1. The Fortune for the Bottom of Pyramid : PURA – A Template in PPP for Sustainable and Inclusive Growth of Rural India
By:
Dr.D.S.Gangwar IAS
Joint Secretary
Ministry of Rural Development
Government of India

2. India lives in its villages
"The true India is to be found not in its few cities, but in its seven hundred thousand villages. If the villages perish, India will perish too." Mahatma Gandhi

3. Outline of the Presentation
SECTION 1 : Laying the Foundations for Sustainable and Inclusive growth
SECTION 2: Co-creating Fortune for the Bottom of Pyramid  PURA

4. Laying the Foundations for Sustainable and Inclusive Growth
SECTION 1:
Laying the Foundations for Sustainable and Inclusive Growth

5. Mission of Min. of RD
Our Mission
Sustainable and inclusive growth of rural India through a multi-pronged strategy for eradication of poverty and improvement of quality of life in rural India.

6. Our Theory of Change: The Multi-pronged Strategy
EMPLOYMENT GENERATION :
Direct attack on Poverty by providing livelihood opportunities to Below-Poverty Line (BPL) households.
Enhancement of livelihood security by guaranteeing 100 days of wage employment to every household in a year
INFRASTRUCTURE DEVELOPMENT:
All-weather road connectivity to unconnected rural habitations and up gradation of existing roads.
Providing basic needs and amenities like housing, drinking water and sanitation to rural households.
SOCIAL SECURITY:
Providing Social assistance to the elderly, widow and disabled persons.
SUSTAINABLE DEVELOPMENT OF NATURAL RESOURCES :
Natural resource development for strengthening the livelihood base of the poor

7. National Level Implementation of the Programmes
Department of Rural Development
Formulates policies and programmes
Provide funds
State Governments
Implementation through its agencies
- Monitoring of Programmes
District Administration
Preparation of district perspective plans
Implementation of the programmes
Panchayati Raj Institutions
Plan at the grass root level
Select works/beneficiaries and implement the projects
INDIA
35 States/UTs
619 Districts
6484 Blocks
2,55,000 Village Panchayats
villages
7,42, Rural Populn (2001)
million BPL Households

8. An iIllustration of investments in a typical village of 1000 population
Guarantee of 100 days manual work in an year to all the households
All-weather road connectivity
Investments for increasing land productivity:
watershed development, water harvesting ponds, check-dams and field channels, social forestry
Organization of BPL persons into Self-Help Groups’ Micro- enterprises:
assistance for finance, technology, skills training and marketing of produce
Placement linked skills development project
Houses for homeless BPL persons
Land/homestead for landless persons
Drinking water supply and sanitation latrines
Social Safety Net : Pension for elderly, widows and disabled persons

9. Major programmes of other ministries for rural areas
Bharat Nirman for rural infrastruture (US$ billion)
Agriculture and allied sectors e.g. dairy, poultry, fisheries; Minimum Support Prices for procurement
Public Distribution System
Promotion of handlooms, handicrafts, food processing and village industries;
Education: Sarva Shiksha Abhiyan (Education for All), Mid-day Meal scheme in schools;
Health: National Rural Health Mission (US$ 3 billion)
Rural Electrification
Banks: Credit and Debt-waiver for farmers (US$ billion ),
IT: Common Service Centers -1,00,000

10. Impact Analysis

11. Impact Analysis Rural demand - the driver of economic growth in India:
Major structural shift taking place in rural economy: Contribution to rural household income:-
from agriculture- 43%
from services %,
from industry %.
By 2017, Rural economy is estimated to surpass urban market

12. SECTION 2: Co-creating the Fortune for the Bottom of Pyramid (BOP)PURA

13. Need for a paradigm shift : Financial Capitalism  Inclusive Capitalism
“ Why is it that with all our technology, managerial know-how, and investment capacity, we are unable to make even a minor contribution to the problem of pervasive global poverty and disenfranchisement? Why can’t we create inclusive capitalism?”
- C.K. Prahalad
(The Fortune at the Bottom of The Pyramid)

14. Co-creating the Fortune for the Bottom of Pyramid (BOP)
Rural economy is estimated to increase from $220 billion in to about $425 billion in at a CAGR of 12%.
The next stage in economic evolution of Rural India:
Wealth creation for the BOP
The challenge is how to design a system for involving the private sector for rural development and enabling dignity and choice through Markets.

15. Co-creating the Fortune for the Bottom of Pyramid (BOP)
A. Initiatives in the Private - Private sphere:
Innovations in the business models for BOP
B. Initiatives in the Public- Private sphere:
Public-Private-Partnership (PPP) for infrastructure creation and provision of services in rural areas.
Common Services Centres by Min. of IT
National Rural Livelihood Mission (MoRD)
PURA- (MoRD)

16. A. Initiatives in the Private- Private sphere:
Case studies abound of innovations in the BOP business models, technology, products and services:
Amul business model of co-operatives network as a firm
ITC e-Choupal
HUL Shakti women village entrepreneur
Tata Kisan Kendra
DCM Shriram Hariyali Kisaan Bazaar
SEWA (Self Employed Women’s Association)
BASIX

17. B. Initiatives in the Public- Private sphere:
1. Common Services Centres (CSCs)
100,000 Common Services Centers in 600,000 villages.
Objective: to develop a platform that can enable Government, private and social sector organizations to align their social and commercial goals for the benefit of the rural population in the remotest corners of the country through a combination of IT-based as well as non-IT- based services.
Total cost of Rs 5742 Cr. over 4 years
Implementation through a Public Private Partnership (PPP) in a 3-tier structure:-
the CSC operator (Village Level Entrepreneur or VLE);
Service Centre Agency (SCA), responsible for a division of CSCs;
State Designated Agency (SDA) for managing the implementation over the entire State.
SREI Sahaj e-Village Ltd.: 15,000 CSCs in 6 states provide G2C & B2C services through village entrepreneurs

18. B. Initiatives in the Public- Private sphere:
2. National Rural Livelihood Mission (NRLM)
Universal coverage of BPL families under Self Help Group (SHG) network
Formation of Community Based Organisations (CBOs) and their federations
Rural Self Employment Training Institute (RSETIs) in every district in partnership with banks
Linkages of SHGs’ micro-enterprises with Corporates
Placement-linked skills development through partnership with private players

19. B. Initiatives in the Public- Private sphere:
The PURA Scheme – A Template in PPP for Sustainable and Inclusive Growth of Rural India

20. “Knowledge Powered PURA
VISION OF PURA : President Dr. Abdul Kalam's address on the eve of Republic Day
“Knowledge Powered PURA
The vision of transformation to a ‘developed’ India can only be realized if we launch a mega mission for empowering the rural people. 
Creation of Physical, electronic and knowledge connectivities leading to economic connectivity in villages. Such a model of establishing a circular connectivity among the rural village complexes will accelerate rural development process by empowerment.
The PURA has to be a business proposition economically viable and managed by entrepreneurs, local people and small scale industrialists.
Government’s support should be in the form of empowering such management agencies, providing initial economic support and finding the right type of management structure and leaders to manage and maintain. ” 20 20

21. The ecosystem for wealth-creation in rural areas
Micro-consumer/Micro-producer/Micro-innovator
in villages
Physical
Connectivity
Physical
Connectivity
Physical
Connectivity
Financial
Connectivity
Financial
Connectivity
Financial
Connectivity
Information / Knowledge
Connectivity
Information / Knowledge
Connectivity
Rural Entrepreneurs
Economic Connectivity with formal economy:
A network of market-based business system
Fortune for the Bottom of Pyramid

22. PURA Mission Statement
“Holistic and accelerated development of compact areas around a potential growth centre in a Panchayat (or group of Panchayats) through Public Private Partnership (PPP) by providing livelihood opportunities and urban amenities to improve the quality of life in rural areas.” 22 22

23. PURA Strategy Implementation of the scheme through PPP
PPP between Gram Panchayat (GP) and Private Sector partner
Core funding from PURA scheme of MoRD
Additional support through convergence of Central Govt Schemes
Private sector to bring in investment and operational expertise
Project based and risk sharing among stakeholders
Twinning of rural infrastructure development with economic activities generation 23 23

24. Urban Amenities to be provided under PURA
Under MoRD Schemes:-
Water and Sewerage
Village streets
Drainage
Solid Waste Mgt
Skill Development
Development of Economic Activity
Under Non MoRD Schemes:-
Village Street Lighting
Telecom
Electricity distribution, etc.
Add-on Projects i.e. Revenue earning projects (Indicative) :-
Village linked Tourism
Integrated Rural Hub, Rural Market
Agri – Common Services Centre, etc .
Any other rural economy based project
Schemes such as SGSY, NRDWP, TSC, etc will be converged in CAPEX provision of PURA 24 24

25. The Business Model
Leveraging public funds with private capital & management for creation & maintenance of rural infrastructure.
Due to thin revenue base, most of the CAPEX from Govt schemes.
Community Development schemes ordinarily included.
O&M of assets and services for 10 years.
Private Developer to have flexibility in choosing PURA project area & revenue generating projects as add-ons.
Capital Grant upto 35% of project cost for meeting viability gap.
Cost of each PURA project upto Rs. 120 crores.
Actual Capital Grant to vary from project to project. 25

26. Land for the PURA Projects
For the public amenities, Gram Panchayat / State Govt to provide land free of cost.
For the Add-on activities:
Revenue sharing between GP and Private Partner if land provided by GP / State Govt.
Such add-on facilities to revert back to GP / State Govt at the end of concession period.
In case the private developer has to purchase the land from open market, cost of land not to be included for the estimation of capital grant. 26

27. State Support Agreement
Tripartite Agreement between Central Govt, State Govt and Private Developer.
Support from the State to include:
Co-operation and facilitating the Concessionaire and GP in discharging their obligations under the Concession Agreement
Commitment for core facilities like roads, water and power to the PURA area
Providing access to the site required for project
Assist and facilitate in obtaining approvals and clearances required for implementing the project
To waive its sovereign immunity

28. Concession Agreement … 1
Between GP and Private Developer. Will include minimum service level standards, performance guarantees etc.
Concessionaire to procure, finance, improve and undertake design, engineer, construct, redevelop, operate & maintain project facilities at its cost during concession period
Concession period 13 years (including construction period)
Concessionaire to complete construction within 3 years as per the pre-determined project milestone schedule
Access and license to the land for the urban amenities to be provided by GP and at its discretion may provide land for the add-on facilities.
All urban amenities and those add-on facilities for which the land is provided by GP to be transferred to GP on termination/expiry.

29. Concession Agreement … 2
Concessionaire would have the right to collect user charges from the users of add-on facilities.
Grant to be disbursed to the Concessionaire through an Escrow Account set up for the same at DRDA
Concessionaire would also be eligible to utilize the funds available under other existing MoRD schemes and on tap from other Ministry schemes
Dispute if any to be settled as per alternate dispute resolution mechanism agreed between the parties

30. Monitoring & Evaluation
Concept Plan & DPR
Screening Committee at MoRD for reviewing the Concept Plan & DPR prepared by the developers
Baseline information provided in the DPR shall be vetted by the Independent Engineer whose cost shall be financed under PURA
Construction and O&M
Independent Engineer shall supervise & monitor activities and performance of developer during project life cycle:
Check for compliance of performance standards set out in the Concession Agreement – delay/ quality
GP would also monitor the performance of the private developer during the Concession Period

31. An Indicative PURA Project …31 31 31

32. The Selection Process Through open competitive bidding process.
Expression of Interest from reputed Infrastructure Companies.
No financial bidding for pilots; evaluation based on technical capability and pre-approved evaluation methodology.
Short listed bidders to be invited to pre-bid conference.
Emphasis on rural development priorities as well as developers perspective on an economically viable project.
DPR to form the basis of determining capital grant admissible. To be vetted by Independent Engineer.
Inter Ministerial approval committee to approve final cost and capital grant. 32 32

33. Implementation Framework
Issue of Expression of Interest
Preparation of DPRs by private developers and approval by MoRD
Pre-bid Meeting / Bidder’s Conference to obtain suggestions on the draft RfP & CA from those Bidders who meet the qualification criteria.
Execution of contracts between the private developers and participating Gram Panchayats and State Support Agreement
Issue of Request for Proposal document
Project Execution by private developer
Submission of Proposals including a broad Concept Plan from interested Bidders
O&M of Project facilities by private developer
Evaluation of Proposals by MoRD / Technical Committee
Handover of Project facilities to the Gram Panchayats at the end of the Concession Period
Issue of “Letter of Award” to first eight private developers for preparation of DPRs 33

34. Next Steps… Scheme Guidelines have been issued
Notice for Expression of Interest issued.
Commencement of the selection process for private sector partners.
Preparation and approval of DPRs
Signing of SSA and CA
Scaling up after experience of pilot phase 34 34

35. 35 35 35

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