Wednesday, September 24, 2014

Business sense of sending Mars Orbiter Mission / Mangalyaan

Today India has created a history, by entering the MARS orbit in first attempt, and that too on relatively low budget of $74 M.There are only three other space agencies that have ever reached MARS orbit.

Did India have its priorities right when they decided to spend this amount on space research?

If you look at spend per person, $ 74 M is less than 10 cents per person in India.
Contrast this with the amount we spent
  • In protecting our VIP ($65 M for 340 ppl in 2013 in Delhi), 
  • Or the money we lost through corruption(CWG/2G/3G/DLF/Coal/.. each was multiple times)
  • Or a as a percentage of the GDP
In short 70 M is minuscule amount for India as a country. 
Still, we have lost money in past/ or its a small amount should not be reason for us waste tax payer's money.

So, for the moment let’s ignore the per person spend and the fact that its a small sum of money for large country like India.
Lets ignore the long term ROI (Return on Investment) for the entire humanity. 
Let’s discount the softer benefits / brawny points scored on the technical prowess’s of Indians, boost to self-respect of all Indians, the bragging rights in all discussions with foreigners, vicarious pleasure in ISRO’s achievements, more jobs for Indians in NASA etc.

Purely from a balance sheet perspective, will India derive any positive Return on Investment (ROI) on Mars Orbiter Mission ?

Yes.

I see the money spent so far as an advertisement for more business.
Yup. You heard it right. MORE business, Millions of $ flowing into Indian economy.  Specifically for one of the Government owned company. 

How and for whom?

ISRO has a commercial arm Antrix Corporation. This lesser known mini-ratna company has been around since 1992, and provides low-cost space solutions, technical consultancy services. This business could be in the form of outsourcing in the space research industry / satellite manufacture/ ground equipment / launch services of satellites / selling satellite services / Consultancy etc.
Most of these services are being delivered already - biggest one being selling satellite services (Transponder leasing mainly) and launch services. The Space Port of India (Satish Dhawan Space Centre) has launched satellites for many other countries in past– check the list here.
http://www.antrix.gov.in/is_launched.html 

If you look at the focus that has been given to the budget of the project, and getting it right first time, the intent is almost that of a sales pitch. The sales pitch is simple - we are the best and cheapest. Mr Customer (France / Germany/UK/Japan/..)  ISRO offers you the most bang for your buck - as demonstrated they can send a satellite to MARS at a cost of producing a Hollywood movie. And they can get it right in the first attempt. The credibility that ISRO has gained via this demo, and Modi as the sales rep, Antrix Corp will certainly reap rich dividends. 

Looking beyond the short term benefits, in mid term today's success will give a big boost for nurturing the space industry ecosystem in India (Colleges, Courses, attract investment,  create impetus for one more space port - maybe in collaboration with another country) .
In long term, this will help bring in prosperity for Indian citizens, boost self respect & pride for Indians in India or abroad, no duplication of effort in rediscovering the wheel for other countries, and overall advancement for humanity.
btw one added beneficiary could be for Modi in next elections - due after five years.
Win Win for all.