ICT Use in Rural India:

Opportunities and Challenges

Indian Institute of Management, Ahmedabad

subhash@iimahd.ernet.in

Subhash Bhatnagar
eGovernment Advisor, World Bank
sbhatnagar@worldbank.org
 Presentation Outline

 ICT and development potential

 Demonstrated opportunities from pilots
 Learning from successful cases
 Challenges in scaling up, replication
 Key role for creativity and innovation
 Issue of
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ly ocu
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Su ts and Licenses r od en
o f p u u ce t
l y i n
u pp mer
S su &
o n c e D e v e lo p m ent info
c d u m s,
r o e s e ct s, p ro g ra
p vi c proj
e r e s & f e e db a ck
s schem
i n fo Rural Citizen
g e & Access to Markets
w l e d
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usef omic ac & a n i n t&
i en y
econ e n t s , r
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t ert ocia Delivery of c a em ppo
E n o r s d u ce o
o f E n i c
inf health & h a m
n ono
educational e
ec
services
 Demonstrated Opportunities
 Education: Akshaya (Kerala), Sub Titles on TV
 Health: Webhealthcenter.com, Sri Lanka, MIS
in AP,SA, nLogue-Arvind Hospital
 Economic: eChaupal, GPS by fisherman, Tara
Haat, Datamation, nLogue,Drishtee telecenters,
Agriwatch Portal, e-Krishi Vipnan (EKVI)MP
 E-Government: Bhoomi, eSeva, Drishtee
 Empowerment: Computerized milk collection,
Lokvani (Sitapur), Lok Mitra (Jhalawar)
 Learning from Pilots
• Pilot projects by NGOs, Government, cooperatives,
private sector, and individual entrepreneurs. About
10,000 villages have telecenters or computers being used
for processing transactions.
• Large number of experiments but few have scaled up
• Most pilots have narrow objectives; are not multi
function; attract few users and are often not viable.
• Community centers run by volunteers/ individuals have
not been scaled up.
• Rural population willing to pay for true value addition
• The services that are of value vary with regions and
patterns of economic activity in the rural area.
ITC’s eChoupal

, February 26-27, 2004

 eChoupal Infrastructure and Services
 Internet kiosk in the house of a trained farmer (Sanchalak)
within walking distance of target farmers
 Warehousing hub managed by the erstwhile middleman,
within tractorable distance of target farmers
 Customised knowledge on farm and risk management
 Better supply chain for ITC for farm inputs --lower
transaction costs, better value through traceability
 Relevant real-time information results in higher income

Commodity prices, local weather, news, customized knowledge
despite heterogeneity, reduced transaction costs
 Direct marketing channel for farm produce

Screened for quality, demand aggregation for competitive prices
and efficient logistics
 eChoupal Scale, Scope and Plans
 3,500 eChoupals in 5 states of India covering 21,000
villages, servicing 2.0 million farmers, sourcing a range of
agri commodities (oilseeds, grains, coffee, aquaculture)
 Marketing a variety of goods and services (agri-inputs,
consumer goods, insurance, market research)
 2003-04 transactions US$ 100 million
 Plan for 20,000 Choupals in 15 states covering 100,000
villages, servicing 25 million farmers by 2010 with
projected transactions of US$ 2.5 billion
 Higher incomes through-better yields and prices
 Power of scale to the small farmer
nLogue Example: Ulagapitchampatti

Spray recommended by
agricultural college

Saving of Rs 140,000
($3000) for the farmers

Cost of information Rs 20
($0.42)

Before After
treatment treatment
nLogue Example-Tele-medicine
 Technology that makes
rural access inexpensive
and robust

Applications that draw a NGOs and grass root

large clientele that pays
for the service, ensuring
economic viability of the
kiosk
organizations that
Bridging the catalyze and mange the
Digital Divide community building
process

Content that empowers

rural citizens and enables
formation of
communities
 Innovations and Creativity:
Key to Success
 Making a market despite many missing links
 Creative use of technology in places or for a
purpose not originally intended.
 Organizational design- coming together of partners
with specific value proposition, incentives and rules
to cooperate.
 Combining emerging and traditional technologies to
overcome constraints
 Adapting business models to local contexts
 Role of network orhestrators
Challenges in Replication and Scale Up
 Mind set of policy makers and administrators

Mistrust of private sector-ineffective partnership

Policies on rural telephony, community radio

Reinventing the wheel-unwilling to learn from others
 Poor telecom access and infrastructure in rural areas--high
installation and maintenance costs
 Entrepreneurial capacity of the rural community-great acumen,
but needs plenty of training
 Management capability to execute complex business models and
to manage scale
 Understanding the agricultural value chain and rural society to
figure out the value addition of Information Technology
 Reluctant donors-lack of evidence of macro impact and
experience of failed projects
 Successful Scaling Up Models
 Organisations with financial resources, leadership,
strong project management and ability to discover
services that are valued. Three models have
emerged:

Large private/public/cooperative sector companies
operating in rural markets may be able to derive
sufficient value by improving business processes. to
make such centers viable and scalable.

Government services that are valuable can charge a user
fee for electronic delivery through privately owned
telecenters.

Network Orchestrators partner with providers of valued
service as well as rural entrepreneurs who create access
points to establish a large network of kiosks.
 Enablers of Innovation in ICT Use

 Political will
 Technology infrastructure
Technology  Funding and enabling policy
environment
Innovation  Human capacity
People Process 
Partnerships
 Creativity, entrepreneurship
Funds and management
 Awareness in citizens
 Role of Government/Private
Sector/NGOs and Donors
Size of Villages
Big Small

High
Economic
potential

Low
Funding Strategies for Rural ICT
Projects
 Innovation requires

Initiative

Risk taking

Tolerance for failure
 Therefore need for a venture fund to
support projects in rural ICT
Social e-Applications Venture Rollout Fund