Filling the gap one brick, one hospital bed at a time
Two stories this week stand out as examples of how entrepreneurs in India are doing what the government and the private sector have largely failed to do.
One is on housing, the other on healthcare, hot-button topics in India, which is struggling to house and heal its 1.1 billion population even as it gallops toward double-digit growth.
Various state governments and real estate firms have made lofty promises of “affordable housing”, but few have delivered.
One man is determined to show he can. Entrepreneur Jaithirth “Jerry” Rao, who headed software firm MphasiS, this week launched a project in Bangalore to build 1,900 homes that will be priced at 450,000 – 1 million rupees (roughly $9,500 – $21,000) each.
Rao’s Value and Budget Housing Corp – floated with a former Citibank colleague – will use lightweight aluminium beams and cast-on-site technology to cut costs.
Top mortgage lender HDFC will provide housing finance for the project, which will be replicated in cities including Chennai, Hyderabad, Pune, the NCR and Navi Mumbai, which are more often in the news for luxury residential projects looking to outdo Dubai.
Rao’s project comes on the heels of a similar one launched by entrepreneur Ramesh Ramanathan’s Janaadhar Constructions, which is building more than 500 homes priced at 500,000 rupees or less.
A similar model of professionals coming together to start a venture — this time for affordable healthcare — was also in the news this week.
A team that includes the former chairman of the Securities and Exchange Board, a former CEO of IL&FS and a former civil servant plans to set up a rural hospital network of about 2,000 hospitals to provide primary and secondary care at less than what rural Indians pay today, just over 1,000 rupees a year.
These initiatives are impressive not just in that they are largely born of the dreams and ambitions of one person or a group of not-so wealthy individuals determined to make a change.
They also address obvious, pressing needs.
A lack of affordable housing means India has the largest urban slum population in Asia; Mumbai for instance, boasts some of the priciest real estate in the world but 60 percent of its residents are homeless or live in slums.
Similarly, while India is a desired destination for medical tourism for expensive cosmetic surgeries, it has just 0.7 hospital beds and 0.6 doctors per 1,000 people, well below the world average.
With an estimated shortfall of some 20 million urban housing units and a healthcare system that falls short of meeting even basic demand, initiatives like these are perhaps just a drop in the ocean.
But they are a start, nevertheless.