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

Rural Citizen Issue of Certificates Supply of and Licenses inputs Procurement of Produce Supply of consumer produce & services Development info projects, programs, schemes & feedback Rural Citizen Access to Markets Knowledge & info useful for economic activities Education, training to enhance employment & economic opportunity Entertainment & info for social needs Delivery of health & educational 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 treatment After treatment

nLogue Example-Tele-medicine

Bridging the Digital Divide 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 NGOs and grass root organizations that catalyze and mange the community building process Bridging the Digital Divide 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 Funding and enabling policy environment Human capacity Partnerships Creativity, entrepreneurship and management Awareness in citizens Technology Innovation Process People Funds

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