Volume 14, No. 1, April 2004
An
account of the
Workshop
on Scaling up ICT for Poverty Alleviation in India
Indian
Institute of Management, Ahmedabad
February
26-27, 2004
Animesh Rathore
Centre for E-Governance, Indian Institute of Management
With inputs from Maitrayee Mukerji (Workshop Rapporteur)
Introduction:
The Workshop on
Scaling up ICT for Poverty Alleviation in India was organized at the Indian
Institute of Management, Ahmedabad (IIMA) during February 26-27, 2004, with an
objective of designing a ‘Social eApplications Rollout Venture (SERVE) Fund’
to encourage ICT initiatives aimed at socio-economic development of rural India.
Sixty-five participants, including potential stakeholders, from multilateral
organizations, Indian and international NGOs, Government of India, academia,
NASSCOM (National Association of Software and Service Companies) and financial
institutions attended this workshop, organized by the Indian Institute of
Management, Ahmedabad, in collaboration with the World Bank and NASSCOM, and
funded by the Department for International Development (United Kingdom). The
workshop involved two days of presentations and discussions which yielded
significant inputs for designing the fund.
Commencement of the
Workshop:
The participants were
welcomed by Prof. Bakul Dholakia, Director IIMA, who briefed them about IIMA and
its activities in the area of eGovernance, ICT and Poverty Alleviation.
Subsequently, Mr. Kiran Karnik, President, NASSCOM, narrated the significant
contribution made by the IT industry to India’s economic growth. However, he
pointed that, there is a dark side to this economic development, as the IT
expertise has not been exploited up to the potential in the rural areas where it
can make a huge difference. There have been efforts made by IT companies at
individual level and there have been successful pilots which need scaling up. He
then introduced the participants to a newly formed body called NASSCOM
Foundation, which represents the IT sector that has now become more concerned
about the rural development. He stressed the importance of the role to be played
by the government and the academia, industry, community and agencies like World
Bank with international experience and expertise. Prof. Subhash Bhatnagar (IIMA)
and Dr. Robert Schware (World Bank), the workshop coordinators, then defined the
objectives and framework of the workshop.
In the second session,
Prof. Bhatnagar discussed India’s present position in terms of digital
divide and the future. He emphasized that bridging the divide is not merely
increasing the number of telephone lines or providing improved Internet access,
but is about impacting the lives of the people and empowering them through ICTs.
He indicated that around 200 ICT enabled development interventions in various
stages of implementation are existent across the country, however the telecenter
model or community centered information kiosk, over the past few years, has been
found to be one of the more effective means to deliver services using ICT. He
also discussed four types of telecenters. The first type of telecenters are set
up by an individual, could be an entrepreneur or a government official, and are
usually confined to one or two locations. The success of such telecenters
depends on the individual. The second type includes the telecenters set up by
governments for improved service delivery. Such telecenters can be further
classified into two categories: One provides a single service, e.g. Issuance of
Computerized Land Records by Bhoomi in Karnataka, and the other delivers a
number of services e.g. Akshaya telecenters in Kerala.
The third type of
telecenters includes the ones set up by the private sector companies, e.g.
eChoupal telecenters set up by the ITC group. These telecenters are capable of
creating a win-win situation for the service provider as well as the
beneficiaries, however, the scalability and viability of such telecenters is
limited to areas having significant economic activity. The fourth type of
telecenters are set up by entrepreneurs on a large scale to deliver a number of
services, including institutional help to deliver government services, e.g.
Drishtee telecenters.
Some significant issues
like merging of two models were also raised, for instance, a Bhoomi kiosk
remains idle most of the time and an eChoupal computer can also deliver services
like Bhoomi, besides others. Such a combination could also ensure sustainability
of the telecenter in regions with low economic activity. The session laid the
foundation for the workshop proceedings and was chaired by Mr. R Chandrashekhar,
Joint Secretary, Ministry of Communication and IT, India.
Presentations:
To draw learning from
the experiences of successful ICT pilots in rural areas, five projects were
selected for presentation during third and fourth sessions on Day 1 of the
workshop. These included: Akshaya Program (implemented by the Government of
Kerala), eChoupal (implemented by ITC), Bhoomi (implemented by the Government of
Karnataka), Drishtee (implemented by Drishtee) and n-Logue (implemented by
n-Logue Communications). The projects were selected from various parts of the
country as they have shown some promise towards scaling up. The eChoupal model,
however, is an exception as it indeed has been able to scale up to such a degree
that has seldom been matched by any other ICT initiative. It has no funding and
runs on a market driven principle. Without any financial support from the
government, the eChoupals (eChoupal telecenters) have increased to 3500 within
two years of its implementation. The project has been a profitable venture not
just for the company but for the farmers as well. The presentations demonstrated
that irrespective of the type of telecenter, the value addition in the services
for consumers (rural as well as urban) was a key success factor. The challenges
in scaling up ICT projects for poverty reduction, education, governance, health
and environment were discussed in sessions following the presentations. The
description of projects and the challenges identified by the implementers are as
follows:
Presented
by: Ms. Aruna Sundararajan, IT Secretary, Government of Kerala
Akshaya
has been piloted in Malappuram, a backward district of Kerala state in India,
where 80 percent of the population is Muslim and 25 percent of the families have
at least one member who works in Gulf. This project aims at ensuring a
broad-base access to ICT, development of skills in using a computer, and
providing locally relevant content in local language to a large number of rural
citizens. Akshaya offers a unique public-private-community partnership model in
which capacity building is as important as service delivery. Before launching
Akshaya, a 19-indices survey was done to determine the ideal location of ICT/
Internet kiosks/ centres. Once the locations were found, advertisements were
given in local newspapers. A campaign also helped spread awareness about the
concept of Akshaya. The Akshaya centres, each covering 800-1200 households, are
planned to be set up throughout the state. Almost every centre can provide five
jobs, and thus, with 617 centres serving 600,000 households, over 3,000 jobs can
be generated for the local people at Malappuram. The potential entrepreneurs
from the local communities have been trained at the Akshaya centres to run these
centres which have also taken up the task of providing e-Literacy to one person
in every family to make Kerala a cent-percent e-Literate state. As a part of the
initiative, at least one person in each of the 6.5 million families in the state
will be made IT-literate. The project is currently operational only in
Malappuram district. Since June 2003, around 500,000 people have been trained in
Malappuram.
According
to the presenter, 40 percent of the capital invested by the kiosk owner would be
recovered by the end of training 1,000 members. While encouraging
entrepreneurship, the government has limited its role to that of a facilitator.
The stakeholders include various sectors of IT industry, political parties,
NGOs, intellectuals and opinion builders, educational institutions, government
and other officials, who have been linked with the Akshaya at various phases.
The Akshaya centres are also expected to support the e-governance initiatives,
communication advancements, e-commerce and information dissemination in the
state. In phase II Akshaya centers will be used for: (i) communication; (ii)
continuing education; (iii) public services provided by government—e-governance;
(iv) services provided by the corporate sector such as health etc. However, the
poor power supply in Malappuram remains an issue.
Challenges
in scaling up:
§
An
appropriate business model that can contribute to social development.
§
An
appropriate management model and defining government’s role.
§
Institutionalizing
the public-private-community
partnership model at the grassroots.
§
Appropriate
and affordable technologies that can be adopted across the state.
§
A
supportive policy environment to facilitate scaling up.
§
Viable
partnerships.
For
further information on Akshaya, please visit: http://www.akshaya.net/
Presented by: Mr. S
Sivakumar, CEO (ITC, IBD)
EChoupal is an
initiative of ITC (a large agricultural processing company in India) to link
directly with rural farmers for the procurement of agricultural/aquaculture
produce like soya, coffee, and prawns. EChoupal was conceived to tackle the
challenges posed by the unique features of Indian agriculture, characterized by
fragmented farms, weak infrastructure and the involvement of numerous
intermediaries. Traditionally, these commodities were procured in ‘mandis’
(major agricultural marketing centres in rural areas of India). ITC has now
established computers and Internet access in key rural areas where the farmers
can directly negotiate the sale of their produce with ITC. The PCs and Internet
access at these centres enable the farmers to obtain information on mandi
prices, good farming practices and place orders for agricultural inputs like
seeds and fertilizers. This helps farmers in improving the quality of produce,
and also helps in realizing a better price.
Each ITC kiosk having an
access to Internet is run by a sanchalak—a
trained farmer. The computer housed in a farmer’s house is linked to the
Internet via phone lines or by a VSAT connection and serves an average of 600
farmers in 10 surrounding villages within about a 5 km radius. The sanchalak
bears some operating cost but in return gets commissions for the e-transactions
done thru his eChoupal. The warehouse hub is managed by the middle-men called samyojaks.
The samyojak acts as a local
commission agent for ITC.
ITC has invested $ 22
million to set up 3,500 eChaupals serving 20,000 villages and 1.8 million
farmers in five states of India. Transactions worth $100 million were carried
out through these chaupals in the first year. ITC is adding 7 new eChaupals a
day and plans to scale up to 20,000 eChaupals by 2010 covering 100,000 villages
in 15 states, servicing 25 million farmers. Transactions through these eChaupals
may rise to about US $ 2.5 billion by 2010.
Due to the eChoupal
services, farmers have seen a rise in their income levels because of rise in
yields, improvement in quality of output and a fall in transaction costs. Even
small farmers have gained too. Customized knowledge is offered to the farmers
despite heterogeneity. Farmers can get real time information despite their
physical distance from the mandis.
The system saves procurement costs for ITC. The eChoupal model is quite
different from the other models, as the farmers do not pay for the information
and knowledge they get from eChoupals. The eChaupal model runs without any
subsidy. There is no government money involved in this project. ITC has
extracted value in four steps: (a) elimination of non-value adding activities;
(b) differentiating product through identity preservation; (c) value added
products traceable to farm practices; (d) e-market place and support services to
future exchange. One of the success factors is ITC’s managerial competence to
execute a complex project and manage cost. The ITC bottom line is –roll out,
fix it, and scale it up. The principle of the eChaupals is to inform, empower
and compete.
Challenges in scaling
up:
-
Developing entrepreneurial capacity of rural community to take up the role of sanchalaks and samyojaks is difficult and plenty of training is required. Also, there is a need to enhance management capacity of ITC frontline by developing a new cadre of agricultural graduates.
-
Lack of infrastructure, such as power and broadband.
-
Slow policy reform (e.g. modification of the Agricultural Marketing Act).
For further information
on eChoupal, please visit: http://www.echoupal.com/,
http://poverty.worldbank.org/files/14647_E-choupal-web.pdf
Some suggestions for the
SERVE fund were made during the eChoupal presentation. It was indicated that the
risks pertaining to funding unviable models and misuse of the fund should be
minimized. It was suggested that some grants could be provided for procuring
relevant items like solar battery or VSAT. The fund should also support
technical research (e.g. wireless broadband) that can help reaching remotest
areas. It was also suggested that the fund could provide special subsidies for
replicating successful pilots and for the poorest of users.
Presented by: Mr. Satyan
Mishra, CEO, Drishtee
Drishtee is a private
sector initiative to scale up Gyandoot type kiosks (http://www1.worldbank.org/publicsector/egov/gyandootcs.htm)
based on a tiered franchise and partnership model. Drishtee provides technical
expertise and management consultancy to build the IT infrastructure and the
human capacity to link service providers (government departments and private
firms) with the rural citizens. The kiosks are owned and operated by small rural
entrepreneurs. Presently 180 kiosks are operational across four states and five
districts where the majority of population is rural. Drishtee is providing
computer education, commercial services, BPO and Photo studio and other services
like rural employment, e-health, etc. For 25 to 35 cents, villagers can apply
for various services such as a caste certificate, copy of land title,
electronically through the Drishtee kiosks. For another 25 cents, any citizen
can send a complaint to the government by e-mail regarding their pensions,
health services, water facilities etc. Most of the earnings is non-network
dependent. In offering these services Drishtee is partnering agencies like RCSM,
ICICI and DRDA. Existing kiosks are sustainable. Drishtee is planning to open
another 6000 kiosks. Identifying entrepreneurs is important, as true
entrepreneurs may not be those who have money or who come forward initially.
Challenges in scaling
up:
-
Rich farmers own more kiosks.
-
Services limited by bandwidth and poor power supply.
-
Unavailability of Venture funds.
-
Lack of research (that can help planning) in rural areas – research conducted by organizations at individual level is costly and imperfect.
For further information
on Drishtee, please visit: http://www.drishtee.com,
http://poverty.worldbank.org/files/14646_Drishtee-web.pdf
Presented by: Mr. B P
Kaniram, Government of Karnataka
Bhoomi has offered an
alternative model for creating rural telecenters. Bhoomi delivers a signed copy
of land title in 15 minutes for a user fee of Rs. 15 at 177 on-line Bhoomi
centers in Karnataka. It is estimated that between Rs. 90 and Rs. 100 million
would be collected each year from user fee. Bhoomi will now permit rural
telecenters operated by private entrepreneurs to access the Bhoomi database on
land ownership and issue the land titles. Owners of private kiosks will be able
to charge an additional fee of Rs. 10 from the farmers. Monthly income from
issue of land titles will make a 1000 telecenters economically viable in
Karnataka. Thirty such centers are already operating in one district. The
revenue department was able to take up the Bhoomi project because a grant was
available from the central government to cover the investment of $ 5.0 million.
After the implementation of the project Bhoomi has recovered the investments in
two years. An investment of $ 2 million will be needed to set up a thousand
kiosks.
Challenges in scaling
up:
-
Insufficient number of distribution points (177), as a result farmers need to spend on traveling and lose a day’s income.
-
Inability of government to open a thousand kiosks in a sustainable manner – need for private participation.
-
Merging the Bhoomi system with kiosk services: This will mean if the kiosk owner is not doing a proper job then it can falter the Bhoomi system. And if the Bhoomi services by the government are unsatisfactory then the kiosk owner might lose the credibility as well. The issue of mutual interdependence needs to be taken care of.
-
Training of government officials.
-
Training of kiosk operators on government processes.
For further information on Bhoomi, please visit:
http://www1.worldbank.org/publicsector/egov/bhoomi_cs.htm
Presented by: Mr. Gautam
Mukherjee, Sr. VP, nLogue Communications
N-logue project is using
the least cost technology. The aim of the project is to develop all necessary
support devices. Efforts have been made to develop robust, profitable and
sustainable business models. About 150 towns have been targeted for the growth
of kiosks under the n-logue project. About 1024 installations have been made by
the end of January 2003. n-logue’s effort has been to prepare a business model
which is technology based and cost the least. CorDECT
technology, developed by the TeNet Group of IIT, Chennai is used in the
current project. The company goes to the local service provider which in turn
goes to the help of village kiosk operator during the n-Logue operation.
The business model of
n-Logue emulates the success of the public call operators (PCOs). In every
village that n-Logue ventures into, it identifies an entrepreneur and help him/
her set up a kiosk equipped with a PC with multimedia and web camera, a CorDECT
Wall-set and accessories to connect to the Internet, printer, an uninterrupted
power supply and a suite of local language applications among others.
Challenges in scaling
up:
-
High overall cost.
-
Inefficient bureaucracy.
For further information
on n-Logue, please visit: http://www.tenet.res.in/nlogue.html
Some suggestions for the
SERVE fund were also made during the presentation. First, the fund should be
directly disbursed to private players rather than a routed investment coming
through the governments. The fund investments should primarily be soft
term-loans and grants should be restricted to scaling up in economically
unviable instances. An annual review of investments should be done and fund
should be diverted to superior performance projects. A part of the fund can be
used as venture capital for enterprises involved in creating software,
technology or hardware useful in the rural economic system.
Learning from the
experiences:
The reasons behind the
success of the projects presented vary significantly. In case of Akshaya,
affective awareness campaign supported by pre-existing high literacy levels and
the involvement of local self-governments were driving factors, whereas in case
of Bhoomi it was the ‘killer application’ that worked and farmers are
willing to pay Rs. 25 (approx 60 cents), which is higher than the earlier fee of
Rs. 2 (approx 5 cents), but is much lesser when compared to the bribes, ranging
from Rs. 100 to 2000 (approx $ 2.3 to 45), and delay in the earlier system.
N-Logue’s strength has been its technology that enables it to enter the remote
areas. Technology, however, has remained an issue of concern even for a highly
successful project like eChoupal. Yet eChoupal has been able to find value
propositions which create a win-win situation for the beneficiaries as well as
the stakeholders. The availability of managerial competency and learning from
failures has contributed to the scaling up of eChaupal.
The eChoupal model has
demonstrated its superiority in scaling up over the other models. However,
certain issues that eChoupal is facing, like lack of power and infrastructure
can be addressed through innovative technological solutions as shown by n-Logue.
Another aspect is the presence / absence of supportive policy environment. In
case of eChoupal, the slow pace of modification of Agriculture Marketing Act
poses a challenge in scaling up. The success of eChoupals in economically active
areas also points at the risk that is involved in venturing in economically less
active areas. In such areas, a killer application like Bhoomi can optimize
economic sustainability of the telecenters. The Bhoomi project also faces a big
challenge in scaling up, as the present number of telecenters (based at local
administrative offices) or access points seems insufficient. Thus, combining the
eChoupal and Bhoomi models seems a good option. The combination of services
offered by Drishtee has been its major strength and other projects can take
learning from this, however Drishtee faces a big challenge in scaling up due to
the lack of venture capital.
Various issues like slow
policy reform, high cost of implementation for governments / private sector, etc
can be dealt with by building effective partnerships across governments, private
sector and the community, as demonstrated by Akshaya. Some other important
issues like need for research, training, and development of relevant content
were also raised during the presentations and discussions.
Scope, size and
management of the SERVE Fund:
During the fifth and the
final session on Day 1, the participants were briefed about the initiatives
taken by the World Bank to support eGovernment projects in India. A UNDP fund of
US $ 5 million for ICT pilots in India was also discussed in brief to clarify
that while the UNDP fund would work for pilots, the SERVE Fund is intended to
deal with the issue of scaling up. The session was coordinated by Dr. Schware
and it laid basis for discussions on the Scope, size and management of the SERVE
Fund on Day 2.
On Day 2, the criteria
for selecting ICT projects for scaling up was prioritized along with the
methodology for evaluating projects, and the method of scaling up worthwhile
projects. To discuss the design of the fund, the participants were divided in
two panels. The first panel discussed the Scope of Activities and Size of the
Fund. The second panel discussed the structure and administration of the Fund. A
basic Draft Paper prepared by IIMA that provided various alternatives for
designing the SERVE Fund was discussed at length during the above sessions on
Day 2.
The
third session of the Day 2 ‘Design of the Fund: Freezing Various Parameters’
began with the presentation made by the representatives of both the panels and
was followed by a discussion focusing on the nature of the fund and the
organization designated for its management and administration.
The final session of the workshop focused on formulating an Action Plan on the basis of proceeding of the workshop. The Draft Paper incorporating the recommendations of the workshop can be accessed here.