Wash and soak the sago (sabudana) for 7-8 hours. Add the water so that it gets 1 inch over the sago (sabudana).
Drain the excess water.
Chop the potatoes finely. Chop green chilis into big pieces.
In a pot heat oil. Add cumin seeds. When the cumin seeds starts to sputter add green chilis and potato and salt. Add water and cover it and let it cook for 5 minutes on low heat.
Mix sugar and roasted peanut powder with sago (sabudana).
Add the above mixture to the pan. Mix well.
Cover it with the lid and let it cook for about 10-15 minutes till the sabudana becomes translucent. Stir occasionally.
Add salt and freshly grated coconut and mix well. Let it cook for 5 minutes. Turn off the burner. Do not open the lid for another 10 minutes.