 1) Mobile Money: The government wants to reach up to the last man but irony is banks are not able to. The current banking model is unsuitable to cover everyone due to problems like connectivity, awareness, population dispersion and lack of incentives for banks. On the other side, government is increasing its subsidies and wants to reach it to the poor with minimizing problems like corruption. So Government is mulling to start Cash Transfer Method. For this, everyone should have savings account. So government asked banks to start no frills accounts for poor but banks are not enthusiastic due to low ROI. So Mr. Tilotia proposed to use concept of Mobile Money. Under this plan, retail stores will act as agents to deposit or withdraw money and Mobile phone will be used for remittance. He gave examples like EKO who are using this subject. As mobile penetration is very high across all demography, this will help for overall financial inclusion. 2) Agriculture: According to Mr. Tilotia, the current state of Indian agriculture industry is pathetic with return on capital invested between -3 to 3%. There is huge scope of improving productivity. Government focus on rural India is increasing with schemes like NREGA. But NREGA is taking agriculture labor away leading to more mechanization. Also, use of hybrid seeds is increasing. The problems of agriculture industry are scarce storage space, bad logistics and wastage. Mr. Tilotia provided some interesting solutions for this industry. He talked about possibility of converting warehouse receipts into financial instruments. As rich India wants more and more fruits and vegetables, he advised that farmers should increase fruits and vegetables and increase their profits. 3) Water: Mr. Tilotia said that water industry in India is worth of US $30 billion. Though we tend to think that supply is scarce, it is not so. Numbers prove that supply is plentiful. Water is consumed primarily in Agriculture, Residential and Industrial sectors with Agriculture being biggest consumer. The current consumption is 800 Bn Cubic Mtr which is expected to grow to 1100 Bn Cubic Mtr by 2025, and current rainfall accounts to 4000 Bn Cubic Mtr. This implies that there is no enough capacity to store the water. At the same time, ground water consumption is increasing faster than surface water. The city water distribution is completely mess. Only one third of water reaches the recipients in the cities. The aggregate tariff is Rs. 4.9 per Cubic Meter which is very low and this is forcing water services to work below operating cost. Mr. Tilotia pointed to two opportunities rising from this scenario, one in water distribution system and other in water meter production industry. He cited examples of Veolia Water in Nagpur in distribution business and Chetus Water Meters in Pune. 4) Household Savings: Mr. Tilotia said that cumulative Household Savings will reach to US $ 10 trillion by 2025 from current US $ 2 trillion. Currently major chunk of it is in bank deposits or gold. With increasing GDP, the Household Savings will cover shares, debentures, insurance funds, pension funds etc. Longer life expectancy will lead to choose riskier products. So we can expect surge in new and innovative financial products. This will not only increase financial services jobs but also lead to growth across the board with more money being available for development projects. |
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