€500 house sounds like they are monetising the construction of future slums / shanty towns.
The Indian government need to get their act together and not leave it up to the private companies to clean up the mess in India. I have spent time in Delhi and what I have seen is shocking. Private companies run taxi services for their workers because it is so unsafe and the government run services are so unreliable that they are left with no other option.
The major commercial districts are built with private money and thus you see great big modern buildings with dusty and potholed roads without any paths connecting them so stepping outside the campus of these buildings you go from 1st world to 3rd world in a matter of a few steps.
There is more to making someones life livable than simply constructing four walls with a roof and some windows. You need to implement proper sanitation and other fundamental facilities such as appropriate policing and transportation. without these you are just fueling the growth of these slums and the internal migration from the countryside into the cities.
I can see India with an incredible future and rapid growth if simply the corruption and mismanagement is sorted out in the government sector.
And so it starts. A decade or two after opening up the economy, Indian companies have started moving up the value chain, creating solutions to local problems instead of mindlessly building things designed elsewhere. Great to see this happen in my lifetime.
Tata seems to relish creating products for the bottom of the pyramid that no other corporation will touch. What they are doing reaffirms my faith in capitalism.
I think this is more because of Ratan Tata's philanthropic nature. He is the best of the current breed of industrialists in the country though it is still sad that the richest Indians (Mittal might be an exception) inherited their V.C money (and got a lot of it actually).
The article mentions that these homes are targeted at the beneficiaries of the Indira Awaas Yojana - a government subsidy program. The article also mentions that other companies are going after the same market (with limited success).
Actually there were quite a few companies trying to make a sub $2000 car but only the tatas succeeded albeit at a slightly higher price.
Yes there is a government subsidy for the lowest cost home but in India relying on the government keeping the same policy for more than 4 years is a little insane.
That might be true but having to deal with the government is a painful path. And anyway there is a real risk that they can't actually engineer it so cheap like the nano. But as in the nano's case it'll help a whole bunch of people with low incomes.
And since other companies have failed at this, I still think it's very entrepreneurial and ballsy to attack this problem.
In the end, it behaved as you might expect. The rank changed rapidly in the last hours as people motivated their social networks. Also, designs with the prettiest pictures dominated and several were hopelessly over budget.
On the other hand, there were a number of really interesting designs. It's worthwhile to read through the submissions if you are interested in inexpensive housing.
The Tatas have consistently impressed me. They're like Andrew Carnegie of India. The patriarch Jamsetji Tata (http://en.wikipedia.org/wiki/Jamsetji_Tata) help setup the Indian Institute of Science (it is so intimately connected that in local parlance it is often referred to as the Tata Institute) and TIFR both of which are premier research institutions in India. Another Tata, JRD Tata is the most well known though and helped grow and diversify the Tata industry in the 20th century. (http://en.wikipedia.org/wiki/J._R._D._Tata)
For those unfamiliar the Tata industry is better compared to GE than Google in terms of its diversification. They are involved in the energy, IT, automotive, steel, and I'm sure a whole bunch of other sectors.
It's unfortunate that I see similar behavior for all stratas of upper and upper-middle class. In my community it's almost a norm to spend at least half a million for the whole wedding affair. Weddings offer a dozen or so cuisine or sub cuisine types, and in some cases I have seen fireworks as elaborate as some 4th of July celebrations. It's even more unfortunate that we as a society do not have any type of popular counter-culture or even a counter point. It's all a blind race to the moral bottom. Sorry for going a bit off topic.
As with most things coming out of India, I would take this with a grain of salt. There've been promises of things like a $10 laptop and a $35 tablet in the past. When (if ever) they actually materialized, however, the price was either much higher or the quality/features much lower than promised.
Relatedly, this is a big difference between India and China. In China, when the CPC decides to do something, it happens, no matter how many heads roll in the process. One of India's biggest failures has been its inability to keep up with its promises.
In China, when the CPC decides to do something, it happens, no matter how many heads roll in the process.
Sadly, 'heads rolling' is closer to the truth than you probably meant. Human rights abuses of workers working on state-sponsored public-facing projects is common. :/
Oh, I meant it in the most literal sense possible. It is not possible to achieve the kind of breakneck-pace modernization that has taken place over the last ~30 years in a country as large and diverse as China without a very centralized, authoritarian government that doesn't fuck around.
The reason why Japan (and Taiwan and South Korea, to a lesser extent) was able to modernize at a similar rate from ~1950-1990 was because of its ethnic and cultural homogeneity. They technically have a democracy, but everyone is so alike that, in practice, the same political party (the LDP) stayed in power for that entire period. There is no way in hell that a similar situation could occur in China.
China's modernization has no doubt come at a terrible price, albeit one that Americans, as a democratic and (supposedly) just country, are able to ignore thanks to our ability to collectively ignore the cognitive dissonance.
There is a difference between Indian companies and Indian government. Indian government is full of failures. Indian companies a little better. Tatas developed $2500 car. Tatas developed $15 water purifier that does not need electricity or expensive refills.
Consider that if you eliminate building codes, sealed windows, and the need for thermal insulation a "house" is trivial and could be made with anything from cement to adobe to some sort of lighter and stronger version of adobe made with modern materials.
I visited some houses in Costa Rica that were cinder block structures with corrugated roofs and wide bars for windows (to prevent thieves but not geckos) and these were very comfortable. Materials and construction costs couldn't have amounted to much.
I've been designing a small cheap house which I plan to build spring 2012 (after I get through the year long political process). It has become undeniably clear that building codes in most of the US result in a base cost for a house at at least 20-30k (rural mid-west prices). The laws were designed to keep landlords from renting 'inhumane' conditions, but they are applied even to those building and living in their own homes. In my town, we aren't legally allowed to have multiple homes share a kitchen and bathroom. Kitchens can only be shared by 3 adults. We can't use filtered rain water in our sinks. We can't flush our toilets with shower water (or anything other than potable drinking water). A friend of mine from India says that where he lived it was against code to flush toilets with drinking water.
To be honest, $10 laptop or $35 tablet; were Govt. funded organizations fighting for some limelight.When some politician appeared on news channels with a prototype, you know where the project was going.
This is more of Tatas attempt to fix things, but unlike Nano Car project, govt. does have some involvement here, so I am not holding my breadth.
And yeah like it or not, it is good that Govt stops if something is not popular. Thank god for that.
> In China, when the CPC decides to do something, it happens, no matter how many heads roll in the process.
You say that, but China's government is in some ways no better than India's. Take a look at the high profile, recently opened Beijing-Shanghai high speed railway - which has already had several power malfunctions in the last two weeks. [1] The CPC has its own corruption and problems as well - they're just not as obvious as India's.
Seems like this could have significant positive consequences in many regions. Good on them. I don't know how the land would work for many of these homes but I take it India's not as onerous as most of Europe where the price of the land and permissions to build is usually far higher than the cost of the house itself..
Actually its very oddly distributed in India. Being all economy centered in cities, it depends where land is located. Land is very cheap in rural areas but highest valued in cities like mumbai, delhi. In fact land in mumbai has become most expensive in the world now a days.
Though I appreciate their efforts on this(this is the same company who did the nano), it would be interesting to see their solutions for the hot climate in India.
A mobile home could be built within that cost in India, lets say like a trailer in the US, but I wonder if anyone can live inside a pressure cooker in the hot climate. The air-conditioning alone would cost a significant amount, not to mention electricity, while a mud hut provides a better solution for the extreme hot climate. Though if it is successful, would change the landscape.
I have come across some very safe, efficient, and cheap building designs that I would love to build on some land. In the U.S., it is very hard to go through all the paperwork to get it built. If I had someone put a rickety frame in the ground and slap on some drywall, it would be easy as pie to get the paperwork done.
The U.S. building code seems broken from my perspective. Cheap homes are not hard.
I built a strawbale house in 1998. Cost of the strawbales was about $1000, and the cost of the rest of the house was another $85,000..... it was 1400 sqft. Amazing how much the rest of the "necessities" cost.
The house had 2000 ft of CAT-5 in it, about 1000 ft of co-ax.
A search for "Euro 500 house" on G.Images returns a bunch of stock photo images of 3 actual 500 Euro notes bent into a house. Something weird (good weird) about realising the same amount of money could potentially house 3 families.
As a side note, does anyone have links to images of what the completed homes look like?
Price of Land = Value of Developed Parcel To User - Cost of Construction - Legal and Government costs - Any other costs during the development or after the development including Time value of money of property taxes.
This equation holds true in the US, and should hold true in India. The reason for US subsidies is that sometimes, the right side of the equation is still negative because the value to the end user is so low (think section 8 where tenants only have $500/month or less to rent housing, feed their family etc.)
Building a $500 house will only be beneficial to people if the right side of the equation has a value less than 0. If the value of the right hand side of the equation is greater than 0 then the land value simply goes up.
The problem with these projects Tata is taking up is that by tying to gain some press out of these its making these unusable. The cheapest car was advertized as such a lot and so there was a stigma of sorts associated with it. At the end of the day it was not that inexpensive (with added/needed features) but by Nano is now branded as car for the poor and so people are not inclined to buy it.
To add to what you are saying, the problem with the Nano was that it was addressed at a market where the average buyer will look at all options available. A car is not a "life necessity" and that alone puts the prospective buyer in a different class. This means that the Nano competes with the other offerings on the market rather than being a separate market unto itself. The Tatas envisaged a separate market developing around the product, which didn't happen, and hence the low sale numbers. What they might want to do is try and "create" the segment they want. How they do it is entirely up to their marketing team, although being a marketeer I might be able to think some ideas up as well.
The Nano stigma you talk about was the average car buyer looking at it and thinking, "That is a terrible car." Wrong audience. But I can understand why they did it though. As a car manufacturer trying out new things, their marketing did tend to see it as a "car market" problem -- hammer, meet nail.
Housing on the other hand is a "life necessity." If the houses Tata is promising are able to deliver on quality, security, repairabilty, and temperature issues, you might have a winner. It will also have to withstand the endless jugaads people are going to subject it to in cramped urban spaces.
On the other hand despite Tata's tall claims, it's difficult to see their marketing team do much about it. I don't see Tata Swach ubiquitously in shops here, nor do they respond to inquiries about their solar cells (I tried). Beyond the brochures and the websites, it's difficult to get Tata to respond to you. This makes most of these announcements pointless.
As an Indian, all I feel is further dejection and the hopelessness of dealing with a bunch of lotus eaters with press releases trying to solve problems of an audience they do not understand.
Considering that 40% of Indians earn less than 1.25$ a day, this still is not going to completely solve the problems faced by the "average person" in India. Anyone who can afford this house is probably working in one of the cities where the cost of land would be at least 10 times the cost of the actual house. So who would actually be able to use this?
This would mean that the value of one of these cheap tiny houses is about the price of three years worth of income. In America, a house (including land) averages around $200k to $250k in a fairly populated area (Denver, Portland, Seattle, etc - you can forget about SF) which comes in at around three years or four years of income. It would seem kind of weird to be marketing a $200k home as a "cheap solution" for the poor.
I don't have the link handy, but there was another article as a followup to the $500 house saying the whole thing would hurt more than help. The construction, maint, and customizing of the houses were an important part of the local economy even as depressed as it was.
In an Indian context, I don't think it would hurt. Housing is terrible right now and a simple walk around an Indian city shows that conditions have hit rock bottom. Governments in India have been nothing but populist with no vision for the future. The complete lack of urban planning, a sensible government, and the lack of basic necessities is shocking. Despite this most government surveys act like there is nothing wrong.
For a country like India, what the Tatas are doing is simply commendable. They are trying to step in and solve some fundamental problems here and I would like to see them succeed -- if the governments and babus will allow them to.
It is very common practice in India to refer to Tata company as Tatas. I guess this is more because the Indians look at them more as a family and less a company. Tata is a family run business with several people having the surname Tata. Hence we call them Tatas. It is not really a grammatical mistake but an colloquial term.
Ha, I noticed that, too. But it was the headline of the article, so I thought I had been mistaken. I'm relieved to see that's not the case. Shoddy editing.
I respect the Indian engineering and the effort. I have several Indian friends, who are very capable and intelligent people. But with $2500 you just cannot make something I would call a car. See my other post on why.
- Front brake: 180 mm drum (drum brakes at the front... WTF???)
- Rear brake: 180 mm drum
- With kerb weight of 600kg and power output of 26 kW it will go reasonably fast with one person inside, but will be completely undrivable with 4 people inside. How do you overtake in this case? And being able to overtake IS a safety feature!
- The Nano's trunk is only accessible from inside the car, as the rear hatch does not open.
- Three lug nuts on the wheels instead of the usual four
SO one of the main concerns is the safety. I would not want any of my close people driving in this box of wheels, without basic safety features. Several tests in Europe showed pretty good results (not Euro NCAP though), but this is the European version, that costs around $6000. My main point is that for this money you can buy a much better 5-6 years old car, which will be much safer and much better to drive and live with.
The Indian government need to get their act together and not leave it up to the private companies to clean up the mess in India. I have spent time in Delhi and what I have seen is shocking. Private companies run taxi services for their workers because it is so unsafe and the government run services are so unreliable that they are left with no other option.
The major commercial districts are built with private money and thus you see great big modern buildings with dusty and potholed roads without any paths connecting them so stepping outside the campus of these buildings you go from 1st world to 3rd world in a matter of a few steps.
There is more to making someones life livable than simply constructing four walls with a roof and some windows. You need to implement proper sanitation and other fundamental facilities such as appropriate policing and transportation. without these you are just fueling the growth of these slums and the internal migration from the countryside into the cities.
I can see India with an incredible future and rapid growth if simply the corruption and mismanagement is sorted out in the government sector.