Boil the diced potatoes in a saucepan until just cooked and keep it aside.
To make a paste, heat the oil in a non-stick pan and roast all the ingredients except the dry coconut. Grind this roasted mixture together with the dried coconut.
For the tempering, heat the ghee in a pan and add all the spices.
Add the green pepper and cashew nuts and stir fry for a few minutes.
Add the potatoes, peanuts, and the ground paste and stir.
Add the tamarind water, green chili and 3 cups of water and cook for a few more minutes until all the ingredients are cooked through.
Add salt, mix well and serve hot with puri or chapati.