demos scheduled with several other state governments as well as a few national ministries. We think this could be live in at least a couple of places soon.

Tanuj Bhojwani: That sounds like a fairy tale ending. Do you have any advice for anyone who is reading this and wants to volunteer?

Kamya Chandra: I used to work at the World Bank in DC, and we were trying to implement national-level digital systems in many countries. When we had technical challenges there, I was often told to get on a video call with iSPIRT volunteers for guidance and inputs. The more I interacted with them, the more I realised there is magic here to learn from. So I gave up my diplomatic passport and got on a plane to Bangalore!

So my advice is that you should try volunteering even if you’re many, many oceans away!

Sudhanshu Shekar: *laughs* I have a more straightforward test than Kamya’s for those who want to volunteer. These are also the three reasons I volunteer.

First, Societal Impact. You feel useful because you get to work on something that genuinely helps people.

Second, exposure to a wide variety of topics – such a different set of problems – you don’t exactly stick to your lane. Hence, you also meet people with very diverse backgrounds and work experiences. Because my peers are not age-bracketed with me, I feel like there are many lessons that I usually would’ve learned in ten years of my career, I’ve learned already at iSPIRT. 

Third, you draw energy from others’ passion. It’s just amazing to go to work with people like this every day. I’ve realised iSPIRT is a self-selecting group – it’s only the people who seek to find it, find it. It is not easy to be a volunteer, because the environment is open and the volunteers are self-driven, people will clearly be able to see if you can walk the talk. When you have people respected in a system not for who they are, but what they do, it is magical for everyone.

Tanuj Bhojwani: That is very true. Thank you for the chat!

Like Sudhanshu says, Volunteering at iSPIRT is hard and definitely not for everyone. However, if one or more of these reasons resonate with you, you should read the volunteers handbook to learn more about balloon volunteering.

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R&D Revolution from Rural India – Rendezvous with Vembu

When constellation research published the best award for enterprise software to Zoho, I was thinking its yet another Silicon Valley startup that is kind of making some mark. But I was really surprised and it was a bit of a shame when I found out that its an Indian company – how could I have missed such a company that originated and grew from my home city and now fast becoming a saas Boomi – Chennai.

As I dig deep into this Enterprise software company, I come across more surprises, about its mission, vision, purpose and its founder. Now fascinated by watching an interview and a speech of Sridhar Vembu, the founder – it was a pleasure to meet him in Tenkasi, Tamil nadu, and this post is a rendezvous with Sridhar Vembu, and a few key takeaways from my day at Zoho, Tenkasi.

In front of Zoho, Tenkasi office with Sridhar Vembu

Rural and Semi-Urban revolution: Sridhar believes in economic development around small towns and semi-urban areas. We discussed SAP in Waldorf, and how that village became a global HQ of the German giant. With bandwidth and technology, Sridhar really believes that he would get Zoho products designed, built and supported by small towns. Tenkasi, a small town in Tamil Nadu houses Zoho’s development and Labs with about 500+ people. It was heartening to see an end-to-end product Zoho desk built and managed right from there – I even met with the product managers there who build and take these products to global markets. Other parallel examples that we have for such a non-urban revolution were Jamshedpur and BHEL townships, which housed and build excellence from small towns. Glad we are doing this for product software as well now.

Skill oriented education: Now while the rural revolution looks interesting, how will the software talent that is usually US bound, join such remote places. Sridhar’s answer to this is Zoho University. Zoho University is a unique education, follow a gurukul Indian approach, where students are pulled from government schools, and trained into important technical skills, English and Maths, Design skills, as well as business skills.I had some great discussions with Anand Ramachandran, who heads Zoho University in Tenkasi. Zoho University now contributes to more than 20% of the 8,000+ employees in Zoho, and it’s heartening to see students from villages, Tamil medium government schools very effectively groomed to build world-class products. The analogy I have for this kind of education is chartered accountancy, which combines knowledge and hands-on skills together. But this takes it to the next level.

Price sensitive products: One of the big benefits of the above focus helps Zoho come out with very price-sensitive products. Products are priced at a level that is affordable for any size business, most importantly SMBs, both for developed and emerging markets. The goal of Zoho seems to be like that of Amazon, where they offer superior products, better customer service at decreasing prices, by bringing productivity, as well as the product revolution from rural and skill-based talent.

R&D in India: Sridhar Vembu is a big fan of Japan and Germany. We spoke about several examples of how products from these countries make it to our country – up to our villages. Products such as the knife that is used to cut coconuts, motors that go into our pump sets, glasses that go into spectacles. This is such an important element he highlights that we have to go to the core of what we make, we should really get our engineers to build products – research and development from India, not just assemble. Zoho has that clear focus, going and building out the core platform, based on which its applications are built. It’s not only Make In India but R&D In India. Sridhar also highlighted that its also important for lot of Indians to stay back in the country, instead of migrating to US or other countries. Each one of them can create huge value, employment and make India proud by making products out of here.

Bootstrapped to date: Another area that was important and make all the above mission happen is the fact that Zoho is completely bootstrapped, and its till now not funded by VCs. Like many large software enterprise giants, Zoho is built ground-up bootstrapped and grew by investing back the surplus. This gives them a lot of freedom, freedom to run their endeavors and also with a long term view. It’s great learning for a lot of startup entrepreneurs. They are more of a revenue unicorn than a market cap unicorn.

In summary, what Sridhar Vembu has created and grown is a fascinating story, a story that we need to celebrate, learn and cherish, its more powerful than the stories of Indians who have done this abroad. For me, it was huge learning on Engineering, Economics & Education, it was one of the memorable day of my life!  

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Union Budget 2020: A Good Start That Needs Swift and Decisive Action


 “Words can inspire but only action creates real change.” 

Presenting the second Union Budget, the Finance Minister asserted that entrepreneurship has always been the strength of India and proposed a number of measures and policy changes to help boost the Indian startups. The Budget was a step in the right direction, but these are just baby steps for an economy that needs giant leaps to become an innovation hub. 

We are also hopeful that the investment clearance and advisory cell will go a long way in strengthening the startup environment and improve the ease of doing business within our community. The proposed 5-year deferment of tax payments on ESOPs by startup employees in the Union Budget, we believe, is a step in the right direction. However, it does not satisfactorily address the complete concerns and other pain points that have been plaguing the startup ecosystem. 

Firstly, the ESOP taxation change, in its current form, applies only to around 200 startups recognised by the IMB (Inter-Ministerial Board), thereby, severely restricting its scope. It is only fair that all DPIIT-registered startups enjoy the benefits of the proposed changes equally. Secondly, we strongly believe that ESOP taxation must be revised as per global norms, else, it would become an ineffective tool of talent acquisition and retention. 

We also require cohesive measures towards improving the ease of doing business and strengthening the overall ecosystem. To ease the working capital crunch faced by startups, a lowering of TDS rates on payments to DPIIT registered startups and MSMEs is necessary. To enable greater rupee capital participation, allowing universities and public trusts to invest in Alternative Investment Funds (AIF) will make a considerable impact. Achieving tax parity between listed and unlisted securities, which at present vary significantly, will enable startups to attract greater investments. The provision of R&D benefits for companies will help spur innovation and startup activity in India, enabling a structural shift in the economy towards building high-value capabilities. 

We believe that more cross-cutting measures across industries are necessary and so is the reduction of frictions between the businesses and government players. This will help us to cover more ground in fulfilling the mission of making India a high-value, innovation economy. 

Overall, Union Budget 2020 does reflect the Government’s keenness in improving the ease of doing business but considering that the lofty goals we have set out to achieve, good intentions and keenness do not suffice. These must be augmented with robust policy changes, as well as, swift and decisive action to strengthen and accelerate the startup ecosystem. 

India is at a crossroads and must decide how she is going to traverse the next decade and champion the change the world needs. It reminds one of Robert Frost, “Somewhere ages and ages hence:

Two roads diverged in a wood, and I—I took the one less travelled by,

And that has made all the difference”