Strategy for Digital Inclusion: Experience from India

Subhash BhatnagarAdjunct Professor

Indian Institute of Management, AhmedabadSubhash@iimahd.ernet.in

Consultant eGovernment Advisor, World Bank

Presentation Outline

Rural citizens-where can ICT help?•Demonstrated potential from pilots in •many StatesFew examples of large scale use: Bhoomi, •eChaupal, nLogue, Akshaya and milk collection centersKey role for creativity and innovation•Challenges in scaling up, replication•

Development info

projects, programs,

schemes & feedback

Procurement

of ProduceSupply of

inputs

Supply of

consumer

produce &

services

Knowledge & info

useful for

economic activities

Entertainment &

info for social needs

Issue of Certificates

and Licenses

Delivery of health &

educational services

Education, training to

enhance employm

ent &

economic o

pportunity

Access to Markets

Rural Citizen Where can ICT help?

Demonstrated Opportunities

Education: Akshaya (Kerala), Sub Titles on TV•Health: Webhealthcenter.com, MIS in AP, nLogue-Arvind •HospitalEconomic Opportunities: eChaupal, Tara Haat, Drishtee, •NDDBE-Government: Bhoomi, eSeva, Drishtee, Gyandoot, •Lokvani, NEGP- creation of 100,000 Citizen Service CentersMulti purpose telecenters: SARI in Tamilnadu, nLogue in •many states, NIC centers in NEInclusion, Advocacy and Empowerment: Not many •examples

Land Record Computerization

20 million records, 6.7 mln farmers, 9000 villages. VAs •issued RTCs and processed mutation in earlier systemRTC issue took 3-30 days and a bribe of Rs 100-2000. •Mutation can take up to 2 years (30 days)Encroachment of public land180 centers operational for one year where RTCs are •issued on-line for a fee of Rs 15. Mutation request filed on line5.2 million users, Rs. 80 mln collection goes to dept.•Investment of Rs 180 million•Operational expenses: Rs 40 million at 5 million users•

2002 and 06 Report Card on Bhoomi

A Survey of 240 users/nonusers from12 kiosks in 2002 :Ease of Use: 78% of users who had used both systems found Bhoomi simpler; 66% used Bhoomi without help Vs 28% in manualComplexity of Procedures: 80% did not have to meet any one other than at kiosk. In manual, 19% met one officer and 61% met 2-4 officialsErrors in documents: Bhoomi 8% Vs manual 64%Rectification of errors: Sought correction: 93 % Vs 49%, Timely response: 50% Vs 4%Cost of service: 84% one visit to Bhoomi center at Taluk HQCorruption: 66% paid bribes very often Vs 3% in BhoomiStaff behavior: Bhoomi Good (84%) Vs manual Average (63%)

240 users ob Bhoomi and manual system in 2006 has revealed:0.5 trips saved per transaction, 34 minutes of wait saved19% fewer people paid bribes, Rs 66 million/ year bribes saved80 % prefer BHOOMI

Composite Scores on 18 AttributesSignificant Improvement on a 5 Point Scale

Difference Average

ComputerManualProject

0.150.383.930.493.78CARD0.550.743.900.863.35KAVERI0.750.904.120.613.37AMC Civic Center0.840.594.320.793.48Check Post1.030.584.260.583.22E-Procurement1.270.394.660.653.39E-Seva1.600.514.460.862.86BHOOMI

S.D.AverageS.D.Average

0.000

0.200

0.400

0.600

0.800

1.000Cost

Eff iciency

Quality of ServiceQuality of Governance

Absence of Corruption

Bhoomi

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 farmersWarehousing hub managed by the former agent, •within tractorable distance of target farmersCustomised knowledge on farm and risk management•Better supply chain for ITC for farm inputs --lower •transaction costs, better value through traceabilityRelevant 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•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 collegeSaving of Rs 140,000 –($3000) for the farmersCost of information Rs 20 –($0.42)

Before treatment

After treatment

nLogue Example-Tele-medicine

Akshaya Telecentre Project, Kerala

630 centres by early 2003•e-literacy – subsidized by village council •Strong grassroots campaigning•500,000 people trained by Dec 2003•

Indicators of Success

100% family e-literacy achieved•Provided livelihood to entrepreneurs•Project accepted by local community as ‘legitimate’•

Bridging the Digital Divide

NGOs and grass root organizations that catalyze and mange the community building process

Applications that draw a large clientele that pays for the service, ensuring economic viability of the kiosk

Content that empowers rural citizens and enables formation of communities

Technology that makes rural access inexpensive and robust

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 constraintsAdapting business models to local contexts•Role of network orhestrators •

Enablers of Innovation in ICT Use

Political will •Technology infrastructure•Funding and enabling •policy environmentHuman capacity•Partnerships•Creativity, •entrepreneurship and managementAwareness in citizens•

Technology

InnovationProcessPeople

Funds

Key Challenges is to Scale UpPoor infrastructure in rural areas: electricity, communication, •Internet (Broadband) access results in high cost of installation and maintenanceBarriers in acceptance of new modes of communications result •in weak demandGetting appropriate content developed in absence of market •pullEntrepreneurship in rural communities-great acumen, but need •plenty of training Management capability to execute complex business models •and to manage scaleUnderstanding economic value chain in rural society to figure •out the value addition of ICT Problems of affordable access, literacy, IT literacy, language •results in weak demand

Successful Scaling Up Requires:Success is likely in organisations with financial resources, •leadership, strong project management and ability to discover valued services. 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.Intermediary organizations partner with providers of –valued service as well as rural entrepreneurs who create access points to orchestrate the operations of a large network of kiosks.

Role of Government/Private Sector/NGOs and Donors

Big Small

Size of Villages

High

Low

Economic potential

Citizens Favor More e-Government

1.083.22Rural and urban poverty level have changed

1.203.30Rural citizens benefit greatly from e-Government services

1.013.50E-gov services benefits only the urban people

0.983.74E-gov services benefits only the rich and influential

0.923.73E-gov services puts the poor at disadvantage

Digital Inclusion

1.143.22Building schools, roads, dispensaries is more useful than E-gov projects

1.172.96Money spent in e-gov should be used for other government activities

Investments in Development Schemes versus e-Government

0.963.85Computerization of government departments is a waste of resources

0.834.13More govt department/ public agencies should be computerised

0.824.12Government should make more investment on E-gov

More investment in e-Government

0.804.12E-gov has helped to improve the image of government

0.794.03Increases accountability & transparency of government

0.893.98Reduces corruption in delivery of public services

0.734.14Enhances citizens convenience in availing govennmet services

Improvement in Governance

0.823.97E-gov makes an impact on the literacy level of society

0.734.03E-gov makes an impact on the knowledge of society

SDMeanThe Knowledge Society

The Way ForwardClearly defining the vulnerable groups to be targeted.•Understand the needs of vulnerable groups.•Selecting applications that can impact targeted groups•

Improve delivery of services needed by the poor/vulnerable–New services to create opportunities for employment/income –

Embed eGov projects in key development initiatives•Auditing Programs for impact on poor/ vulnerable•Policies to encourage competition and incentives to •enhance rural telecom access Enabling policy framework for use of technologies •relevant for the poor, creation of content, and viable access pointsEnable partnerships: Govt,NGOs, Media, Private sector•

Integrated Citizen Service CentersOne hundred thousand common services centers for •0.6 million villages under the National eGovernment Plan. Investment of Rs. 57 billion. Access point for •government services and services offered by private and non governmental agenciesOptic fiber connectivity up to block level by NEGP•effective public-private partnership for long –term •sustainabilityKey role for network orchestrator. An agency •appointed to oversee the operation has done some preliminary work.