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

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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.

ITCs 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
treatment

After
treatment

nLogue Example-Tele-medicine

Technology that makes

rural access inexpensive
and robust

Applications that draw a

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

Bridging the
Digital Divide

Content that empowers

rural citizens and enables
formation of
communities

NGOs and grass root

organizations that
catalyze and mange the
community building
process

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
High

Economic
potential
Low

Small

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