NEW DELHI and NEW YORK CITY—On rural Indian roads, a farmer occasionally comes along riding in an improvised vehicle, jury-rigged from bullock carts, irrigation pumps and whatever else is at hand. These vehicles, known in Hindi as jugaad, are iconic of a long tradition of frugal innovation in India, where machines are often repurposed in ways manufacturers had not intended, and almost nothing is thrown away. Lately, jugaad has come to signify any sort of low-cost, ingenious innovation out of India, encompassing everything from providing software services at costs that cannot be matched in the West to the rollout of the popular Tata Nano car.

The latest example of frugal Indian innovation is a low-cost handheld computer that the government says will cost only 1,500 rupees (about $35). Kapil Sibal, India's minister of human resources development (whose portfolio includes education), unveiled it publicly at the end of July, with government officials subsequently saying it will launch in January. The device has attracted attention—and skepticism—because of its remarkably low price. And some Indian government officials will not be satisfied until the price falls to $10.

Under the Harvard-educated Sibal, who previously headed the Ministry of Science and Technology, the government of India has embarked on a national mission to improve the quality of education in India. It has upgraded the salaries of teachers, quickened the hiring process, and created new centers of engineering education. One of Sibal's goals has been to ensure that more of the 220 million children enrolled in Indian schools go on to college, as he reiterated on a visit to New York City this past week. The low-cost handheld computer is one of his high-profile initiatives.

Dubbed Sakshat, the tablet has a resistive touch screen, seemingly inspired by Apple's iPad. It comes in a ruggedized plastic casing, has two gigabytes of flash memory, two USB ports, along with headphone and video output jacks and Wi-Fi capability. Sakshat uses the Android operating system and consumes a meager two watts of power, which is supplied by an internal lithium-ion battery that could be charged using a solar-powered charger, says N. K. Sinha, the ministry official in charge of the project.

Sinha says the Indian government wants to provide broadband access and low-cost access devices across all government-funded colleges and universities in India as educational aids. India dominates the global market for business process outsourcing and software services, yet most students at Indian colleges and universities cannot afford a laptop.

Low cost, tall order
Previous efforts to build low-cost computers have been plagued by cost overruns. The most famous of these attempts, the One Laptop Per Child (OLPC) project, was launched by Nicholas Negroponte of the Massachusetts Institute of Technology Media Lab in 2005. OLPC said it would deliver a laptop for $100, but when mass production started in 2007 the price had risen to $188 (when bought in bulk). Subsequent attempts have lowered the price somewhat, but no one has succeeded in delivering a laptop at a price comparable to $35. (Currently, the CVS drugstore chain is marketing a Sylvania Netbook for $99.)

Sinha credits Negroponte for the "original paradigm shift" in lower-cost personal computers. Still, he explains, even if Negroponte had been successful in meeting the $100 target, the Indian government could not have afforded OLPC laptops for the huge student population. Estimates put the number of students in higher education around 12 million to 14 million.

When the Indian government decided it wanted to develop its own low-cost computer, Sinha was sent to M.I.T. to learn from the OLPC project. He realized that some hard questions would have to be asked if the target cost was to be achieved. "It's a question of mind-set," he says. "Why do I need to build capacity in every device? Can we use cloud computing? Do we need number-crunching ability?"

Design teams began work in 2007 with the original $10 goal. In February 2009 the government unveiled its first attempt, which it said would cost $10. The device did not get good reviews.

"It does almost nothing," Wired complained. "What we thought would be a humming notebook equipped with Wi-Fi and two-GB RAM turns out to be little more than a box with sockets—no keyboard, no monitor."

"They said that it is a 'brick'," Sinha says. "What people did not see was that while it did not have a screen, it had a projector."

Take two
It was back to the drawing board. The ministry drastically rethought the approach, Sinha says, and decided that a screen was essential.

Furthermore, the ministry decided that it would issue an open challenge, with specifications and the price target for the handheld computer, and have various teams work toward the goal. Ten teams competed; a group led by the Indian Institute of Technology in Jodhpur ultimately designed the prototype that appeared in July.

On inspection, a prototype of the new handheld is surprisingly light and easy to use. It can easily download and open PDF documents, do word processing, and surf the Web. The colors and contrast on its seven-inch screen are decent.

The government will initially manufacture 100,000 of the new handhelds, according to Sinha, and underwrite half their cost for educational institutions that want to buy them. Sibal, the government minister, affirmed that such subsidies were in the offing.

Sinha explains that, if other teams complete prototypes, the government may manufacture a similar number of those devices as well and release them into Indian educational institutions. Then, in the next iteration, it would choose the best design—as determined by thousands of students. He would not confirm the name of the manufacturer, although some news reports have indicated that it is HCL Technologies, Ltd., an Indian information technology company known for its low-cost computers.

"Something missing"
Many in the computer industry are mystified about how the Indian government plans to pull this off at such a low cost. "Without going beyond the top handful of components, even with all our most aggressive assumptions, we are looking at bill of materials costs that add up to $28 to $29," Andrew Rassweiler, the principal analyst of teardown services at the analyst firm iSuppli, said in an e-mail. Add in all the other components, such as a physical enclosure, printed circuit boards and Wi-Fi hardware, and the materials costs probably rise at least $20 more, Rassweiler said.

"Anything is possible, I suppose," he added. "I just don't know how to get there with the building blocks much of the industry is using. There's something missing from the picture."

Production questions aside, the size of the handheld itself may be an issue, OLPC's Negroponte says. He has not yet seen the device but feels it is too small to be really useful to students. On the other hand, "it would be remarkable" if India could indeed deliver the computer to students at $17.50 after subsidy, Negroponte says. "I'd be very happy to see them succeed," he adds.

Meanwhile, reaction across India has been measured, and many are taking a wait-and-see approach. Will it really help higher education?

"Education is not gadget-driven but is more in terms of using the technology for effective teaching and learning," says Sanjay Dhande, director of the Indian Institute of Technology Kanpur, widely considered one of India's best educational institutions. Dhande points out that a new device by itself will not help overcome more fundamental challenges such as lack of resources and inadequate teaching, and that it is still too early to tell what Sakshat's impact would be.

Sinha and Sibal, for their part, still have their sights set on $10, which Sibal affirmed in New York City last week. Sinha says that goal can be achieved by more innovation and targeted cutting of costs, coupled with the continual decrease in semiconductor component prices. If that were to happen it would mark yet another milestone for frugal innovation, and another triumph of jugaad.