I posted this on CIIE@IIM Ahmedabad's blog recently.
A recent blog on Forbes India paints a grim picture about building sustainable businesses in the water sector in India. It outlines three major challenges. First, very low or no pricing of water, challenges in partnering with government and local bodies and business models that don’t incorporate long term maintenance and management of water systems. Let us consider them individually.
Where should entrepreneurs focus their energies?
The problem of pricing water is a policy intervention and gets more complicated since water is a state subject in the Constitution. That means that water policies wary state to state. Since policy changes usually follow examples of success engendered by similar enabling policies elsewhere, what we really need in the country are such counterfactuals that can be used to build a case for more prudent policies.
Given that policy change is a long term game and one entrepreneurs do not have direct control over, it is better they focus on the other two challenges. The second significant challenge for a water startup is to build a partnership with the government and local bodies. This condition is paramount in order to scale a water business in India. The government has a touch point with almost every citizen and can be a great scaling partner. However, this is like saying a dragon is the best way to fly if only you can put a harness and a saddle around its fire-breathing neck.
Who can be the saviour?
This is where water sector startups need institutional support. First, governments should be ready to open themselves to innovative solutions and second, we need organisations that can create an “API” to this governmental operating system to which the most innovative companies can easily link their services and leverage the entire menu of functionalities of this system. Institutions such as the IITs and IIMs etc. are primed for this job through state supported incubators such as CIIE. They have the requisite credibility and capacity to bridge this gap by identifying and fostering innovation in the critical sectors of the economy and striking the right partnerships with the State as a proxy or intermediary for these innovative companies.
This approach can also limit the risk for the government to manageable levels creating an environment for experimentation with the most scope for success.
Finally, since CIIE is an incubator, they are poised to help tweak, massage, break and rebuild business models for these startups so that they incorporate water system maintenance, community engagement and technology relevance making them much more robust in the process. This could overcome the third major challenge facing water startups in India today.
A knight in shining armour approaches.
Now for the best news. Such efforts are already underway. CIIE has been in discussions with the Rajasthan government on such a collaboration where the State will award pilots to some of the most promising water startups to solve the most trenchant water problems facing Rajasthan. The program is about to be launched later this month. This would be the first of its kind in the country and offers an incredible opportunity for water startups to launch in Rajasthan. This could be the beginning of a model that can revolutionise the Indian water sector.