MEDNARODNA PODIPLOMSKA ŠOLA JOŽEFA STEFANA JOŽEF STEFAN INTERNATIONAL POSTGRADUATE SCHOOL SATYA PRAKASH PATEL COMMON SERVICE CENTER (INTERNET CONNECTED SERVICE DELIVERY KIOSK): UNLOCKING THE POTENTIAL OF RURAL INDIA MASTER THESIS LJUBLJANA, JUNE 2011
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MEDNARODNA PODIPLOMSKA ŠOLA JOŽEFA STEFANA JOŽEF STEFAN INTERNATIONAL POSTGRADUATE SCHOOL
SATYA PRAKASH PATEL
COMMON SERVICE CENTER (INTERNET CONNECTED SERVICE DELIVERY KIOSK): UNLOCKING THE
POTENTIAL OF RURAL INDIA
MASTER THESIS
LJUBLJANA, JUNE 2011
COMMON SERVICE CENTER (INTERNET CONNECTED SERVICE DELIVERY KIOSK): UNLOCKING THE POTENTIAL OF RURAL INDIA
SATYA PRAKASH PATEL
Master Thesis Jožef Stefan International Postgraduate School Ljubljana, Slovenia, May 2011
Evaluation Board:
Prof. Dr. Ivo Šlaus Chairman, Rudjer Boskovic Institute, Zagreb, Croatia
Prof. Dr. Marko Hočevar, Faculty of Economics, University of Ljubljana, Slovenia
Prof. Dr. Peter Stanovnik , Member, Institute for Economic Research, Ljubljana, Slovenia
SATYA PRAKASH PATEL COMMON CENTER (INTERNET CONNECTED SERVICE DELIVERY KIOSK):UNLOKING THE POTENTIAL OF RURAL INDIA Master Thesis
SKUPNI STORITVENI CENTER (KIOSK ZA SPELTNO DOSTAVO STORITEV): SPROSTITEV POTENCIALA RURALNE INDIJE
Magistrsko delo
Supervisor: Prof. Dr. Peter Stanovnik Ljubljana, Slovenia, June 2011
VII
Table of Contents
Abstract......................................................................................................................... X
Abbreviations..............................................................................................................XII
1. Introduction ............................................................................................................ 1
2. The Aim, Goal and rationale of the thesis.............................................................. 3
2.1 Aims of thesis......................................................................................................... 3
2.2 Goal ....................................................................................................................... 3
2.3 Argumentation of the relevance - Why CSCs?........................................................ 3
2.4 Rationale for CSC .................................................................................................. 4
3. Methodology and materials .................................................................................... 5
3.1 Methodology .......................................................................................................... 5
3.2 Materials ................................................................................................................ 5
3.2.1 Secondary Sources ........................................................................................... 5 3.2.1.1 Market survey............................................................................................ 5 3.2.1.2 Interviews .................................................................................................. 6 3.2.1.3 News Papers .............................................................................................. 6 3.2.1.4 Research Work .......................................................................................... 6 3.2.1.5 Project Reports .......................................................................................... 6 3.2.1.6 Journals ..................................................................................................... 7 3.2.1.7 Books ........................................................................................................ 7
3.2.2 Primary Sources ............................................................................................... 7 3.3 Limitations ............................................................................................................. 8
4. Concept and Literature Review ............................................................................. 9
4.1 Introduction............................................................................................................ 9
4.2 Role of ICT ............................................................................................................ 9
4.3 Impact of Broadband on Economic growth........................................................... 10
4.3.1 Global scenario............................................................................................... 11 4.3.2 Indian Scenario .............................................................................................. 11
4.4 Digital divide........................................................................................................ 12
4.5 e-Governance ....................................................................................................... 12
4.5.1 Linkages between ICT, Governance Reforms and Development..................... 13 4.5.2 ICT enabled Governance Reforms in India: Facts, Figures ............................. 13
4.6 Inclusive Growth.................................................................................................. 14
4.7 Financial Inclusion ............................................................................................... 15
4.8 Demographic Dividend......................................................................................... 15
4.9 Internet connected service delivery kiosk scheme in other part of world. .............. 16
4.9.1 Comparison between CSC, s of India to CeC, s of Philippines........................ 16 5. National e Governance Plan (NeGP) of India ...................................................... 19
5.1 Introduction.......................................................................................................... 19
5.2 NeGP: Goal, vision, strategy and framework ........................................................ 19
5.3 Strategy of NeGP ................................................................................................. 20
VIII
5.4 Framework of NeGP............................................................................................. 20
5.5 Component of NeGP............................................................................................. 21
5.5.1 Mission Mode Projects ................................................................................... 22 5.5.2 Core Infrastructure:......................................................................................... 23
5.5.2.1 Connectivity: State Wide Area Networks (SWANs)/NICNET................... 23 5.5.2.2 National Data Bank/ State Data Centres (SDCs) ....................................... 23 5.5.2.3 Common Service Centres (CSCs): primary mode of delivery ................... 24
5.6 Conclusion:........................................................................................................... 25
6. Common Service Centres: The Front End Service Delivery Channel ............... 27
6.1 Introduction .......................................................................................................... 27
6.2 Goal, Objectives and Characteristics of CSC......................................................... 27
6.3 Technological Framework of CSC ........................................................................ 28
6.3.1 Three Pillars of CSC’s Infrastructure .............................................................. 28 6.4 Organisational Framework of CSC ....................................................................... 30
6.5 Service Framework of CSC................................................................................... 30
6.5.1 Approach of Services Framework ................................................................... 31 6.5.1.1 Bottom up approach .................................................................................. 31 6.5.1.2 End-to-End Services................................................................................. 32
6.5.2 Services offered by CSC................................................................................. 32 6.6 Opportunity Space/Market Potential of CSC Project ............................................. 34
6.6.1 Analysis of CSC Offered Services and Customer need.................................... 34 6.6.2 e-Government Services................................................................................... 35 6.6.3 B2C services and B2B Services ...................................................................... 35
7. Challenges and Issues in CSC Project’s Implementation.................................... 39
7.1 Implementation Status .......................................................................................... 39
7.2 Challenges and Issues in the Implementation of CSC Scheme............................... 39
7.2.1 Delay in deployment of G2C services .............................................................. 39 7.2.2 Lack of Entrepreneurship in VLEs.................................................................. 41 7.2.3 Lack of capacity building effort ...................................................................... 41 7.2.4 Inconsistent Connectivity and Electricity ........................................................ 42 7.2.5 Inadequate content in regional languages ........................................................ 43 7.2.6 Lack of Awareness about ICT and CSC Scheme............................................. 43
8. Strategic Analysis of CSC project ........................................................................ 45
8.1 Introduction .......................................................................................................... 45
8.2 SWOT Analysis of CSC Project............................................................................ 45
8.3 Porter’s Five Forces Analysis of CSC ................................................................... 47
8.4 Business Map/Ecosystem analysis of CSC ............................................................ 49
8.5 Value Chain Analysis of CSC ............................................................................... 50
8.5.1 Primary Activities of CSC ............................................................................. 52 8.5.2 Support Activities of CSC............................................................................... 52
8.6 Findings of Strategic Analysis of CSC Project ...................................................... 53
9. The Business Model Analysis of CSC: Sustainabilityand fianacial viability of CSC ................................................................................................................... 55
9.1 Introduction .......................................................................................................... 55
IX
9.2 Concept of business model ................................................................................... 55
9.3 Value Proposition of CSC .................................................................................... 56
9.4 Business model of Tele centers in world and in India............................................ 56
9.5 Basic Business Model of CSC .............................................................................. 57
9.6 Business Model developed by SCAs from Field Experience ................................. 58
9.6.1 Cost sharing Business model of CSC.............................................................. 59 9.6.2 Employee Business model of CSC.................................................................. 59
9.7 Framework of CSC’s business model ................................................................... 59
9.7.1 Key Expenses or Cost drivers of CSC............................................................. 59 9.7.2 Revenue sources............................................................................................. 60 9.7.3 Investment size............................................................................................... 60 9.7.4 Critical Success Factors.................................................................................. 60
9.8 Cash Flow Analysis of CSC ................................................................................. 61
9.8.1 Cost detail and Cash Flow Analysis of Jalalpur CSC ...................................... 62 9.8.2 Revenue Inflow Analysis................................................................................ 64 9.8.3 Expenditure or Revenue out flow analysis of CSC.......................................... 68 9.8.4 Cash flow Analysis of Jalalpur CSC............................................................... 68
9.9 Results of Cash Flow Analysis ............................................................................ 70
9.10 Knowledge Based Business Model of CSC........................................................... 71
9.10.1 Main feature of this business model .............................................................. 72
10. Discussion and Suggestions................................................................................. 75
11. Conclusion ........................................................................................................... 79
11.1 The Scope of Further Research............................................................................. 80
References .................................................................................................................... 81
Index of Figure ............................................................................................................ 85
Index of Table .............................................................................................................. 87
Appendix-I ................................................................................................................... 89
Appendix-II.................................................................................................................. 91
Appendix-III ................................................................................................................ 97
Apendix-IV: Publications of Author........................................................................... 99
X
Abstract
Rural India is on the brink of a transformation. An ICT (information and communication technology) driven transformation will unlock the potential of the rural communities and transmute the socio-economic landscape of rural India. The Government of India launched a national e-Governance plan (NeGP) in May 2006. The aim of this plan is to bridge urban-rural divide and to harness ICT for addressing the major socio-economic problems of rural India. Common service center project (CSC: Internet connected service delivery kiosk) is a part of NeGP in which 100,000 CCS will cover all 600,000 villages of India on honey comb model(one CSC cover six villages) is being implemented in a public private partnership (PPP) mode. The CCS seeks to transform rural India by delivering access to e-government services, education, agricultural service, health and telemedicine services, financial, commercial and entertainment services at their door step on affordable prices. These CSCs create new job opportunity to rural people and provide new distribution channel to companies for their products/services in rural market. Each village will transform into knowledge center and CSC will integrate these knowledge centers with world knowledge economy. This thesis described about the technological, service and organisational frame work of CSC. The CSC offered services have enormous market potential in rural India. For tapping this market potential it is important to understand the issues and challenges are encountered during implementation of CSC project. The efforts have been done to identify the factors that determine the sustainability and viability of CSC and analyse these factors through strategic analysis. The four strategic analysis tools-SWOT, Porter’s five forces, Value Chain and business map/eco system of CSC are used in this thesis. The complete cash flow analysis of a CSC has been done in this thesis to quantify and specify the critical success factors that are responsible for sustainability and viability of CSC. The suggestions are floated on the basis of strategic analysis and cash flow analysis to develop a sustainable and viable business model of CSC. This thesis also suggested a long lasting sustainability and profitability model of CSC like knowledge base business model of CSC. This CSC project is a tool for achieving inclusive growth of rural India.
Abstract XI
Abbreviations
B2B=Business to Business B2C=Business to Citizen BPO=Business Processing Outsourcing CSC=Common Service Center CSP=Content and Service Provider DIT=Department of Information Technology GDP=Gross domestic product. ICT=Information and Communication Technology IT/ITeS=Information Technology /Information Technology enables services MMP=Mission Mode Project MIS=Management Information System NREGA=National Rural Employment Guarantee Act NeGP=National e Governance Plan NICNET=National Information Center Network NLSA=National Level Service Agency PC=Personal Computer PPP=Public Private Partnership RTI=Right to Information SCA=Service Center Agency SDA=State Designated Agency SDC=State Data Center SPV= Special Purpose Vehicle
XIII
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1. Introduction India is the 4th largest economy of the world after U.S.A., China and Japan based on purchasing power parity GDP. [1] The country is growing with GDP 8 to 9 % per annum. However, there exists a stark contrast between the rural India and urban India. Indian rural population is yet to experience the basic services like primary education, agricultural extension, health and social services, insurance, telecom and banking services. Fruits of high growth rate are yet to be shared with 740 million deprived rural Indians to bridge the gap between rural India and urban India. During recent years efforts are being made to bridge this gap through the effective use of information and communication technology (ICT). India’s 11th Five Year Plan (2007-2012) structured a new broad based paradigm focussing especially on alleviating poverty by initiating inclusive growth. The plan formulated a national e governance plan (NeGP) with a vision of providing all government services in an integrated manner in “Web-enabled Anytime, Anywhere access” format to rural population at their door step and on affordable cost [2]. As per this plan 100,000 common service centres (CSCs) were proposed to be established during 2008-2013, covering 600,000 villages on honey comb model that is one center cover six adjacent villages. The basic aim of the CSC project is to bridge the development gap between urban and rural India for developing the nation. This gap can be bridge through empowering the rural people and enhancing their income. The access to government services empowering and business services makes access to market to rural people that enhancing their income. These CSCs are a broad band internet enable kiosk for delivering government and private services in rural areas through a private-public-partnership (PPP) model. The CSCs are meant to provide high quality and cost effective video, voice and data content, in the areas of e-Government, education, health, telemedicine, entertainment as well as possible government and private services. The goal of the CSC Project is to empower the rural community and catalyse social change through modern technologies. These CSCs are envisaged to become a vehicle for rural inclusion and inclusive growth to unlock the potential of rural India. In chapter-2 aim, goal, relevance and rationale of the thesis are presented. Chapter-3 describes the methodology and materials used in this thesis work. The conceptual foundation of the study is analysed in chapter four. Here, all relevant concepts and key words are explained under the sub-section literature review. The chapter -5 explain about National e-Governance Plan (NeGP) of India which lay the foundation of Common service Center (CSC) project. The CSC project is one of the integrated mission mode projects (MMP) of NeGP. Common services centers are described in chapter-6. This chapter is divided into two parts. Part –I explain about the technological, organisational and service framework of CSC while part-II highlights about market size and opportunity space for CSC offered services. This part also analyse the customer need and CSC offered services. The Chapter -7 is based on the implementation status of CSC project in India and type of challenges encountered by it. Strategic analysis of CSC project is explained in chapter-8. The objective of the strategic analysis is to identify the core issues and critical success factors that determine the sustainability and financial viability of CSC project. Four strategic analysis tools, namely, SWOT, Porter’ Five Forces, Value chain and Business mapping are used for that purpose.
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The Chapter-9 describes the concept and framework of CSC’s business model with cash flow analysis of a CSC based on primary data collected from the field. This analysis specifies and quantifies the core issues and critical success factors that are identified through strategic analysis of CSC project in chapter-8. Finally this thesis reveals and analyses the prospects of CSCs on rural India and how it may become a vehicle for unlocking the potential of rural India and achieve an inclusive growth.
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2. The Aim, Goal and rationale of the thesis
2.1 Aims of thesis
The aim of the CSCs project is to bridge the development gap between urban and rural India with the view of developing the nation. This gap can be bridge through empowering the rural people and enhancing their income. The access to government services empowering and business services makes access to market to rural people that enhancing their income.
The aims of this thesis are--
(i) To analyse the potential of rural India and how this potential can be unlocked through common services center project.
(ii) Identify the core issues and critical success factors through strategic analysis of CSC project that are responsible for sustainability and profitability of CSC project.
(iii) Specify and quantify the core issues and critical success factors through cash flow analysis of CSCs and float suggestions for developing a sustainable and financially viable business model of CSC.
2.2 Goal
The goal of the CSC project is to empower the rural community and catalyse social change through modern technologies. These CSCs will become a vehicle for rural inclusion and inclusive growth to unlock the potential of rural India.
‘ The goal of this thesis is to make a small contribution to pave the path for sea changes on the socio-economic landscape of rural India by making CSCs sustainable and financially viable, so that CSCs become a vehicle to achieve the goal of the CSC project.’
2.3 Argumentation of the relevance - Why CSCs? — These are following arguments for regarding the relevance of CSCs in rural India to achieve an inclusive growth.
(i) Rural India is at a disadvantage due to lack of access to information, knowledge, credit, livelihood opportunities and market linkages.
(ii) Coping costs of basic services high, therefore low disposable incomes
(iii) Rural India is poor, but not bankrupt – willingness to pay is very high
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(iv)The Government as well as private sector keen to reach out to rural India.
(v) A systematic and structured model that focuses on shared access, rural entrepreneurship and market mechanisms can work wonders.
2.4 Rationale for CSC
The CSC project was launched by Government of India in 2006. The main rationales for CSCs are as follows--
(i) To bridge the Urban and rural developmental and digital divide in India
(ii) Enhancing empowerment to rural people through access to government services/information (e-governance) at their door step.
(iii) Reduce the poverty in rural area through-- (a) increasing job opportunity (b) enhancing empowerment (c) improving financial security. Opportunity makes market work for the poor and expands poor people assets. Empowerment makes state institutions work better for poor people and removes social barriers. Security helps poor people manage risk.
(iv) New access to knowledge, information and education in the remotest part of India. These common service centers (CSCs) will integrate with world knowledge economy through IT/BPO services.
(v) Achieve an inclusive growth in India to include the large proportion of under privilege section of society into growth process. The ultimate goal is to improve the economic condition and improve the living standard of rural people to fuel the growth of India.
(vi) Rural IT skilled work force (trained by CSC offered educational services) should be utilized to trickle down the benefits of IT industry in rural area for an inclusive growth.
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3. Methodology and materials
3.1 Methodology
This study is based on secondary as well as primary sources of data. As a part of secondary sources, several website linked to the common services centers programme including the website of the Ministry of Information Technology (www.mit.gov.in), Government of India, the common service center website (www.csc-india.org) along with several such websites reporting the status of these CSCs including the website of SCAs have been referred. Several research papers, books, reports, journals, newspapers and surveys are also referred. The draft document of CSC-2006, Department of Information Technology (DIT), Government of India; compendium of MMP- 2010, D.I.T, and Government of India are main reports consulted. To understand the market opportunity market size, demand of CSC offered services we used the AC Neilson-ORG MARG survey (2008) and PwC survey results on CSC. Primary data are collected from field through personal effort. A semi structured survey was conducted in rural community and VLEs. Cost data and cash flow data were also collected from VLEs. Semi structured interviews were conducted through internet with all stakeholders of CSC project (government officers, technical, academician, SCA and VLEs). The data were collected from tehsil Anoopshahar, district-Bulandshahar (Uttar Pradesh) India to study the market potential of government services. Primary data are collected from the state of Uttar Pradesh, India to increase the understanding of different issues related to implementation of CSC project and that determine the sustainability and viability of CSC project. The strategic analysis had been performed by using four different tools to identify the core issues and critical success factors that determine its sustainability and financial viability of CSC project. Four tools of strategic analysis SWOT, Porter’s Five Forces, Value Chain and Business Mapping are used for this purpose. The cash flow analysis of a CSC had been done to specify and quantify the core issues and critical success factors that are identified in strategic analysis of CSC.
3.2 Materials
3.2.1 Secondary Sources
The following secondary sources are used for top down market research. These are the available market survey, research, project reports, journals, books and other available relevant secondary sources.
3.2.1.1 Market survey • ANC-MARG market survey on CSC. Base line survey to identify location criteria, basket
of priced services and revenue potential foe CSCs-Uttar Pradesh, India Report, January,
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2008 by ORG Center for Social Research-A division of AC Nielson ORG-MARG Pvt. Ltd.
• Base line survey to identify location criteria, basket of priced services and revenue potential foe CSCs-National Report ,Executive Summary January, 2008 by ORG Center for Social Research-A division of AC Nielson ORG-MARG Pvt. Ltd.].
• Sahaj Seri Village Limited. Sahaj(A SCA) Mitra portal, www.sahajcorporate.com,
access on 25-02-2011
• Market Survey 2008-09, by Indicus Analysis pvt. ltd., New Delhi, web site:
www.indicus.net
3.2.1.2 Interviews • Interview of Shankar Agrawal ,Joint Secretary DIT, GOI available at
Shajcorporation.com
3.2.1.3 News Papers • The Financial Times of India, 11th Feb.2011
• Dainik Jagran Hindi Newspaper
• Dainik Hindustan Hindi Newspaper
3.2.1.4 Research Work • Status of common service center programme in India: Issue, challenges and emerging
practices for rollout. By-Rajanish Das and Atashi Battacherjee-I.I.M. Ahmadabad, India, February 2011, W.P. No-2011-02-03, page 20.
• What role can ICT enabled Governance Reforms play in India’s Development? Dissertation MPA, LSE 2009 ,A dissertation submitted by Dipinder Sekhon to the MPA Programme, London School of Economics and Political Science, in part completion of the requirements for the MPA Public and Economic Policy May, 2009
3.2.1.5 Project Reports • Draft document of CSC, Department of Information Technology, Government of India,
Volume-I,
• Administrative Reform Commission (India) Report, 2008, page. 129
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• Compendium of MMPs 2010,page no99-102,Published by department of information technology, Government of India
• Telecom Regulatory Authority Of India: National Broadband Plan Recommendations on 8th December, 2010,page,61
• U.N. Millennium Development Goals 2010.
• International Telecom Report(ITU),2010
3.2.1.6 Journals
• Transforming Government – government Initiatives in India, Editors: R K Bagga and Piyush Gupta, Published by: The ICFAI University Press, The Icfai University Press52, NagarjunaHills, Punjagutta, Hyderabad, India–500 08, 2009.page33
• Business model analysis by Richard G. Hamermesh, Paul W. Marshall, Taz Piromhamed; January22, 2002, page 1, Harvard Business School Publication No-9-802-048.
3.2.1.7 Books • The world is Hot ,Flat and Crowded by Thomas L. Friedman,2010, New York
• Club of Rome:' No limit to knowledge , but limit to poverty'(2002)
• Can information & communication technology application contribute to poverty reduction? Lesson from rural India by- Simone cchinia & Christopher; Aeclac, United Nation, casillea, Santeago, Chile.
• Transforming Government – government Initiatives in India, Editors: R K Bagga and Piyush Gupta, Published by : The ICFAI University Press, The Icfai University Press52, NagarjunaHills, PunjaguttaHyderabad, India–500 08, 2009.page33
3.2.2 Primary Sources
The primary sources were collected from field to understand the scope of CSC offered services and challenges encountered in the implementation of CSC project. These primary data were collected from the state of Uttar Pradesh in India. The questionnaires were used for conducting the survey among rural people and village level entrepreneurs (VLEs).The interviews were also conducted through internet from all stakeholders of CSC project. All these questionnaires are annexed in annexure number-I, II and III. The cost detail and cash flow data were collected from a CSC. This CSC is situated in village-Jalalpur, district-Raebarelly, (Uttar Pradesh), India. The village level entrepreneur (VLE) of this CSC is Mr. K.K.Anjan, a 22 year old having post
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graduate degree in Economics. The cash flow analysis had been performed on the basis of these data to specify and quantify the core issues and critical success factors that determine the sustainability and financial viability of CSC. The primary data were also collected from the tehsil (a sub –divisional administrative unit) Anoopshahar, district- Bulandshahar (Uttar Pradesh), India to evaluate the market potential of government to citizen (G2C) services for CSCs.
3.3 Limitations
Due to physical distance from Slovenia to India the bottom up study is only possible through internet.
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4. Concept and Literature Review
4.1 Introduction
The literature review discusses published information in a particular subject area and sometimes information in a particular subject area within a certain time period. A literature review can be just a simple summary of the sources, but it usually has an organizational pattern and combines both summary and synthesis. Literature reviews provide us with a handy guide to a particular topic. These reviews also provide a solid background for a research paper/thesis. This thesis is based on the application of information and communication technology (ICT). The CSCs are internet connected services delivery kiosk that provides government and business services to rural people on affordable cost at their door step. The CSC project is empowering the rural people and catalysing the social changes in rural community through ICT. This project is also enhancing the income of rural people by increasing job opportunities for them. This project is bridging the digital divide and developmental divide between urban and rural India that finally leads to achieve an inclusive growth in India. The key words that explain these concepts and ideas are analyzed in the section on literature review. Key Words: Role of ICT, digital Divide, broadband and its impact on economic growth, e-Governance, empowerment, inclusive growth, demographic dividend.
4.2 Role of ICT
Common service centers are an internet connected service delivery kiosk providing government and business services to rural people of India on an affordable cost at their door step. The goal of the CSC Project is to empower the rural community and catalyse social change through modern information and communication technologies. The Club of Rome published a statement in 2002 to World Summit on Sustainable Development 2002(Johannesburg) named as—' No limit to knowledge, but limit to poverty'[3]. This is a compilation of different essays. In that statement the chapter-'The limit to poverty and inequality' emphasised the importance of ICT as—'information and communication technologies are doubly essential for faster growth in developing countries and more eco-friendly growth everywhere. Reducing the digital divide must be therefore become a world-wide priority.' In the statement of Club of Rome under chapter 'Towards a sustainable Knowledge Society' indicates the impact of ICT in society as—'the dynamics of information and communication technology development within the globalised market alone will contribute to general wealth and reduce poverty .Within the right frameworks, it can empower and integrate billions of people, even in the poorest countries; offer new access to education, information and knowledge even in the most remote regions ;help to eradicate poverty and build sustainable
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society.' Thomas L. Friedman famous American journalist wrote in his famous book “Hot, Flat&Crowded”2010-Global economic field become levelled due to personal computers, internet and software and transmission protocol [4] An ICT (information and communication technology) driven transformation will unlock the potential of the rural communities and transmute the socio-economic landscape of rural India. The CCS seeks to transform rural India by delivering access to e-government services, education, agricultural service, health and telemedicine services, financial, commercial and entertainment services at their door step on affordable prices. The CSCs will help lay a solid foundation for economic prosperity of rural India. ICT can reduce poverty by improving poor people’s access to market. [5] Simone Cecchinia and Christopher explained this fact in their book –‘Can information & communication technology application contribute to poverty reduction? Lesson from rural India’- “ICT can reduce poverty by improving poor people’s access to markets. It is clear that in rural India -as well as in much of the developing world- realization of this potential is not guaranteed. Attacking Poverty identifies three priority areas for reducing poverty: increasing opportunity, enhancing empowerment and improving their financial security. Opportunity makes markets work for the poor and expands poor people’s assets. Empowerment makes state institutions work better for poor people and removes social barriers. Security helps poor people manage risk.” Information and Communication Technologies (ICTs) are part of MDG (millennium development goal) and have an impact on other MDGs. The target 18 of goal 8 (Development and global partnership for development) mentions the following: ‘in cooperation with the private sector, make available the benefits of new technologies, especially information and communications technologies. According to UN availability of broadband is important for making important applications available to the population.’ To quote from the millennium development goals (MDG) report- 2010 available on the UN MDG website “... a challenge in bringing more people online in developing countries is the limited availability of broadband networks. Many of the most effective development applications of ICT, such as telemedicine, e-commerce, e-banking and e-Government, are only available through a high-speed Internet connection. But a significant divide exists between those who enjoy fast access to an online world increasingly rich in multimedia content and those still struggling with slow, shared dial-up links.”[6]
4.3 Impact of Broadband on Economic growth
The information and communications technology sector’s contribution to economic growth widely recognized. Experts are of the opinion that the impact of broadband on the GDP is much higher than any other ICT. Broadband is by far the most important element of ICT today, having the largest impact of GDP. It is estimated that a 10 percent increase in teledensity contributes to 0.6 percent of GDP growth. [7] & [8] .The consulting group McKinsey has estimated that- it is estimated that every ten percentage points increase in broadband penetration results in1.38 percentage points’ additional GDP growth in developing countries. [9]
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4.3.1 Global scenario
The importance of broadband has been recognized worldwide. According to ITU, for Governments, broadband is a way of promoting economic development and social benefits. Countries world over have recognized the need for national broadband networks. National broadband network rollout becomes economically viable for two reasons. Firstly, research consistently shows that investment in any ICT has a direct positive effect on GDP growth. Secondly, broadband networks very quickly pay for themselves through the benefits that get delivered across society in many different ways. Several countries worldwide, for example, the US, Japan, Australia, Canada, Portugal, South Korea, Germany, Singapore and Finland have identified broadband as a potential infrastructure, enabling the national economic & social growth. An analysis for the European Commission estimates that broadband can create more than two million jobs in Europe by 2015, and an increase in GDP of at least EUR 636 billion. A study in Brazil reported that broadband added up to 1.4% to the employment growth rate. In China, every 10% increase in broadband penetration is seen as contributing an additional 2.5% to GDP growth. [10] The Internet is largely recognized as a general purpose technology, and broadband is regarded as a basic infrastructure, in the same way as electricity, water or roads. Many even consider the Internet as a“fundamental human right,” and some countries have started to put in place legislation stipulating that access to the internet is a human right for their citizens [11] Finland is the first country in the world to make high-speed Internet access a legal right, obliging operators to provide connections of at least 1Mbps to every citizen. [12]
4.3.2 Indian Scenario
The TRAI report on National Broadband Policy, 2010 [13] state that—“pursuant to recommendations of TRAI, Government formulated Broadband Policy of 2004. In this policy, broadband was defined as an “always on” connection with downloads speeds of 256 kbps or more. There were 0.18 million broadband connections at the end of March 2005. These broadband connections have grown to 10.30 million by the end of September 2010.The number of non-broadband connections till September 2010 was 7.6 million”. The Economic survey of India 2010-2011 gives the picture of broadband growth as--With supportive policies, broadband subscribers grew from 8.77 million as in March 2010 to about 10.71 million up to November 2010. A target of 20 million by 2010 has been set in the broadband policy of India -2004. Government of India establishing 100,000 CSC (internet connected service delivery kiosk) on honey comb model (one CSC covers six adjacent villages) to cover all 600,000 villages of India. The CSC Scheme is to bridge the development and digital divide between urban and rural India with the view of developing the nation. This internet expansion in rural India helps will help laid a solid foundation for economic prosperity of rural India.
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4.4 Digital divide
Digital Divide is meant for “digital divide" between the technology "haves" and the “haves not”. The digital divide now takes into consideration access, or lack of access, to the Internet, as well. In an ever more globalized world, communication and access to information is not a luxury, but a basic right that people must have for human development. ITU Report2010 show the digital divide through the data-internet user per 100 inhabitants-- Internet user per 100 inhabitants is in world in 2010 is (30) while in Europe(65),America(55),CIS(46),Arab states(24.9),Asia-Pacific(21.9) and in Africa(9.6).This data in developed countries is (71.6) while in developing countries(21.1)[14] The digital –divide is clearly depicted from the world wide internet user world’s 75.8%internet user comes from top 20 countries while rest internet user24.2% comes from rest of countries(mostly are developing countries). Internet user’s distribution shows that most of the user from developed world in 2005 but in 2010 developing countries share gradually increasing.China on top position, followed by Amarica,Japan,Brazil&India.[15](World Internet Stats., 2010) . In a report [16](BCG Report,2010) comparing Internet and PC penetration of BRICI countries (Brazil, Russia, India, China, and Indonesia), Boston Consultancy Group states that -“ penetration in India is lowest. Penetration of Internet users(total internet user/total population) in India was only 7%, which is expected to reach 19% by 2015 . Similarly, PC penetration in India was only 4% at the end year 2009, which is expected to reach 17% by 2015.” According to Economic survey of India 2009-2010 total internet user in India till December 2009 was 81 million.[17] In India accessibility of internet expanded fast in recent year with supportive policies, broadband subscribers grew from 0.2 million in 2005 to 10.71 million in November 2010.[18] . According to IMRB&IAMAI I-Cube Report 2009-2010[19]internet user in India---a large proportion of user access internet from office and cyber café--in year 2009 cyber cafe37%, office 30%,home 23%,school/college4% and others 4% .Most of the offices and cyber cafes are situated in urban area. The Confederation of Indian Industries (CII) [20] is point out the slow growth and urban-rural divide of broadband in India. ‘The broadband growth has not only been slow but also biased in favour of urban areas. More than 60% broadband subscribers are in the top ten metros and tier-I cities and more than 75% connections are in top 30 cities. Just 5% of the broadband connections are in rural areas which are meagre compared to about 31% of total mobile telephone connections in rural areas’.[ 21]
4.5 e-Governance
The word ‘governance’ has increasingly replaced ‘government’ in policy literature. It usually refers to the relationships and transactions between the government and the citizens. However, government may still remain responsible for the delivery and regulation. Good governance is usually associated with efficient, productive, high performance, corruption free, transparent, and accountable and increasingly ‘citizen centric’ government. A government truly working in the best interest of citizens, and taking care of their needs and doing so in the most effective and customer friendly manner and at par with services provided by the best in the private sector.[22]
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‘governance’ and ‘ICT enabled governance’ mean more or less the same thing. At times, there is a tendency to limit governance to ‘government websites’ but now Web 2.0 makes interactive with citizen. The potential for ICT enabled governance is immense.
4.5.1 Linkages between ICT, Governance Reforms and Development
ICT, governance reforms and development are linked to each other in different ways. Development is a complex multi-causal phenomenon. Governance reforms are one of the many factors that influencing the development. ICT is linked to development via governance reforms. ICTs have had a much more significant direct impact on development rather than via e Governance initiatives. Phenomenal growth in IT/ITeS in India is the best example. India has around 55% share in world IT/ITeS industry of world. This has led to the creation of thousands of jobs, valuable foreign exchange earnings for the country, boom of other businesses like IT enabled services, BPO/KPO etc. In fact, IT sector has been the poster boy of India’s economic growth story. [23]. However, a large percentage of e- Governance initiatives have been failures - in all developing countries, including in India[24](IIIT-Banglore,2005), [25]( Heeks R.,2004) While no one can deny direct benefits of ICT for Development, one of the major bottlenecks for development in India is the state of governance.
4.5.2 ICT enabled Governance Reforms in India: Facts, Figures
India’s size and diversity makes implementation of nation-wide reform and changes extremely complex and challenging. However, there have been significant progressive shifts over the last 64 years since independence. The Second Administrative Reforms Commission (ARC) constituted in 2005 under the Ministry of Personnel, Public Grievances and Pensions has the broad mandate to revamp the public administration system. The eleventh report of ARC titled ‘Promoting e-Governance: The SMART way forward’ published December 2008 brings e Governance to the forefront of national governance reform efforts for the first time. [26](ARC, 2008) The e -Governance agenda in India at the national level has been articulated in the National e Governance Plan (NeGP) to be implemented at an estimated cost of Rs. 23,000 crores (~ USD 4.66 bn.)9 over five years [27] NeGP was formulated by the Department of Information Technology (DIT) and the Department of Administrative Reforms and Public Grievances (DIT, 2009). NeGP comprises of 27 Mission Mode Projects (MMPs) and 8 core/support components10, and was approved on May 18, 2006. The MMPs include 9 projects in the central government category, 11 projects in state government category and 7 projects in integrated services category as listed in the figure below. The projects are in varying stages of implementation: some are already fully operational, some are being implemented and some are still being conceptualised [28] (ARC, 2008, P.134) CSC is one the integrated mission mode project. The goal of CSC is providing government and business services to rural people on affordable cost at their door step. They will be the end point hubs of government IT
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infrastructure in rural areas, and will provide services in the areas of e Governance, education, health, telemedicine, entertainment etc. as well as other private services. The scheme is being implemented with private sector partnership, and is likely to be completed by June 2011[29] the total approved cost of Rs. 5742 crores (USD 1.44 bn.), 4093 cores (71%) will be provided by the private sector, 856 crores (15%) by the central government and 793 crores (14%) by the state governments. The implementation is being coordinated by a National Level Service agency (NLSA) appointed by DIT, which oversees a 3-tier implementation framework. The framework consists of State designated agencies (SDAs) to facilitate implementation in each state Service centre agencies (SCAs) at the second/middle level (‘franchiser’, for one or more districts) and Village level entrepreneurs (VLEs) to operate the CSCs and service rural customers. The design and PPP model of the CSC project seems to suggest that lessons learnt from past projects and previous phases and pilots have been taken into account. The story of telecentre/CSC movement in India (CSDMS, 2008) is significant because it is the first ICT4D intervention of its kind, truly designed to reach each and every village in India. It evolved over the last two decades since 1990s beginning with an era of conceptualisation by the likes of Prof Jhunjhunwala and M S Swami Nathan [30] (MSSRF,2004,June) followed by an era of experimentation by players like Drishtee, TARAhaat, n-Logue etc. and now the implementation era with NeGP’s CSC programme[31]
4.6 Inclusive Growth
In recognition that the country’s development is unsustainable if it fails to include the large proportion of disenfranchised population into the growth process; the Government of India has integrated “inclusive growth” as the conceptual corner stone of its 11th Five Year Plan. The entire underprivileged section is the potential user of ICT. The TRAI Report Broadband 2010[32] states that—‘the inclusive potential of ICT is evident at two levels: the benefits that it brings to poorer communities and the capacity of individuals within these communities to participate in new economic opportunities. ICT, particularly broadband, is, therefore, seen as a powerful tool for inclusive growth’. There is an urgent need for a nation-wide Broadband network to reach Education, healthcare, banking and other services to all the villages of India. Such a network would truly help in realising the objective of inclusive growth. Common service centres (CSC) schemes is mile stone in achieving this goal. [33] The Eleventh Five Year Plan (2007-12) of India highlights the need for inclusive growth. In the Foreword to the Eleventh Five Year Plan document, Hon’ble Prime Minister of India emphasised --the need to ensure the growth is widely spread so that its benefits, in terms of income and employment, are adequately shared by the poor and weaker sections of our society. For this to happen, the growth must be inclusive in the broadest sense. It must occur not just in our major cities but also in our villages and small towns. [34]
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4.7 Financial Inclusion
The 11th five year plan talks about inclusive growth. It an not be realized without financial inclusion. Financial inclusion is a crucial part of development. There are close to 47,000 bank branches across the country. However, access to credit and institutional finance have still not reached the mainstream population including 48% of all households, 51% of farm households and 78% of non-farm households who are not included in the organised banking system.[35] (Koccher, Sammeer, 2010) 100,000 CSCs, manned by local entrepreneurs (VLEs) and operated by qualified private franchisees (SCAs), can act as the catalysts for extending banking services at the last mile. For Banks, the CSCs represent a huge opportunity of an organized network that can full fill their vision and goals of financial inclusion in rural India. RBI has issued a formal Circular on appointment of ‘Business Correspondents’ and Facilitators -to ensure greater financial inclusion and to increase the outreach of banking activities in rural areas. Such a model offers a perfect fit for banks to integrate and extend their outreach through the CSCs. [36] (Bhargwa, Alok, 2007) The VLEs are using the credit cards to undertake the following activities for the villagers: booking of online railway tickets, booking of airline tickets online shopping for watches, cameras etc.
4.8 Demographic Dividend
ICT has brought rural areas much closer to the markets and has improved business transactions. India’s technological capabilities and rising exports in information technology (IT) have been one of the major drivers of growth. Goldman Sachs Economic Research paper on “India’s Rising growth Potential” (Global Economics Paper No: 152) dated January 22, 2007 indicates that India’s GDP (in US$ terms) will surpass that of the US before 2050, to make it the second largest economy.[37] The underlying assumption in continuation of the growth story is that growth-supportive policies are continued to be implemented. The cited report emphasizes that to continue growing, India will have to educate its children and its young people (especially its women). Lack of education can be a critical constraint to the growth of the knowledge-based IT sector, as well as in the move to mass employment in manufacturing. It is important to educate people to take the advantage of the demographic dividend. The demographic dividend arises from the fact that more than 50% of its population of India is below the age of 25 and more than 65% hovers below the age of 35. This makes India one of the youngest countries in the world. It is being increasingly recognized that what matters is not the size of the population, but its age structure. A population "bulge" in the working age groups (15-64 years), however large the total population, is an inevitable advantage. Thus, India, which is beginning to be characterized by such a bulge, is seen as advantaged, despite its large population. [38] Common services centres provide access to education, IT educations and English skill in rural area. India have the biggest English speaking people in the world around 330 million. This gives the edge to India in world IT/ITeS industry of the world.
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Figure 1: Changes in population pyramid --India (1971-2016)
Source: TRAI National Report on Broadband, December, 2010.
4.9 Internet connected service delivery kiosk scheme in other part of world.
Countries across the world are increasingly adopting e-government initiative through telecenters in an effort to reach out to their citizen provide them access to various government services, is a commonplace knowledge. The telecenters are not a new phenomenon in developing countries. As early as 1994 the Buenos Aires Action Plan called for multipurpose community telecenters in rural remote areas. Different states of India also implemented such type of project like Gyandoot in Madhya Pradesh, Lokvani in Uttar Pradesh, Bhoomi and Nemadi project in Karnatka and KRIPs in state of Gujrat. CSC project is formulated with assimilating the failure and success of these projects. The CeC of Philippine is very similar to CSC project.
4.9.1 Comparison between CSC, s of India to CeC, s of Philippines
Government of Philippines implemented Common e Centres(CeC) with the use of killer applications – i.e., applications and services that create a high and pro-poor developmental impact, and encourage replication. This is important for the long-term sustainability and viability of Community e-Centers (CeCs) in the Philippines.These centres are very similar to the common service center of India. These include, particularly, services that residents find relevant enough that they are willing (and able) to pay for their use, such as Internet access, communications
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software and productivity suites. It also covers other services such as photocopying and CD replication that, while not necessarily Internet or computer-related, do provide CeCs with additional sources of revenue that help ensure their survival, especially in rural and unnerved areas. The Philippine Government, particularly Local Government Units (LGUs), have utilized the CeC model to offer various e-governance services. [39] CeC & CSC are the conduit of e-governance; both are based on private-public participation model (PPP model) and are operated on government push top- down approach but in future they develop on community pull bottom-up approach. CeC and CSC‘s success will depend on following parameter-citizen’s empowerment; citizen’s participation; accountability& transparency and sustainability. CeC& CSC helps to brings governments closer to the people in a more efficient, transparent& accountable way.
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5. National e Governance Plan (NeGP) of India
5.1 Introduction
e-Governance is the interweaving of government development processes with a range of modern information processing and communication technologies (including the Internet, Local Area Networks, mobiles etc.) to improve effectiveness, efficiency and service delivery while promoting democracy by making them equitably available to all. But why do we need e-governance? e- Government can transform citizen service, provide access to information to empower citizens, enable their participation in government and enhance citizen economic and social opportunities, so that they can make better lives, for themselves and for the next generation. [40]. E-Governance is increasingly being viewed as the route for governments to strengthen good governance, for it not only improves efficiency, accountability and transparency of government processes, but it can also be a tool to empower citizens by enabling them to participate in the decision-making processes of governments. [41].Services provided through the various e- Government initiatives assist governments in reaching the yet ‘unreached’ and thereby contribute to poverty reduction in rural and remote areas by increasing access to critical information and opportunities. At the same time, this process also enables involvement and empowerment of marginalized groups through their participation in the government process. Over the past decade or so there had been islands of e Governance Initiatives in the country at the National State district and even block level .e.g. Gyandoot, Bhoomi, Lokvani, Dhristi , Jan Seva Kendra etc. Some of them had been highly successful and were ready for replication across other States while some have not produced the desired results or withstood the test of time. Experiences from successes as well as the failures of the various initiatives played an important role in shaping the e Governance strategy of the country. The government of India launched National e Governance plan (NeGP) in May 2006.This chapter cover the goal, vision and strategy of NeGP and also the framework of NeGP and its core components. Common service centres are the one of the integrated MMPs. How NeGP laid the foundation and infrastructural support to CSC project.
5.2 NeGP: Goal, vision, strategy and framework
The National e-Governance Plan (NeGP), is the flagship e-governance programme of the Central government. The plan lays the foundation and provides the impetus for the long term growth of e governance with in the country. The plan seeks to create the right governance and institutional mechanism, set up the core infrastructure and policies and implement a number of mission mode projects (MMPs) at the center, state and integrated services levels to create a citizen centric and business centric environment for governance. [42] NeGP’s goal is the provision of improved, more convenient government services countrywide through on-line delivery at local service centers. NeGP takes a holistic view of e-Governance initiatives across the country, integrating
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them into a collective vision, a shared cause. Around this idea, a massive countrywide infrastructure reaching down to the remotest of villages is evolving, and large-scale digitization of records is taking place to enable easy, reliable access over the internet. The ultimate objective is to bring public services closer home to citizens, as articulated in the Vision Statement of NeGP. “Make all government services accessible to the common man in his locality, through common service delivery outlets, and ensure efficiency, transparency, and reliability of such services at affordable cost to realise the basic needs of the common man” [43].
5.3 Strategy of NeGP
The strategy of NeGP contains the following elements- (I)Centralized initiative, decentralize implementation. (ii)Identify services to be targeted (iii)Prioritize services (Mission); identify measurable goals (out comes) (iv)Create mechanism for effective private sector participation (v)Put in a place a common infrastructure, policies, standards and framework. (vi)Service delivery through CSCs (vii)Think big, start small and scale fast (viii)All services supported by three infrastructure pillars to facilitate ‘web-enabled, anytime, anywhere access’ connectivity: state wide area network (SWAN/NICNET); national data bank/state data centers (SDCs); CSC- The primary mode of service delivery channel
5.4 Framework of NeGP
The framework of e Governance consist three part—back-ends, middle ware and front end service delivery channel (e.g. national/state data centers). The back-ends includes data base of different government agencies, service providers, state government etc., while middle ware comprises of communication and security infrastructure, gateways and integrated services facilitating of interdepartmental services(e.g. SWAN). The front end delivery channel consist of home PCs, mobile phone, kiosk, integrated citizen services centers like CSCs
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The figure2.-Framework of National e-Governance Plan (NeGP.
Source: The e Governance Approach in India: The National e Governance Plan (NeGP) By Dhrupad Mathur, Piyush Gupta and A. Sridevi, 2009]
5.5 Component of NeGP
A major initiative of the Government for ushering in e-Governance on national scale, called National e- Governance Plan (NeGP) was approved on 16th May 2006. NeGP consists of 27 Mission Mode Projects (MMPs) encompassing 9 central MMPs, 11 State MMPs and 7 integrated MMPs that span multiple backend Ministries/ Departments. It also includes 8 program support components aimed at creating the right governance and institutional mechanisms, core infrastructure, policies & standards and the necessary legal framework for adoption of e-Governance in the country. It is implemented at the Central, State and local government levels. [44] The e Governance agenda in India at the national level has been articulated in the National e Governance Plan (NeGP) to be implemented at an estimated cost of Rs 23,000 crores (~ USD 4.66 bn.) over five years [45]. NeGP was formulated by the Department of Information Technology (DIT) and the Department of Administrative Reforms and Public Grievances. [46]. NeGP comprises of 27 Mission Mode Projects (MMPs) and 8 core/support components. These 8 components are as follows-- (i) Core policies (ii) Core Infrastructure (SWAN, SDCs etc.) (iii) Support Infrastructure (CSCs etc.) (iv)Technical Assistance (v) R&D (vi)Human Resources Development and Training (vii) Awareness and Assessment (viii) Organisation Structures
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5.5.1 Mission Mode Projects
The MMPs include 9 projects in the central government category, 11 projects in state government category and 7 projects in integrated services category as listed in the table--- below. Table 1. India’s NeGP: Scope of Output (Mission Mode Projects). Mission Mode" implies that the objective and the scope of the project are clearly defined, that the project has measurable outcomes and service-levels, and the project has well-defined milestones and timelines for implementation. MMPs are owned and spearheaded by various Line Ministries concerned for Central, State, and Integrated MMPs. The concerned Ministry/ Department is entirely responsible for all decisions related to their MMPs. [47]
Table 1: Scope of NeGP and mission mode projects (MMP) of NeGP
Services
Central
State
Integrated
Services to
Citizens (G2C)
• Income Tax
• Passport, visa and immigrat
ion • E-Posts
• Land records • Property registration • Road transport • Agriculture • Municipalities • Panchayats • Police • Employment
Exchange • Education • Health • Food Distribution &
other welfare programs
• Common Services Centers(CSC)
• State Wide Area Network SWAN: fiber
• All India Portal • National Service
Delivery Gateway(NSDG)National E-Governance Gateway
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Services to
Business (G2B)
Excise Company affairs
• Commercial Taxes
• EDI- Electronic Data
Interchange (for trade, E-Commerce)Custom
foreign trade • E-Biz
• E- Procurement
Other
• National ID
• National GIS for planning
• Treasuries
• E-Courts
Source: The e Governance Approach in India: The National e Governance Plan (NeGP) By Dhrupad Mathur, Piyush Gupta and A. Sridevi, 2009 The projects are in varying stages of implementation: some are already fully operational, some are being implemented and some are still being conceptualised [48]
5.5.2 Core Infrastructure:
All services supported by 3 infrastructure pillars to facilitate web-enabled Anytime, Anywhere access-
5.5.2.1 Connectivity: State Wide Area Networks (SWANs)/NICNET The establishing Wide Area Networks in all States and UTs across the country, from the Head quarter of each State/UT to the Blocks. It would serve in providingG2GandG2Cservices, especially for the various Mission Mode Projects.-
5.5.2.2 National Data Bank/ State Data Centres (SDCs) The State Data Centres (SDCs) would consolidate data, services, applications and infrastructure to provide efficient electronic delivery of G2G, G2C and G2B services across the state and departments. They will be seamlessly interconnected with Common Services Centres (CSCs) up to village level via minimum 2 Mbps State Wide Area Networks (SWANs). Its key functions would be to act as the Central Repository of the State provides secure data storage, disaster recovery and remote management functions etc.
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5.5.2.3 Common Service Centres (CSCs): primary mode of delivery The front –end interface of the scheme with rural citizen is common service center through which the government services would be delivered along with value added services.
Figure 3: Core Infrastructure of NeGP
Source: Compendium of MMPs 2010, Published by department of information technology, (DIT) Govt. of India http://www.mit.gov.in/sites/upload_files/dit/files/Compendium_FINAL_Version_110211.pdf access on 16-05-2011
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5.6 Conclusion:
e Governance in India is progressing well with participation of government as well as private actors. Things have begun to be systematically coordinated at the national level with the National e Governance Plan (NeGP). As the NeGP has been developed jointly by Department of Information technology-India (DIT) and Administrative Reforms Commission (ARC), there is a fair amount of alignment of e Governance plan with the overall governance reform agenda. While NeGP is a central plan, it is being implemented in a decentralised fashion by both public and private actors. Several projects in the NeGP are in fact ideas which originated as state or local government initiatives, and which were deemed fit to be replicated all over the country. The projects are in varying stages of implementation- some are already fully operational, some are being implemented and some are still being conceptualised .Common service center is an integrated MMP is successfully under the implementation. Till 30thApril 94,000 CSC has been rollout. Framework and core infrastructure of NeGP are supporting the CSC project and playing vital role in its roll out process.
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6. Common Service Centres: The Front End Service Delivery Channel
6.1 Introduction
The Government has approved the Common Services Centres (CSC) Scheme for providing support for establishing 100,000 Common Services Centres in 600,000 villages of India. The Scheme envisions CSCs as the front-end delivery points for Government, private and social sector services to rural citizens of the country in an integrated manner. It has been decided that the Common Services Centers will be suitably repositioned to be a network of Panchayats level Bharat Nirman Common Services Centers, to provide Government services to the citizens in rural areas. [49] The objective is to develop a platform that can enable Government, private and social sector organizations, to align their social and commercial goals for the benefit of the rural population in the remotest corners of the country through a combination of IT-based as well as non-IT based services. The Scheme has been approved at a total cost of Rs. 57,420 crore( one Crore=10 million) with the Government of India contribution being Rs. 856 crore and State Governments contribution being Rs. 7,93 crore. [50] The balance funds would be brought in by the private sector.
6.2 Goal, Objectives and Characteristics of CSC
The CSC is a strategic corner stone of the National e-Governance Plan (NeGP), as part of its commitment in the National Common Minimum Programme to introduce e-governance on a massive scale. The CSCs would provide high quality and cost-effective video, voice and data content and services, in the areas of e-governance, education, health, telemedicine, entertainment as well as other private services. A highlight of the CSCs is that it will offer web-enabled e-governance services in rural areas, including application forms, certificates, and utility payments such as electricity, telephone and water bills. [51] The project creates a healthy environment for the private sector and NGOs to play an active role in implementation of the CSC project, thereby becoming a partner of the government in the development of rural India. The private public partnership (PPP) model of the CSC scheme envisages a 3-tier structure consisting of the CSC operator (called Village Level Entrepreneur or VLE) the Service Centre Agency (SCA), that will be responsible for a division of 500-1000 CSCs and a State Designated Agency (SDA) identified by the state government responsible for managing the implementation over the entire State.
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6.3 Technological Framework of CSC
6.3.1 Three Pillars of CSC’s Infrastructure
Technological framework of CSCs is based on the core infrastructure of National e Networks (SWANs), State Data Centres (SDCs) and Common Services Centers (CSCs). All services are supported by 3 infrastructure pillars to facilitate ‘web-enabled anytime, anywhere access’. Technological framework of CSCs is based on the core infrastructure of National e Networks (SWANs), State Data Centres (SDCs) and Common Services Centers (CSCs). All services supported by 3 infrastructure pillars to facilitate web-enabled Anytime, Anywhere access. The Government has approved the project for establishing State Wide Area Networks (SWANs) across the country. SWANs are connecting all State/UT headquarters up to the block level via district/sub divisional headquarters, in a vertical hierarchical structure with a minimum bandwidth capacity of 2Mbps per link. The State Data Centre (SDC) Scheme is for establishing data centres across 35 States/UTs across the country was approved by the Government on 24th January 2008, over a period of 5 years. The concept is to create State Data Centres (SDC) for the states to consolidate infrastructure, services and application to provide efficient electronic delivery of G2G, G2C and G2B services. These services can be rendered by the states through common delivery platform seamlessly supported by core connectivity Infrastructure such as State Wide Area Network (SWAN) and Common Services Centre (CSC) at the village level. The Common Service Centres (CSCs) are the primary mode of service delivery. The Government has approved the Common Services Centres (CSC) project for providing support for establishing 100,000 Common Services Centres in 600,000 villages of India. The Scheme envisions CSCs as the front-end delivery points for Government, private and social sector services to rural citizens of India, in an integrated manner. There is a National Data Center (NICNET) which is connected to all government department and agencies of central and state government of India. All 28 state government and 7 union territories of India have a State Data Center (SDC), connected with NICNET. Main role of SDC are securing and hosting of data and its application. Its key functions would be to act as the central repository of the State, provide secure data storage, disaster recovery and remote management functions etc. These would consolidate services, applications and infrastructure to provide efficient electronic delivery of government to government(G2G) , government to citizen(G2C) and government to business(G2B) services through common delivery platform seamlessly supported by the State Wide Area Network (SWAN) connecting up to the villages through the Common Service Centres (CSCs) with speed 2mbps.State Wide Area Network(SWAN) is serving government to government (G2G) services and government to citizen services(G2C), especially for various mission mode projects(MMPs) of National e Governance Plan(NeGP) like CSC. Once all the CSCs are established and all the Government service delivered online, the utility of broadband will increase for rural masses. ‘The CSCs are envisaged to provide high quality and cost effective video and data services in the areas of e-governance, education, health, agriculture, entertainment as well as other private services. As the video content are supposed to consume sizable bandwidth, the bandwidth requirement for each CSC would be approximately 2
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Mbps, which may increase in future. Common service centres (CSCs) are broad band enable service provider kiosk having at least following technical infrastructure-two P.C.s/laptop ,two printer(inkjet+ dot matrix),web/digital camera, wireless connectivity ,bio metric devices ,UPS/invertor/ generator and further technical infrastructure may be enlarged and upgraded. CSCs technology is unique in compare to other players(like cyber café ,e- kiosk of private companies) in the market who providing web based government to citizen(G2C),business to citizen(B2C) and business to business(B2B) services to citizens .Broad band speed is quite high in compare to others. CSCs have access to government services and portals while other market players have not such type of access.
Figure 4: Technological framework of CSCs
Source: upgov.nic.in (Web site of Department of IT& Electronics, Govt. of Uttar Pradesh, India CSCs have a technical infrastructural support of NICNET, SDC and SWAN while other market players have not get access to high quality technical infrastructure. CSCs have an legal sanctity on other hand other can’t get such recognition, so the credibility of CSCs are more in society in compare to other market players. CSCs technology offers integrated services from single window .Dimensions of the application of CSCs technology are very wide. These CSCs are becoming the vehicle of inclusive growth in rural area and bridging digital divide between rural India and urban India. They are the end point hubs of government IT infrastructure in rural areas, and will provide services in the areas of e Governance, education, health, telemedicine, entertainment etc. as well as other private services. The CSCs themselves have been envisioned not just to provide IT hardware and services, but also to encourage rural empowerment, entrepreneurship, knowledge economy and inclusive growth in rural India.
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6.4 Organisational Framework of CSC
The CSCs scheme is being implemented with private sector partnership (of the total approved cost of Rs. 5742 crores (USD 1.44 bn.), 4093 crores [one crore=10 million] (71%) will be provided by the private sector, 856 crores (15%) by the central government and 793 crores by state government. [52] The implementation is being coordinated by a National Level Service agency (NLSA) appointed by Department of Information Technology, Government of India( DIT), which oversees a 3-tier implementation framework. The framework consists of state designated agencies (SDAs) to facilitate implementation in each state, service centre agencies (SCAs) at the second/middle level (‘franchiser’, for one or more districts) and village level entrepreneurs (VLEs) to operate the CSCs and service rural customers.
Table 2 : Stake holders of CSC project and their role.
Stakeholder Level Role
State Designated Agency (SDA)
Nodal Agency at State Level
Monitoring & Supervision
Service Centre Agency(SCA) Implementing Agency Investor and prime mover
Village Level Entrepreneur(VLE)
Local Level Entrepreneur Actual Operator at CSC level
At the first level the agency designated by the state is the State Designated Agency (SDA)-to facilitate implementation of the Scheme within the State and to provide requisite policy, content and other support to the SCAs .At the middle level is an entity termed as State Service Agency (SCA-loosely analogous to a franchiser) to operate, manage and build the village level network of CSCs and business. They are the prime driver of this scheme. At the third level there are the local Village Level Entrepreneur (VLE-loosely analogous to a franchise), to deliver the service to the rural consumers in a cluster of six 6 villages. VLEs are selected by SCAs.
6.5 Service Framework of CSC
The CSC Scheme as approved by Government of India in September 2006 for setting up of 100,000 internets enabled centers in rural areas under the National e Governance plan (NeGP) is being implemented in a public private partnership (PPP) mode.
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6.5.1 Approach of Services Framework
6.5.1.1 Bottom up approach The common services centers (CSCs) are proposed to be the front end delivery points for Government, private and social sector services to rural citizens of India at their doorstep. 'The CSC Scheme is envisaged to be a bottom-up model for delivery of content, services, information and knowledge, that can allow like-minded public and private enterprises through a collaborative framework to integrate their goals of profit as well as social objectives, into a sustainable business model for achieving rapid socio-economic change in rural India’[53] It is the community participation and collective action, not ICT alone, which will lead to a behaviour change for a sustainable socio-economic change and long-term rural prosperity.
Figure 5: Selected Service Center Agency (SCA) state wise detail
Source: website www.csc-india.org as access on 15th May2011.
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6.5.1.2 End-to-End Services The key driver for the selection of content and services would be their end-to-end applicability. This means that a specific content/ service should be in a marketable format for it to be selected as a part of the service network in the CSCs. Broadly, the services selection would be on their ability to impact the consumer through the saving cost, helping income generation and enabling socio –economic generation.
Figure 6: Service framework of CSC
Source: State level workshop on e-Governance (17th April2008) at Luck now, Uttar Pradesh, India organised by department of IT& Electronics, Government of Uttar Pradesh, India.
6.5.2 Services offered by CSC
CSCs are offering government ot citizen(G2C),business to citizen services(B2C) and business to business(B2B) service to rural people as well for government and private companies.
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Table 3. Type of services offered by CSCs
G2C:Government to Citizen services • Land records • Registration of vehicles • Issue of certificates • Government schemes • Employment exchange • Ration cards • Electoral services • Pension schemes • Road transport • Public grievance • Utility/ Telephone Bills (Government
undertakings)
e-Government Services- • Market Linkages • Education • Healthcare • Agricultural ,Extension etc. , • Data collection • Rural BPOs • Rural banking
(B2C) services (i) Commercial Services-
• Digital photos • web surfing • photocopy& DTP • e-mail/chats • CD burning • Typing& printing, • games • forms downloads • Utility/telephone bills (private
enterprises). (ii) e-Commerce/Online Services –
• Railway tickets • Astrology • Matrimonial & Resume • Shopping
(iii) Education Services-IT education, English skills training, tuitions. (iv) Entertainment-DTH, community TV. (v) Telemedicine- Primary healthcare. (vi) Agriculture Services-Agriculture-inputs, agriculture –loans, agriculture –consulting and
Business-to-Business services (B2B)
• Advertising & promotion services • Marketing ,Promotions • Data collection services • Research data collect • Data entry • Distribution services • FMCG products • Financial services, loans/deposits,
referrals, insurance etc.
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6.6 Opportunity Space/Market Potential of CSC Project
As above mention service framework of CSCs offered service itself reveals the opportunity space for CSCs. These services are empowering the rural people and bring transparency and accountability in government functioning, creating new job and enhancing their income. The services are also providing new access to education, knowledge, micro- financing, agriculture extension and health Services. They are expected to catalyse the social change and social development. This market linkage is opening new economic opportunity and also providing new distribution channel for products and service in rural area. These CSCs are emerging as a village knowledge centers providing IT and vocational education to rural youth. These IT educated youths become valuable human resources for exponentially growing IT/ITeS outsourcing industry in India. This cheap and qualified human resource will contribute in national economy and in that way IT /ITes industry will penetrate in deep rural area of India. Summarily, these CSCs offered services are enabling to create long lasting prosperity in rural India.
The Neilson-ORG Survey report on CSCs published in the month of January 2008 clearly explains the opportunity space for CSCs and service uses pattern and its response in rural India. The survey was conducted in 2006 in all the states of India.The average monthly income of surveyed people was found Rs.4737. The report provided a conservative estimate of the total expenditure that a household could spend on CSC offered different services at 6.75% of a mean monthly expenditure of Rs. 4739. This implies that the amount available for CSC transaction is Rs. 320 per month per person.[54] Sahaj Srei Sahaj e-Village Pvt. Ltd ( a SCA) estimated in 2008 that rural Indians spend Rs.639 per month on CSCs offered services. Average population in the catchment area of one CSC is 8159 on the basis of population of India in 2007 (total population of India 1.02 billion). So total opportunity per CSC per month is worked out around Rs. 52,13,601(5.2 million rupees.) [55] Hence the total opportunity available for 1,00,000 CSCs per month in country is around Rs.521 billion. Presently on an average only 5% to 10% opportunity is tapped by one CSC.
6.6.1 Analysis of CSC Offered Services and Customer need
Services offered through CSCs are empowering the rural people and enhancing the income and meeting the social goals by providing access to agricultural health, finance related services and education .CSCs are opening new distribution channel to different product and services to under tapped rural market.IT/ITeS and rural BPO/KPO are generating wealth and increasing the wealth of nation. ACN ORG survey conducted (on CSC) in 2006 explains the service uses and coping costs on transportation in rural areas. This survey explains the service uses and coping costs on transportation in rural areas. This report reveals that –‘ rural Indian people spend maximum expenditure on transport to avail these three services namely-agriculture related services, health related services and education.’ The report also explains the buyer’s preference on services offered by CSCs on 100 households (roughly 500 population) geographical and demographical unit. It suggests an optimum population in the catchment area of one CSC is8159.
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The basket of CSC’s services is described as the top revenue generating services as per the report.
6.6.2 e-Government Services
In our own survey of CSCs conducted in Uttar Pradesh most of the respondents admitted that they spend around Rs. 200 to. Rs. 300 to get a certificate from government offices and spent time of between one day to 7 days. Table No 4 : Government to Citizen services(G2C) issues from Tehsil Anoopshahar, District: Bulandshahar(U.P.),India Tehsil-Anoopshahar(U.P.)
Name of e Government Services Number of User in year 2010 (01-01-2010 to31-12-2010)
1 Land Records(Khatuni: Records of Right) 32,440 2 Residence/Domicile certificate 3,304 3 Caste Certificate 8,761 4 Income Certificate 16,468 Total 60,973
Source :Tehsil office Anoopshahar(district-Bulandshahar),Uttar Pradesh-India Presently a citizen takes this certificate from tehsil head quarters. They travel around 15 to 20 kilometre and lose their wages for one day which comes on an average to Rs. 120. They also spent on travel, snacks and processing charges. Generally people spent around Rs. 200/ to Rs. 300 directly or indirectly for getting one certificates. These services may be delivered from CSCs when they become functional. In this case official charges for land record will be Rs.25, for caste/residence and Income certificate it will be Rs. 20 and State government charge for land record Rs.10. Accordingly, the total income generated from these four services works out to be Rs1,057,260. There are 18 CSCs in this tehsil, so income generated by one CSC in one month from these four e Government services comes to Rs 4894. This is a sizable amount for sustaining a CSC owner. Government of Uttar Pradesh included total 35 government services in the basket of CSC offered services. This study indicates that CSCs can easily sustain as soon as these services add in CSC offered services list. In conclusion, these CSC offered e Government services would not only save money and time but also empower rural people and bring them closer to government. This citizen –government interface will lead to develop the faith in government and induce government machinery to become more accountable and transparent.
6.6.3 B2C services and B2B Services
Table 5 clearly indicates that lion’s share of revenue generation comes from computer, vocational education and tuition. ANC ORG survey on educated village youth in Uttar Pradesh
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reveals that -“Across the habitations under survey, on an average there are 148 persons who are in illiterate or just literate category. Among the literates, on an average, 104 youths have studied up to 10th class, while 94 youths have studied up to 12th class. The average number of professionals emerged as 60 youths in sample villages of Uttar Pradesh. Of those who attained some professional education, 38% were employed as professionals and 7% were service (govt., private or tuitions). However, 32% such professionally qualified were still engaged in cultivation or in some kind of labour work.”[ 56 ]These 32%professional educated youth can enhance their skill through CSCs offered vocational education , computer education and English speaking course . The IT educated youth then becomes a prime driver of emerging rural economy of India. If major Indian IT/IteS companies expand their network up to CSC level through SCA then this IT skilled manpower would be able to deliver more profit as their wages is quite low as compared to metro cities of India. Indian IT/IteS industry can take leap frog in the world of IT/IteS industry and penetrate at grass root level of rural India. Profit of outsourcing will be trickle down in the rural society. In brief, long lasting rural prosperity may be achieved through information superhighway and CSCs may acts as vehicle of inclusive growth.
Table : 5 Top 80% Revenue Generating Services of CSC
Source- Base line survey to identify location criteria, basket of priced services and revenue potential of CSCs-National Report ,Executive Summary January, 2008 by ORG Center for Social Research-An division of AC Nielson ORG-MARG Pvt. Ltd.
Services Annual Revenue for 100 household size villages (Rs.)
Basic Computer Training 9491 Telemedicine 2955 Vocational education 2171 Land Records 1955 Application for New Passports/Change of name, address 1687 All tuitions 1563 Ticketing – Rail/Road/Air 1225 Agricultural consultancy & marketing facilities to the farmers for their produce 1167 Entertainment – movies 1112 Certificates available outside GP (Residency/caste/income/marriage/power of attorney/unemployment/disability certificate) 1105 Grievances 1066 Payment of all bills 992
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CSCs have a potential to become the gateway for tapping the rural market by way of offering different product and services. Indicus Analysis Pvt. Ltd., New Delhi survey report 2008-09 explains that one sector that continued to gain steady despite of economic slowdown was the market of personal care and home care product. Main reason for this growth trend was these companies have discovered rural markets, which now contribute a little more than half the total sale for such products in the country.”[57] The survey indicates that under tapped rural market of India have enormous potential. Domestic computer hardware and software industry can also flourish. If companies smartly use the CSC channel, certainly their balance sheet shows encouraging result for them. In nut shell one can infer that CSCs offered services have enormous potential in economic terms as well as in social form. CSC empowers the rural people through government services and save their money and time. It creates new jobs and helps in poverty reduction. It also offers new access to financial, agricultural and health related services as well as new knowledge, information and education. Rural human resources become more productive due to proper access to this service, make them more productive to contribute in nation’s economy. In this way India is able to harness its demographic dividend specially in IT/Ites outsourcing world Industry. Finally, CSCs may become the key to unlock the potential of rural India.
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7. Challenges and Issues in CSC Project’s Implementation
7.1 Implementation Status
The CSCs scheme is being implemented with private sector partnership (PPP Model) (of the total approved cost of Rs. 57.42 billion (USD 1.44 bn.), Rs.40.93 billion [one crore=10 million] (71%) will be provided by the private sector, Rs. 8.56 billion (15%) by the central government and R.7.93 billion by state governments. The implementation is being coordinated by a National Level Service agency (NLSA) appointed by Department of Information Technology, Government of India( DIT), which oversees a 3-tier implementation framework(SDA,SCA and VLE). The framework consists of State designated agencies (SDAs) to facilitate implementation in each state, Service centre agencies (SCAs) at the second/middle level (‘franchiser’, for one or more districts) and Village level entrepreneurs (VLEs) to operate the CSCs and service rural customers. State wise progress of CSC roll out as on 30th April 2011 is shown on the map of India. As on 30th April 2011, a total of 94,786 CSCs have been rolled out in thirty one States/UTs. 100% CSCs have been rolled out in 12 (Twelve) States (Chandigarh, Delhi, Goa, Gujarat, Haryana, Jharkhand, Kerala, Madhya Pradesh, Manipur, Pondicherry, Sikkim & Tripura). More than 70% of the rollout has been completed in 13 (Thirteen) States (Assam, Arunachal Pradesh, Bihar, Chhattisgarh, Himachal Pradesh, Maharashtra, Meghalaya, Mizoram, Nagaland, Orissa, Tamil Nadu, Uttaranchal and West Bengal). In about 3 (Three) States (Jammu & Kashmir, Rajasthan and Uttar Pradesh) implementation of CSCs have crossed half way mark (more than 50%). It is expected that the roll out of 100,000 CSCs would be completed by June 2011.A total of about 14,236 CSCs have been affected due to termination/ re-bidding. 8,785 CSCs have been affected due to SCA termination in 6 States. These States are Andhra Pradesh, Bihar, Haryana, Mizoram, Tamil Nadu and Uttarakhand. About 5451 CSCs have been affected due to delay in the SCA selection process in the States of Andaman, Karnataka and Punjab. [58]
7.2 Challenges and Issues in the Implementation of CSC Scheme
7.2.1 Delay in deployment of G2C services
G2C services plays pivotal role in CSC services framework. These services are crucial not only from the government perspective but also to give a CSC necessary credibility in local community. Non-availability of G2C service for CSCs is adversely affecting their financial viability and credibility in rural community. The VLEs got demotivated and this led to their premature exit from the project. In the state of Maharashtra a SCA (SPANCO Tele ltd.) was assigned to establish 3698 CSCs but till December 2010 they established only 1000 due to above mentioned reason. [59]. same problem is faced by other States of India. In Assam state VLEs formed a Union to raise their problems on Facebook-‘All India VLE Development Union’ is on
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Facebook. It is seen that our SCA i.e. Seri Sahaj e-Village Ltd. is not capable of providing us any profitable service even after a year of rollout of our Centers. Surprisingly not a single G2C service has been provided till date
Figure 7: The progress of CSC rollout as on 30th April 2011
Source: Source: website www.csc-india.org as access on 15th May2011.
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Main cause of delay in deployment of G2C services in CSC is back- end computerisation in different government department is not yet competed. Main cause of delay in deployment of G2C services in CSC is back- end computerisation in different government department is not yet completed .Second important reason is that SCAs are lagging in installing mandatory ‘Monitoring Device’ in each computer of CSCs .State government cannot deploy these G2C services unless such monitoring devices installed in every computers of CSC due to security reason. There are challenges of secure payment systems, user identification and authentication. As on 30th April 2011, Online Monitoring Tool (OMT) has been installed/ registered in 55,277 CSCs covering twenty seven States and user ID has been created/ commissioned for 77,903 CSCs. [60]. A strong monitoring and control systems at the SCA level is a must. The State Governments should be encouraged to establish a centralised state-of-the-art Data Centre. The SDC should host all the databases across the various State government departments, District/Taluka offices. The States should also accelerate their back end computerisation through a turnkey PPP model, wherein the private partner could take complete responsibility for development/sourcing of relevant applications, bring in the initial investment and agree on a revenue sharing pattern with the SCAs, as services get deployed through the CSC.
7.2.2 Lack of Entrepreneurship in VLEs
VLEs are main stakeholders of CSCs project and they play a pivotal role in the sustainability of these centres. Success and sustainability of these CSCs depend on selection of appropriate VLEs. A SCA (Seri Sahaj) official in U.P. confidently stated in an interview with The Financial Times (India) newspaper on 11Febuary 2011: “If I select VLE with the right aptitude and train him how to do business, he can earn a living even by selling ice to an Eskimo.” A VLE must have abilities like entrepreneurship, computer/IT skill, strong social commitment and command respect within the community. That aptitude is required as this is a business. So he should have aptitude, acumen, and inclination for doing business. Roll out of CSCs and their sustainability suffered a lot in some part of country due to lack of entrepreneurship in VLEs (an entrepreneur is an individual who undertakes financial risks and carries out new financial ventures). That is the reason why most of the VLEs getting demotivated by the lack of G2C services rather than thinking of starting some new services like B2C to compensate the lack of G2C services. NICT (Network for Information Technology) is a SCA of Madhya Pradesh (An Indian state) reported that its 250 VLEs are withdrawn from this scheme due to this reason. [61]
7.2.3 Lack of capacity building effort
Lack of capacity building effort among SCAs, VLEs and government functionaries is a major challenge faced by CSC scheme. VLEs are facing technical, operational, and entrepreneurial problem. .It is due to their improper training .Government functionaries are not much aware of IT and its benefit. They are not properly cooperating to the SCAs and VLEs due to their
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conservative attitude. COMAT Technology (a SCA) which was responsible to set up almost 6000 CSCs in Sikkim, Haryana, Tripura, Uttar Pradesh (all are states of India), eventually withdrew from the project due to inefficient operational management. Later they blamed on government. [62] The key issue that emerges is how to build capacities for various stakeholders to achieve the ultimate vision of an ‘e Village’. What should be the framework of capacity building? Developing a comprehensive training content for all stakeholders in regional language is a big challenge. A system framework to capacity building for different entities should be in such a way to integrate three entities (VLEs, SCAs and Government) representing different level with in the system.The capacity building strategy is characterised to capture three key aspects –capacity for whom, capacity for what and capacity by whom. A capacity development plan should be framed for long term and immediate need. VLEs and SCAs are the key actors in the management of the CSC business supported by State and Local Government agencies. The capacity building strategy needs to take into account the varying profiles, roles and responsibilities of each group. It is important to map the existing ‘skill sets’ to the ‘where we want to be’ situation and determine the ‘knowledge/skill gaps’ and trained all stake holders to bridge this knowledge/skill gap. [63] VLEs need the training in Rural/social entrepreneurship, benchmarking and learning from others, developing village-level businesses, harnessing opportunities and assessing business potential, Interpersonal Relationships, managing networks, funds, costing, project plans, Computer, personal and organisational skills, Interfacing between Government and community. SCAs need the training in appreciation of rural entrepreneurship as an alternate strategy for rural wealth generation, Understanding of market linkages and the demand-supply dynamics, benchmarking and learning from best practices, developing village-level businesses, Assessing opportunities in rural area, conflict resolution, managing networks, preparation of business plans, managing funds, costing, project plans, Computer skills, Public administration and e-Governance, risk assessment, technology management mentoring. Government Agencies/enabler and regulator need training in sensitization on the principles of e-Government to disseminate a correct understanding of the subject, change management, government process re-engineering, project management and quality assurance standards, understanding technology options, Appreciation of rural entrepreneurship as an alternate strategy for rural wealth generation, working knowledge and skills on PPP models, IT architecture and standards, learning from existing best practices etc.
7.2.4 Inconsistent Connectivity and Electricity
Internet connectivity and electricity are major challenges and these factors adversel affectingy the progress of CSC project. Wireless connectivity would be available at the block level so that villages located within 10-15 km. radius around the block could be connected. Consequently, where fibre or fixed–wire connectivity is not available, the CSCs may connect to the SWAN through wireless options. Despite of this provision CSCs are facing a lot on connectivity front. In large parts of the country, there will be a phase lag between the establishment of CSCs and the rollout of SWAN. So where SWAN does not exist there VLEs are using alternative connectivity
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options like-Dial up Internet, Digital Subscriber Line- (DSL) and Wireless Internet through Mobile Connections. Our survey of VLEs also highlights this problem. In the state of Uttar Pradesh most of the VLEs are using internet data of private companies. The SWAN is not fuctioning properly and most of CSCs are not yet connected with SWAN.According to Ministry of Information technology, Government of India's website as on 04-6-2011the latest connectivity progress is ---'Connectivity has been provided to 67,883 CSCs out of which 18,913 CSCs are connected through BSNL as on 30th April 2011. Out of the total connected CSCs, 24,548 are using VSAT Connectivity, 18,913 are using BSNL Connectivity, 9,060 are using Data Card and 15,362 are using Connectivity through other technology like WLL and GPRS of various service providers such as AirTel, Reliance and Tata Indicom. Only 163 CSCs are using Wimax Ph-1 connectivity. BSNL to connect CSCs by December 2011'. Meghalaya (A hilly state of India) for example lack of connectivity and power supply were seen as major bottlenecks in the sustainability of CSCs. In hilly states of India, making cable as well as wireless connectivity costly [64] Due to interrupted power supply VLEs are forced to match their working hours in a week with availability of power. Our survey shows that in Uttar Pradesh (A state of India) power supply in rural area is only 6to 8 hour in a day, so VLEs are forced to use generator. This escalates their operational cost 10%.Most of VLEs are using laptop instead of PCs.
7.2.5 Inadequate content in regional languages
More than just the user interface, the bigger challenge is going to be the Content. There is no dearth of available content available in disaggregated forms with various content providers, government departments, and NGOs - both at the national and the regional levels. The content is not ready for multi-lingual deployment for CSC offered services. Technology can be effectively used to convert this content into a CSC friendly format. The core services - agriculture, education, health, and entertainment will need to be dealt with in more depths, along with the SCAs, who would be able to bring in the regional knowledge of content and service providers. Local content partnerships and demand driven service models would need to be developed across States/districts. Appropriate measures would need to be undertaken for developing such linkages in association with the SCAs. [65] The main problem is coming in case of B2C services.
7.2.6 Lack of Awareness about ICT and CSC Scheme
The progress of CSC project is hampered mainly due to lack of awareness about ICT and CSC project in rural society. Therefore a massive awareness campaign needs to be conducted to educate people about what ICT can do to improve their lives as well as empower them. [66] The CSC ecosystem consists of various stakeholders, each playing a critical role. The engagement of
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stakeholders in the ecosystem is different, so each of them needs to be addressed differently. The CSC project focuses on the target audiences (TAs) for awareness campaign including rural consumers, village level entrepreneurs and content, service providers and rest of the nation. The stakeholders like the State Level Agency (SLA) and the State Governments that need to be addressed on a one-to-one basis, without the support of mass media. In the second category consists of stakeholders like the rural consumers, content & service providers (CSP), potential village level entrepreneurs (VLE) as well as the rest of the Indian public. The reason these stakeholders need the support of mass media is because the addressable number of individuals and organizations needed to be targeted are potentially too many. There are several challenges that need to be addressed at the micro level in order to achieve the objective of creating this awareness. To communicate a large population (740million) having cultural diversity across 35 states and Union territories in India. Each target audience not only has a different profile, but also has a different message to be communicated. So need to customise communication according to regional diversity. A media plan should be framed in such a way that it take care availability of TV/radio/newspaper access in rural community. Some unconventional media tool should also be used like-mela (fairs), hatt(markets), yatra (procession), festivals street play. Take the help of opinion leaders like doctors, teachers, village elders and village youths. Public institutions and transport carriers are the target place for awareness campaigns. “AISECT(an SCA) in the state of Madhya Pradesh( an state of India) has organised several rounds of meetings at Panchayats(village administrative body),block and district level to sensitise the VLEs, media and other stakeholders and to build awareness among them about the project. They also conducted IT Yatras to build awareness among VLEs about CSC projects and their benefits at Panchyats levels.” [67]
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8. Strategic Analysis of CSC project
8.1 Introduction
One of the prime objective of CSC project is to harness the under tapped potential of rural India through ICT enabled CSCs. To achieve this objective the strategic analysis of CSC and CSC project is necessary. We have already analysed the technical, organisational and service framework of CSC. We have also analysed the opportunity space for CSC and what type of challenges encountered in the roll out process of CSC scheme.
8.2 SWOT Analysis of CSC Project
The SWOT analysis is an extremely useful tool for understanding and decision-making for all sorts of situations in business and organizations. SWOT is an acronym for Strengths, Weaknesses, Opportunities, Threats. A SWOT analysis is a subjective assessment of data which is organized by the SWOT format into a logical order that helps in understanding, presentation, discussion and decision-making.Albert S. Humphery a Stanford Scholor developed the SWOT analysis method.The translating the SWOT issues into action Humphery advocated a six point framework (i) Product (what are we selling?)
(ii) Process (how are we selling it?)
(iii) Customer (to whom are we selling it?)
(iv) Distribution (how does it reach them?)
(v) Finance (what are the prices, costs and investments?)
(vi) Administration (and how do we manage all this?)
Translating the SWOT issues into actions, are best sorted into (or if necessary broken down into) the six categories, because in the context of the way that business and organizations work, this makes them more quantifiable and measurable, responsible teams more accountable, and therefore the activities more manageable. Here we used the SWOT analysis tool for making business model of CSC, so that they achieve sustainability and profitability. SWOT analysis is performed on the basis of secondary and primary data.The issues emerged in SWOT analysis of CSC must be translated into action for developing a sustainable and financially viable business model for CSC.The SWOT analysis issued should be translate in following manner—Strength should be to maintain,build while opportunities should be priporities and optimise.On other hand weakness should be removed and threat must be countered in time. This SWOT analysis indicates that there are some key issues on which we must focus to attains sustainability and
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profitability of CSCs. These key issues like-building disposable income in rural communities, deployment of G2C services,connectivity of CSCs to SWAN,non cooperation of government fuctionaries,lack of awareness about ICT and CSC project,insufficient content and services in regional languages,inadequate capacity building efforts for stakeholders of CSC project and building market linkage must be focused on priority basis
Table 6 : SWOT Analysis of CSC Strength- 1-Exclusive right to deliver G2C services to rural people. 2-G2Cservices make CSCs credible and unique position in rural community(strong brand name) 3- 2Mbps internet connectivity to CSCs through SWAN. 4-Location of CSC in the heart of rural community 5- CSC delivering G2C, B2C and B2B service at their door step to rural people. 6-Public –Private Partnership model (PPP) for augmentation of CSC scheme.
Weakness- 1-dealy in roll out in G2C services. 2-Lack of content in local languages in case of G2C and B2C services. 3-Dealy in SWAN roll out and its maintenance. 4-lack of entrepreneurship in VLEs and poor capacity building efforts. 5-Poor quality of services less credibility in local community. 6-Poor infrastructure of CSC and their connectivity in rural area. 7-Inadequate support of government and road blocking attitude of government functionaries.
Opportunity- 1-Every rural Indian spent Rs.639/month on CSC offered services and one CSC have population 8196 so the total opportunity space for CSC offered services in a month for 1,00,000 CSC in rural India Rs.521 billion per month. 2-CSC open new distribution channel for product and services of private companies. 3-Access to rural market of India through CSC to harness its potential. 4-CSC offer access to education, information and knowledge to rural India. Space for IT and English education in rural area and harness the cheap cyber labour in competitive IT/ITes market by companies. 5-CSC offers citizen centric government-citizen interface and empower the rural people. 6-CSC creates100,000 direct job and 300,000
Threat- 1- competition to other B2C and B2B Service provider in the market. 2-CSCs are in Tax net while their competitor is not in the tax net. 3-Threat from the mediatory and road blocking attitude of non motivated government functionaries . 4-Low education, poverty and slow adoption rate towards ICT. 5-Unwillingness and poor participation of private sectors and NGOs in this ambitious scheme. 6-Lack of awareness about ICT and CSC scheme among rural community, government functionaries.
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Translating these issues into action ,we must maintain and build the strength of CSC and opportunities should be prioritised and optimised.The weakness of CSC must be removed or minimised and threat against CSC must be countered effectively in time. Increase the disposable incomes of the villagers would allow the CSCs to drive higher revenues and achieve sustainability, in the longer term. The challenge would be to first deploy those services that can save cost (G2C) and build income opportunities (B2C) for the rural villager. A rise in disposable incomes would drive greater demand for developmental services like education, health and entertainment, thereby improving the quality of life of the rural families. Market linkage increases the income opportunity of rural people. An appropriate partnerships and market linkages will enable the rural consumer to drive higher socio-economic returns for his knowledge, skills or assets. The CSC will be act as via media between rural community and private companies. For example IT and English language skilled rural workforce is able to earn more if SCAs bags the IT/ITeS business contracts and SCAs transfer this task to VLE. The VLE distribute the job work to skilled rural cyber work force and they execute it on cheaper rate. This market linkage increases the income of rural community.
8.3 Porter’s Five Forces Analysis of CSC
Michel porter developed the five forces model for understanding the competition in business and take appropriate decision .Thses five forces are –(i) power of buyers (ii)Power of suppliers (iii)Threat of power (iv)threat of subsitute (v) comptetors/rivals.[68 ]This five forces model is analysed here for CSC.The matrix(table no-7) shows that G2C services are very important for sustainability and viability of CSCs and CSCs have exclusive right to deliver these services to rural people. This is clear from our survey/interviews and secondary sources.There is not any competetion in market for CSC. Incase of B2C services there is a tough competetion in market for CSCs. Private players are already exist in the catchment area of CSCs and near by.So the entry in the B2C services arena is going to be tough for CSCs and rural people have more choice for B2C services. CSC can only cope up this situation when its location is appropriate and appropriate VLE should be chosen. In case of B2B services government as a prime client gives preferrence to CSCs but private companies only choose CSCs when they feel that they are efficient and benficial for their product and services sales. So the capacity building of VLEs are important for their survival and counter their rival
indirect job in rural India and catalyse the social change and inclusive growth in rural India.
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Table 7 : Portes Five Forces Matrix for CSC
G2C Services B2C Services B2B services Buyers Power low high high Suppliers Power high low low Threat of Entry low high high Threat of Subsitutes
low high high
Competitors/Rivals low high high Table number 8 :Porter’s Five forces Analysis of CSC
Porter’s Forces
Application on CSC business
Entry Barrier
Entry barrier are low because lack of awareness about CSC and profits of CSC business are not so visible at the early stage of CSC project implementation but later when CSC business expands and its profitability become more visible then entry become tough.
Power of Supplier
Services offered by CSC are— G2C,B2C and B2B.In case of G2C services the VLE s have monopoly and they have execlusive right to deliver it to citizens. So the power of supplier is strong. Incase of B2B and B2C services are provided by other private players in the markets. So citizens have more choice ,so CSC power is week for these services. So VLE have work hard and become efficient to compete in the market.
Power of Buyers
Rural people are the buyers for CSC offered services.Power of buyers is strong in case of B2B and B2C services because they have more options in the market for these services while their power is week in case of G2C services .G2C services is only delivered through CSC not by other ptrivate players.
Threat of Subsitues
CSC may face threat from subsitute services models avaliable in market in present and also in future.In early stage of CSC scheme it is difficult to accessible in remote rural area so there is not any potential threat of substitue of CSC but in future there will be a potential threat for this scheme.As the internet connectivity increases in rural area more people have access to B2B ,B2C and G2C services through their own pc/laptop.More player will enter in the field of B2B and B2C services business through internet services provider in rural market .
Rivalary Tough rivalary among CSC owner and non CSC private players in the catchment area of CSC and near by in the field of B2C and B2B services..VLEs are also facing rivalary from intermediatories in the field of G2C services because their interest are going to be hampered.Present private players in the field of B2B and B2C services may create hinderence for VLEs to discourage them but government support and exclusive right of G2C services delivery makes VLE strong in market.
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8.4 Business Map/Ecosystem analysis of CSC
This is a dicription of ecosystem of CSC. It shows what type of other players are working in same field and who are the main stakeholders and what is the interrelation among them. This analysis give us better understanding about the CSC business and we can take better decision for sustainability and viability of CSC. This matrix shows the interrelationship among different stakeholder in CSC ecosystem and choices available for user/sellers. CSCs only become viable when VLEs offered cheap and best services to user otherwise user may opt other sellers/service providers available in the market.The issues and challenges discussed earlier must be attined on priority basis.
Table number 9 : Business map of CSC. Connectivity Providers
Srvice and Content Providers
Sellers Users Remarks
NICNET/SWAN
Cetral government and agencies
Owners of CSC(VLEs)
Rural People
NICNET/SWAN is only for CSC while private internet provider companies may provide VLEs and Non VLEs
AIRTEL State government and agencies through SDC
Private B2B and B2C service provider in the catchment area of CSC and near by.
Government/their agencies
Content and services provided by government in case of G2C while in case of B2B and B2C VLE s and non VLEs may get it from private &S providers
IDEA Private content and services providers
Individual B2B abd B2C service agents
Private companies
Seller of G2C services are exclusevily VLE while in case of B2B and B2C services may be VLEs and non VLEs
TATA Telecom
Internet based content and services
Intermediateories in case of G2C services
User of G2C,B2B and B2C services are rural people,government itself and private companies.User only get G2C services from CSC(VLEs) while B2B and B2C services service can be obtained either through CSC or through Privateplayer(Non VLEs).
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Figure 8: Content and Services Ecosystem of CSC
Source:Draft Doucument of CSC(2006),department of Information Technology Government of India
8.5 Value Chain Analysis of CSC
A value chain is a chain of activities for a firm operating in a specific industry. Products pass through all activities of the chain in order, and at each activity the product/services gains some value. The chain of activities gives the products more added value than the sum of the independent activities value.[69]
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Figure 9: Framework of Value chain
Source:What is the Strategy? By Porter,M.E.(1996),Havard Business School Review,Nov.-Dec.-61-78. Value chain analysis (VCA) is a powerful diagnostic tool that can be identify the critical issues and blockages for target customers and provide framework for intervention to change the circumtances.VCA also recognise the economic power of targeted benificieries.VCA identify the factors which are responsible for economic viability and commercial sustainability of a product/service in market.So finally VCA provide a policy and restructing tool to counter both market or state failure.The purpose of VCA of CSC project is to identify the barriers and blockage in value chain which are are affecting the sustainability and financial viability of CSCs.Learning the lesson from VCA policies and their implementation process should be modified accordingly.
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8.5.1 Primary Activities of CSC
Primary activities of a CSC include the arrangement of capital cost by VLEs and purchase of essentisl goods/instruments required for operation of CSC.Then they start the operation of CSC and simultaneously promoting their services in targeted customers.VLEs are delivering the G2C, B2B and B2C services to rural people in their catchment area.
8.5.2 Support Activities of CSC
Government of India launched CSC project to provide government and business services to rural people on affordable cost at their door step.The goal of this project is economic prosperity inrural area and to catalyse social changes through ICT.This project is under implementation process on the private(SCA,VLEs),public(center and state government) partnership model(PPP).Government developed the large support system for the sustainability and viability of CSCs.The technical framework of CSC includes the connectivity and content&services support system.SWAN provide broadband connectivity to CSCs with speed 2mbps.Content and services are provided by government(in case of G2C services) through National and state date centers(SDC).The organisational support system includes the private part(Service Center Agency:SCAs) and government part.At the national level there is a apex body NLSA(National Level Services Agency ) and at state level –State Designate Agency(SDA) for supporting and monitoring the CSC project.SCAs are franchisser who are responsible for selection of VLEs and supporting them in operation of CSC. They share the revenue with government and VLEs in the following rationVLE:SCA:SPV(central government agencies)=55:40:5. The VCA gives the complete picture of chain/process of CSC project .Primary surveys and interviews as well as secondary sources highlighted the barries and blockage in the value chain of CSC.Primary activities are directly depends on the support activities activities . (i) VLEs are facing the problem of internect connectivityproblem.Most of VLEs are not connected with SWAN and they are forced to use data card of private companies which increase their operational cost.Simultaneously they are not getting sufficient and regular electricity supply and they are forced to use generators which also increase the operating cost of CSC. It evident that technical and infrastructral support activities are affecting the operation of CSC which finally affects their sustainability abd viability.
(ii) VLEs are not getting proper support from organisational setup of CSC projects. Delay in the deployment of G2C services to CSCs make them vulnerable because these services plays the vital and pivotal role in the sustainability and credibility ofof CSC. Government functionaries are not taking proper interest. VLEs are forced to stop the functioning of CSC.
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(iii) Back end computerisation of government department and e-ready ness of government is foundation stone of G2C services but its speed is very slow. VLEs are not getting sufficient services due to this reason.
(iv) Some SCA are also not providing sufficient support to VLEs in initial phase of implementation of CSC.They are leaved in lurch.Those VLEs are interested in taking the loan there loan application are not disposed in time.Those succeed in getting loan ,they are facing huge financial burden because G2C services are not deployed and poor connectivity and electricity supply increase their operating cost.So such VLEs are forced to withdrew from project. Government support fund is unavailable because of non deployment of G2C services.
(v) For the sustainability and viability of CSCs appropriate VLEs should be selected by SCAs and give them proper training.The capacity building efforts are not sufficient.
(vi) Most of VLEs complaint that villagers are not aware about profits of CSC offered services.It indicates that government agencies and SCAs are not intensifing their awareness compaign.
The VCA of CSC identify the core issues and barriers that are hampering the sustainability and fiancial viability of CSC. The support activies are mainly responsible the poor implementation of CSC project. So more focus shold be given on support activities in the value chain of CSC.
8.6 Findings of Strategic Analysis of CSC Project
The stategic analysis of CSC through different tools of strategic analysis indicate these major issues must be addressed for the sustainability and viability of CSC. These are --
(i)Deployment of G2C services to CSCs and mounting of monitoring devices(OMT) on CSC’s computers should be as early as possible.
(ii)Connectivity of SWAN must be uniterrupted connectivity to CSCs to reduce the operating cost of CSCs. .
(iii) Speed up the back end computerisation process of government department and speedy e-readyness of states.
(iv) Select appropriate place for CSC
(v) Select appropriate VLEs that have enterprenueral quality and technical knowledge
(vi)Provide better B2B and B2C services to rural people so that they do not shift towards non CSC private players.
(vii)Content and services must be avilable in local languages.
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(viii) Awareness compaign must launched regarding CSC and services offered by CSC.
(ix) Capacity building of VLEs ,government functionaries and other stakes holder must takes on priority basis.
(x) Sufficient and uniterrupted supply of electricity to CSCs ,so that their operating cost should be minimum.
Finally, the ultimate focus of the services strategy may be to develop a sustainable business model. The aim would be to first enable a rapid break-even for the CSC business and thereafter build a mix of services that would drive higher revenues and profits
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9. The Business Model Analysis of CSC: Sustainabilityand fianacial viability of CSC
9.1 Introduction
Sustainability and financial viability of CSCs are key issues for the success of CSC project. It depends on business model of CSCs and their execution. We are trying to analyse the business model of CSCs and what innovative measures should be taken for the success of CSC project. This chapter explains the concept of business model. In this chapter also discusses that the basic business model of CSC and later on different business models SCAs adopted for the sustainability and financial viability. The data of cost and cash flow was collected from VLE of village Jalalpur, district- Raebarelly in the state of Uttar Pradesh, India and analyse it. This chapter of thesis explain the cash flow analysis of that CSC (Village Jalalpur, Bachhrawan) of district-Raebareilly, U.P. (India) and analyse the outcome and draw the inferences for the sustainability and financial viability of a CSC.
9.2 Concept of business model
Business model is architecture for generating revenue and profit. It is an abstract and summary of how a company plans to create value by serving its customers. The input of a business model is technical and its output is economic. A business model describes-what are the product/services, who will buy it? Why they will buy it? And how they will buy it?
Table Number 10: The logic of CSC’s business model What is product/service?
CSC details/product attribute
Who will buy it?
Market an and customer of CSCS offered services-Customer segment
Why they will buy it?
Value proposition of CSC.
How they will buy it?
• Value Chain(Main activities) • Industry map i.e. position of CSC in the market. • Advantage of CSC offered services • Profit model of CSC: Cash flow analysis of CSC.
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In this context a business model is defined as a summation of core business decision and trade- offs employed by a company to earn the profit. These business decisions and trade-offs falls into four groups-revenue sources, key expenses, investment size and critical success factors.[70] Sustainability and financial viability of CSCs depends on these above mentioned four factors. Financial viability refers to the capacity that a CSC has for generating sufficient income to cover its cost of operation, and/or the cost of initially establishing it. Whilst this ability to pay for itself generally requires the derivation of revenue from those who use the services of CSC, it does not preclude the possibility of other continuing source of revenue, for instance, from government. [71]
9.3 Value Proposition of CSC
Around 70% population in India lives in rural area but people are still struggling for basic aminities and spent more money and time for getting government and business services.100,000 common service centres are going to be established on honey comb model (one CSC covers six adjacent villages) to cover all 600,000 village of India. CSCs are Internet connected service delivery kiosks provising G2C, B2C and B2B services on affordable prices at their door step of rural people. A CSC will empower the rural community and catalyse the social changes through modern technology. Although B2B and B2C service providers are exist in market but CSCs are unique because they have fast internet connectivity through SWAN and access to government information and have exclusive right to deliver G2C services to rural people.The rural people can save millions of Rupees every month getting G2C services at their door step. Each CSC have an Rs, 5.20 million market potential in an month,that may be trapped by CSCs.
9.4 Business model of Tele centers in world and in India
The tele-center scheme adopted various business models according to area specific needs for its sustainability and financial viability. The Gyandoot case in India adopted the franchising government services through public –private partnership (PPP) business model. N-Logue launched telecenters in India to fulfil the need of internet and voice services in every underserved small town and village in India. The N -Logue acknowledge the need to help its franchisees (who run the telecenters) and finance the investment required to start their business. Revenue comes to these kiosk owners from local community and from content services fee. Few large telecenters are financially sustainable without on-going external support. The telecenter projects in Mozambique have business plans that shows that the center taking at least four year to become self-sustaining-and only then with the capital written off. In El Salvador, Infocentor, a non- profit organisation established to promote the information society, borrowed 10 million USD interest free loan from government to build 100 telecenters within two year. These profit telecenters were to be run as franchises-cum business-incubators. [72] In an initial phase, each telecenter is established and operated directly by Infocentors management .Only when the centres achieve profitability it is sold to franchisee. CeC business model of Philippines is based
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on private-public participation model (PPP Model) and is operated on government push top- down approach but in future they develop on community pull bottom-up approach.
9.5 Basic Business Model of CSC
In draft document of CSC (prepared by IF&FS an agency of government of India) government proposed to develop the business model of CSC. The objective of that business model was to trap the market potential of CSC by adding values to rural people. Government of India hired two international fame consultancy companies—PwC Ltd. and AC Neilson ORG for initial survey for CSC scheme. This initial business model is developed from past experience of e-service delivery kiosk in India and survey outcomes of these two consultancy companies. This survey recommended some suggestion for the sustainability of CSC scheme. Sustainability of CSC depends on various factors like-location of CSC and population under its catchment area, managerial capability of SCAs, entrepreneurship of VLEs, Connectivity of CSC, and e-readiness of states for G2C and G2G services, Content and services in regional languages, business need at regional level. The capital cost and operational cost (fixed cost+ variable cost) for a CSC as given in basic model case is given in table-11.
Table Number-11: The cost detail of basic business model of CSC Capital cost Fixed cost Variable cost Equipment Cost(Rs.) Item Cost(Rs.) Item Cost(Rs.)
Two P.C.+O.S. 44,000 Capital cost recovery EMI+12% Interest for four year
Connectivity charges
SWAN Annual charges
Inkjet printer 7,000 Hardware maintenance(p.a.)
10% of asset value
Subscription charges
100 per subscription
Dot matrix printer
7,500 Hardware Insurance 1% of asset value
Electricity charges
800
Digital camera 7,000 Training(per VLE)p.a. 2,500 Generator cost
13 per hour
TV+VCD Player 6,000 Man power cost(per month)
1,500
Generator(750VA)
25,000 Monthly fee to SCA 500
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UPS(500VA) 2,600 Rent for premises per month
1,000
Wireless equipment
25,000 Business promotion(per month)
500
IT Software 2,000 Travelling cost(per month)
500
Furniture & fixture
15,000
Contingency/Miscellaneous
1,400
Phone line 1,500
Others 9,400
Total 1,47,000
Source: Draft document of CSC (2006), department of Information Technology, Government of India According to this plan 85% of capital cost is born by VLE. The person will take loan from banks and banks will give loan up to 85% of capital cost and 15% of capital cost will be bear by SCAs. Initially VLE will deposit only security money. Capital cost will recover in four years. Revenue stream for these CSCs will include subscription services, fee from G2Cservices, earning from B2C and B2B services. For the capital cost recovery following assumptions are taken into account as mentioned in cost table e.g. interest rate will be 12% p.a., annual maintenance charge of hardware10% p.a., insurance of hardware 1% p.a., depreciation of hardware is 25% and remaining assets 10% p.a., revenue sharing with VLEs, SCAs and government body (SPV: Special purpose vehicle) VLE: SCA: SPV=55%:40%:5%. This plan also makes arrangement for risk mitigation plan to support VLEs for the sustainability of CSC. Government will provide around Rs. 3,000 per month to each CSC through SCA so that they will able to cross the valley of death and would be able to attain the breakeven. This grant will be released only after mounting of monitoring devices on computers at CSC.
9.6 Business Model developed by SCAs from Field Experience
Initially SCAs start with basic business model of CSC as mentioned in draft document of CSC, government of India but on the field experience they changed the business model according to regional needs. The main drawback of basic model is the difficulties in financing to VLEs by financial institutions. Their loan applications were not disposed in time. If somehow they get the loan the operational cost and repayment of loan become financial burden for them due to non-availability of G2C services, delay in mounting monitoring devices on computer of CSC and
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road blocking attitude of lower government functionaries. SCA like COMAT follow that pattern and badly failed and finally quit from the project.
9.6.1 Cost sharing Business model of CSC
Some SCAs follow the cost sharing with VLEs in the 80:20 ratios. It means 80% capital cost bore by SCA and 20% bore by VLEs. This model is adopted by a SCA named NICT in Madhya Pradesh state (India).NICT‘s experience was very good on this model. Initially a SCA Sahaj Seri village Ltd. worked in U.P. West Bengal, and Tamil Nadu states followed this model but later they realised that due to lack of G2C services VLEs are not taking interest to run the CSC. So they drop that idea and focussing on selecting appropriate VLE who is capable to bear capital cost and operational cost fully and has entrepreneurship quality. They will only support in training and providing more services other that G2C services this model is quite successful in U.P.
9.6.2 Employee Business model of CSC
A SCA named BASIX working in Meghalaya and state of Orissa in India; they follow the employee model and still running it successfully. In this model entire capital cost bore by SCA and VLEs work as their employee and SCA pay them fixed salaries. They also helped the CSCs with initial operating expenses till the time the CSCs become sustainable. They de-motivated VLEs in taking loan to avoid financial burden in the initial stages of the project. BASIX concentrated not only on delivering certain set of services from the CSCs but a range of services starting from the basic G2C services to banking to agricultural services.
9.7 Framework of CSC’s business model
9.7.1 Key Expenses or Cost drivers of CSC
A cost driver is a factor that affects total costs. The cost varies with either time or volume of output. The cost is categorised in three forms: capital, fixed and variable. The fixed cost and variable cost are termed as operational cost. The Capital cost for CSC is the cost of equipment required for establishing a CSC while variable and fixed costs come under operational cost. This analysis is based on present market rates. It is explained in table no-11. This cost may vary according to place and time.
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9.7.2 Revenue sources
A business model can incorporate one or several different revenue sources. CSC business model consist following broad revenue sources like government to citizen services (G2C), Business to citizen services (B2C), Business to business services (B2B) and non- networked services. These services are already discussed in service framework section of this thesis. VLEs are generating revenue through these sources on different revenue models such as-membership/subscription, volume/unit based, transaction fee and advertising. In case of G2C services revenue will come through customer on pay per unit of services basis. Since the content and services are provided by government agency so revenue is shared in the manner of –Government (SPV): SCA: VLE=5:45:55. In case of B2C and commercial services, VLEs are applying subscription and membership model in entertainment and educational services. They are also generating revenue by collecting data for government and research agencies.
9.7.3 Investment size
It is defined as maximum investment is the amount of cash required before a company achieves positive cash flow. The total investment size of a business model is depends on several factors including company’s revenue model, cost drivers and critical success factors. A cash flow diagram provides the means for capturing and summarizing information relating to the cash requirement of a business model. [73] Investment size of CSC is here analysed on the basis of this statement. Investment size of CSC is the sum of capital, variable and fixed cost as explained earlier. The government offer five year period to a CSC to attain the sustainability and profitability. Success of CSCs depends on way of investment. Some SCA like BASIX bear all investment and VLE work as employee till the CSC become sustainable. It means that SCA supports the VLE till the date of breakeven point. This model is quite successful in the state of Orissa in India. In some cases the VLE bears all investment. They took the loan from financial institutions. Due to delay in G2C services and connectivity problem VLEs are not able to cross the breakeven point of cash flow and finally they withdrew from this scheme. Some SCA like NICT, SCA bear 80% while VLE bear 20% of the capital cost. SCA also provide training to VLEs to develop their entrepreneurship ability so that early they become sustainable and profitable. These CSCs early got their first cash flow positive point and later on crossed the breakeven point of cash flow. The date of first cash flow and the date of cash breakeven are directly proportional to critical success factors.
9.7.4 Critical Success Factors
A critical success factor is an operational factor or competency that a company must possess in order for it to be sustainable and profitable. Therefore the success of a business model depends on both the creation of a viable business model and the successful execution of multiple
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operational functions. Sustainability and profitability of CSCs’ business model depend on some key factors---selection of appropriate VLEs, selection of appropriate venue of CSC and catchment area population of CSC, credibility of VLEs , adequate connectivity and consistent power supply to CSC, timely roll out of G2C and B2C services and their content in local language, capacity building of all stakeholders of CSC eco system, awareness in public about CSC and benefits of CSC offered services, role of government and attitude of government functionaries. These critical success factors are explained in subtitle challenges before CSC in this thesis. SCAs are applying different models in different parts of country. NICT work on collaboration models 80:20(SCA: VLE) while BASIX (A SCA) working in Orissa are working employee model that is VLE are the employee of SCA till break even profit point. The SCAs like COMAT are working on a model where VLEs invest whole cost by taking loan from financial institutions but this model is not successful. So there is a need to think about some innovative business model for CSC which enables the CSC sustainable as well as profitable.
Figure 10: Cash Flow Diagram
DATE OF FIRST CASH FLOW POSITIVE
DATE OF CASH BREAKEVEN
MAXIMUM FINANCING NEEDS
TIME
CASH FLOW
Source: Business model analysis by Richard G. Hammerers, Paul W. Marshall, Taz Piromhamed; January22, 2002, page 1, Harvard Business School Publication No-9-802-048
9.8 Cash Flow Analysis of CSC
Cash flow is the movement of cash into or out of a business, project, or financial product. [74] The Cash flow is essentially the movement of money into and out of any business; it's the cycle of cash inflows and cash outflows that determines business' solvency. Cash flow analysis is the study of the cycle of any business' cash inflows and outflows, with the purpose of maintaining an
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adequate cash flow for any business, and to provide the basis for cash flow management. Cash flow analysis involves examining the components of any business that affect cash flow, such as accounts receivable, inventory, accounts payable, and credit terms. By performing a cash flow analysis on these separate components, we'll be able to more easily identify cash flow problems and find ways to improve our cash flow. The cash flow data of a VLE namely K.K. Anjan of village Jalalpur, district-Rae Bareilly, state of Uttar Pradesh, India was collected personally for the cash flow analysis. The data of the VLE pertains to duration of 11 month and rest of the data is projected during for flow analysis.
9.8.1 Cost detail and Cash Flow Analysis of Jalalpur CSC
The capital cost is cost necessary for establishing CSC and variable and fixed cost is operational cost of CSC. The capital cost is worked out at Rs. 98,100. The fixed and variable cost is described in the table -11.The assumptions taken into account in computing the cost are: rate of interest=12% of asset value for four year; hardware maintenance is 10% of asset value per annum; Insurance of hardware is 3% of asset value; hardware assets depreciated at rate25% p.a.; and assets other than hardware depreciated at rate 10% p.a.; tax rate=30%; expenditure on business promotion per month=5% of revenue; expenditure on travelling cost per month=5% of revenue; expenditure on contingency=1% of revenue; miscellaneous=3% of revenue; cost of assets is given in assets schedule. In primary data VLE have not generator but for analysis purpose we assume the cost of generator Rs. 20,000. Total investment on hardware and non-hardware assets has been estimated at Rs. 118,100 which is shown in table – 12. The VLE did not take the loan but for analysis purpose we assume the loan amount is Rs. 118,100. The original cash flow data of VLE contains 11 month detail but for analysis purpose it is interpolated for 48 months (four year).The cash flow data of VLE is given in the table number-13.
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Table-12: Asset detail of Jalapur CSC, District –Raebarelly, (U.P.), and India
Asset Schedule of CSC-Jalalpur Assets: Hardware Two P.C.+O.S.
44,000 Inkjet printer
7,000 Dot matrix printer
7,500 Digital camera
7,000 TV+VCD Player
- --- IT Software
2,000 Total
67,500 Assets: Others Generator(750VA)
20,000 UPS(500VA)
2,600 Wireless equipment
- Furniture & fixture
15,000 Phone line
1,000 Others
12,000 Total
50,600 Source: Cost detail provided by VLE of village Jalalpur, district –Raebarelly, (U.P.), India
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Table-13: Cash flow detail of VLE-Jalalpur, district-Raebarelly, (U.P.), India Cash Reciept Month--1 Month-2 Month-3 Month 4 Month-5 Month-6 Month-7 Month-8 Month-9 Month-10 Month-11Income from G2C services 6000 8000 10000 12000 9000 9500 9550 9500 8000 9500 9600Income from B2C services 2000 2500 2000 1500 1680 1800 1200 1400 1200 1900 1550Income from B2B services 2500 2000 1500 2500 1250 1100 1000 2000 1200 1800 2500Loan 0 0 0 0 0 0 0 0 0 0 0Investment 500 1000 500 400 650 450 300 500 600 400 500Total reciept 11000 13500 14000 16400 12580 12850 12050 13400 11000 13600 14150Disburment/ExpenditureInterest payment on loan 0 0 0 0 0 0 0 0 0 0 0Hardware maintinance 100 500 400 200 300 250 450 0 300 100 100Training cost of VLE 250 0 300 150 0 150 0 0 350 0 100Manpower cost per month 2500 2500 2500 2600 2600 2600 2600 2600 2600 2600 2600Monthly fee to SCA 500 500 500 500 500 500 500 500 500 500 500Rent for premises 300 300 300 300 300 300 300 300 300 300 300Business promotion per month 750 500 600 500 800 500 200 500 300 400 500Travelling cost permonth 800 1000 600 700 600 550 300 500 800 800 800Contingency/miscelleneous 0 0 200 100 300 100 0 200 250 300 400Internet connection charge 400 400 400 400 400 400 400 300 400 400 400Electricity charges per month 400 400 400 400 400 400 400 400 400 400 400Generator running cost per month 350 350 350 350 350 350 350 350 350 350 350others 800 1000 500 450 300 350 200 200 400 100 250Total Expenditure/disbursment 7150 7450 7050 6650 6850 6450 5700 5850 6950 6250 6700Netgain=total reciept-total expenditure 3850 6050 6950 9750 5730 6400 6350 7550 4050 7350 7450 Source: Data of VLE of Jalalpur, District-Raebarelly (U.P.), India The cash flow analysis has five parts—(i) profit and loss (P&L) statement (ii) balance sheet (B.S.) (iii) cash flow statement (iv) asset schedule statement (v) debt schedule statement. Finally cash flow graph is drawn which shows the trends of cash flow. All the five parts are incorporated in the table and depicts flows by their analysis.
9.8.2 Revenue Inflow Analysis—the major source of revenue inflow is from G2C (government to citizen services). B2C and B2B services have minor contribution. Growth rate of revenue from G2C services gradually decreasing in four year as-21%>18%>9%. As mentioned in profit & loss statement table number.
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Table 14: The profit and loss statement of Jabalpur CSC, District –Raebarelly, (U.P.), and India
Profit & Loss Statement Year 1 Year 2 Year 3 Year 4Income from G2C services 1,10,442 1,33,958 1,59,074 1,73,482 Growth rates %Income from B2C services 20,327 23,337 31,140 36,978 Growth rates %Income from B2B services 21,875 32,344 36,446 41,068 Growth rates %Total Revenues 1,52,644 1,89,639 2,26,659 2,51,528
Operating ExpensesHardware maintinance 3,375 5,400 8,100 10,125 Hardware Insurance 2,025 2,025 2,025 2,025 Training cost of VLE 2,000 - - - Manpower cost per month 30,900 33,600 37,200 42,000 Monthly fee to SCA 6,000 6,000 6,000 6,000 Rent for premises 12,000 13,200 15,000 17,400 Business promotion per month 7,632 9,482 11,333 12,576 % of RevenueTravelling cost permonth 7,632 9,482 11,333 12,576 % of RevenueContingency 1,526 1,896 2,267 2,515 % of RevenueInternet connection charge 4,700 4,800 4,800 4,800 Electricity charges per month 4,800 5,400 6,000 6,600 Generator running cost per month 4,200 4,800 5,400 6,000 Miscellaneous 4,579 5,689 6,800 7,546 % of RevenueTotal Operating Expenses 91,370 1,01,774 1,16,257 1,30,164
Operating Profit 61,273 87,864 1,10,402 1,21,364
Depreciation Expenses 21,935 21,935 21,935 21,935
Profit Before Interest and Tax 39,338 65,929 88,467 99,429
Interest Expenses 12,855 9,753 6,256 2,317
Profit Before Tax 26,483 56,177 82,211 97,112
Taxes Paid 7,945 16,853 24,663 29,134 Tax rate %
Profit After Tax 18,538 39,324 57,547 67,979
Revenue Growth 24% 20% 11%Operating Margin 40% 46% 49% 48%PAT Margin 12% 21% 25% 27%
.
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The cash flow statement of the CSC gives the picture of total cash flow and net cash flow after fulfilling the liabilities as given in table number-15.
Table 15: Cash Flow Statement of Jalalpur CSC.
Cashflow Statement Year 1 Year 2 Year 3 Year 4
Cashflow from Operating ActivitiesProfit After Tax 18,538 39,324 57,547 67,979 Add: Depreciation 21,935 21,935 21,935 21,935 Add: Interest Expense 12,855 9,753 6,256 2,317 Total 53,329 71,011 85,739 92,230
Cashflow from Investment ActivitiesLess: Capex (1,18,100) - - - Total (1,18,100) - - -
Cashflow from Financing ActivitiesAdd: Loans Raised 1,18,100 0 0 0Less: Principal Repayment (24,465) (27,568) (31,064) (35,004) Less: Interest Payment (12,855) (9,753) (6,256) (2,317) Total 80,780 (37,320) (37,320) (37,320)
Net Cashflow 16,008 33,691 48,419 54,910
Opening Cash Balance 0 16,008 49,699 98,118 Net Cashflow 16,008 33,691 48,419 54,910 Closing Cash Balance 16,008 49,699 98,118 1,53,028
B/S Figure 16,008 49,699 98,118 1,53,028 Balance Check TRUE TRUE TRUE TRUE
In our survey in state of Uttar Pradesh (India), most of the respondents accepted that they are spending around Rs. 200 to Rs, 300 for getting a government document from government offices and they wait from one day to 7 days. The study on four services in the Anoopshahar Tehsil (Sub Division), district Bulandshahar (Uttar Pradesh), India as shown in table-4 reveals that government services have enormous revenue generation potential. From four services each CSC earn around Rs.5, 000/-. Government of Uttar Pradesh (India) issued notification for adding 35
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government services in the basket of CSC. If all services deployed to CSCs their revenue inflow will increase remarkably. The cause of revenue growth rate in case of G2C services is due to road blocking attitude of lower government functionaries and lack of awareness in public. The state of Uttar Pradesh has 71 district but G2C services are deployed in hardly 8 districts that also only partially. In places it is deployed there is a problem of continuity. The analysis clearly shows that sustainability and financial viability of CSCs mainly depend upon G2C services. Delay in G2C services deployment to CSC is hampering the progress of CSC scheme implementation. The analysis of primary (survey and interviews) and secondary sources reveal the main causes of delay of G2C services to CSCs. The back end e-readiness (computerization of government records and office functioning) of government departments is not sufficient and its speed is quite slow. So, the speed needs to be geared up.
The second main cause is the road blocking attitude of lower government functionaries. These functionaries are not taking proper interest in the implementation process of this scheme. They fear that their monopoly and importance will decrease in the system and in society. There is urgent need to train government functionaries to change their mind set. Mounting the monitoring device on the computers of CSC is essential to control the activities of VLEs. The government of India have a provision to provide support to VLEs for first four years at Rs, 3000/- per month for their sustainability. The fund is released only when monitoring devices are mounted on the computer of all CSCs of a SCA.VLEs is not getting financial support from government due to delay in mounting the monitoring device on the computers of CSC. This factor is adversely affecting the sustainability of CSCs. In nutshell G2C services are vital for the sustainability and financial viability of CSCs. So there is need to speed up the back end e-readiness of government departments and mounting of government devices on the computers of CSCs and simultaneously more capacity building efforts for government functionaries to change their mind set and attitude.
Revenue inflow from B2C and B2B services is not substantial. The main cause is lack of awareness towards CSC offered services in rural community. People are not aware of the profit and importance of these services. The agricultural, educational and entertainment and health services have enormous revenue generating potential as evident from AC Neilson ORG market survey on CSC services as mentioned in table-5. Inadequate services and content in regional languages is an important factor. Local people are not properly utilising these services due to this region. So the more content and services need to be deployed to CSCs according to local needs. Revenue inflow can also be increased through B2B services. Government must play the catalyst role. Data collection, surveys for government schemes and data feeding work can be given to CSCs. Private Companies are keen to penetrate the rural market for their product and services. The CSCs have potential to become the distribution and advertising channel for their products and services in rural markets.
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9.8.3 Expenditure or Revenue out flow analysis of CSC
The operating cost of CSC should be minimising for its sustainability and profitability. As evident from our data of expenditure the expenditure on generator and connectivity is increasing. Our survey as well as secondary sources indicate that electricity supply is hardly 4 to 6 hours per day and also irregular. So VLEs are forced to operate generator. The profit and loss (P&L) statement shows that expenditure on electricity and generator is almost equal. SWAN is government broadband network for providing 2 mbps speed connectivity to CSCs, but in our survey as well as secondary sources reveals the truth that most of the CSCs are not connected and VLEs are forced to use private internet connection. It is increasing their operating cost as evident from P&L statement. So the technical infrastructure of CSC scheme must be improved and regular connectivity to each CSC may be ensured. The deployment of G2C services is also delayed due to improper functioning of SWAN. Depreciation of computer hardware is very high and rapid change in technology also increases the operating cost. Repayment of principal amount and interest is a heavy burden for VLEs and badly affects the sustainability and profitability of CSCs. The first year of CSC is very crucial for their sustainability. It is evident from debt statement that in CSCs spend Rs.37, 320 on interest and principal amount repayment of loan during first year. Operating cost and repayment cost is very high in comparison to revenue inflow. The net profit after taxes and loan liabilities is only Rs.16, 008. How a VLE can survive under such financial burden? Subsequently, most of the VLEs who take the loan from banks /financial institutions withdraw from this scheme. Some SCA like COMAT followed that pattern and they also failed badly and finally withdrew from scheme. Learning lessons from these failures the SCA like NICT and Sahaj Seri follow the capital cost sharing model in the ratio of SCA:VLE=80:20. The Sahaj Seri SCA has further moved to another model. They feel that most of VLEs take CSC franchisee due to G2C services but delay in the deployment G2C make them demotivated. Some VLE stop the operation of CSC in the process of waiting for G2C services deployment. Now they are focussing on VLEs financial capability and entrepreneurship, which can bear all cost. SCA like BASIX follow the employee model. Initially VLE worked as employee of SCA till they attained the sustainability. These models are quite successful.
9.8.4 Cash flow Analysis of Jalalpur CSC
The cash flow and P&L statement gives the picture of revenue inflow and out flow. The total revenue inflow and total operating expenditure in four years is shown in P&L statement remarking the revenue growth of 24%>20%>11%. Further, the operating margin is 40%>46%>49%>48% and the post-tax (PAT) margin is 12%>21%>25%>27% in four year respectively. The net cash flow in first year was Rs. 16,008 followed by second year Rs. 33, 691, third year Rs. 48,419 and in fourth year it was Rs.54, 910. The total net cash flow in four years adds to Rs. 153,028. The principal amount is Rs. 118,100 and total repayment on interest
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component and principal amount component is Rs.149, 280. The cash flow statement clearly depicts that CSC attained breakeven point in around fourth year.
Figure 11: Cash flow graph of Jalalpur CSC, District -Raebarelley (U.P.) - India. Y-axis represents monthly cash flow in Rs. and x-axis represents the months.
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Table 16: The balance sheet of the Jalalpur CSC, district Raebarelly, (U.P.), India
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Balance Sheet Year 1 Year 2 Year 3 Year 4
Sources of Funds
Retained Earnings 18,538 57,862 1,15,409 1,83,388
Liabilities 93,635 66,067 35,004 0
Total Liabilities and Equity 1,12,173 1,23,929 1,50,413 1,83,388
Uses of Funds
Cash & Cash Equivalent 16,008 49,699 98,118 1,53,028
Fixed AssetsGross Amount 1,18,100 1,18,100 1,18,100 1,18,100 Less: Accumulated Depreciation 21,935 43,870 65,805 87,740 Net Amount 96,165 74,230 52,295 30,360
Total Assets 1,12,173 1,23,929 1,50,413 1,83,388
9.9 Results of Cash Flow Analysis
We have drawn some inferences from this whole exercise. The inferences presented as follows include the main critical success factors of a CSC and the measures to be taken for its sustainability and financial viability: (i) G2C services play vital and pivotal role for the sustainability and financial viability of CSC. Major source of revenue inflow is from G2C services.Growth rate of revenue of G2C services is decreasing due to poor support activities in the value chain of CSC. So following measure may be taken on priority basis like—speedy backend computerisation and e -readiness of government department, speedy deployment of G2Cservices to CSC and fast installation of monitoring devices on computer of CSCs. More services may be added by government in G2C services basket for CSCs.
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(ii) Revenue from B2C and B2B services is less due to lack of awareness about ICT and benefits of CSC project. So the awareness campaign needs to be intensifying in rural community to make people aware of the profits of CSC offered services. (iii) Operating cost of CSCs is very high in initial year of operations. Loan liabilities are very high when combined with tax liabilities, depreciation of assets and operational cost the financial burden on VLE become unbearable. Ultimately they forced to stop the operation of CSC or exit from project. If G2C services are not deployed then situation become worst. So operational cost may be minimise by supplying uninterrupted electricity to CSC and ensure broadband connectivity to CSC. On the other hand discourage the VLEs from taking loan and SCAs should learn from field experience and follow like cost sharing or employee model. Simultaneously SCAs should select a VLE who is able to bear the initial capital and operational cost and must have entrepreneurship quality. SCAs must do sincere effort for enhancing their capacity and attitude for better earning.
(iv) Net cash flow is less in compare to expenses. No VLE can survive for four year on that net cash flow from CSC. The CSC reaches its breakeven point in four year. This time period is long for his/her survival under such condition. So Government and SCAs may support the VLE in initial years so that they can able to cross the valley of death and early achieve the breakeven status. Government may play catalyst role for sustainability of CSCs by deploying more works like survey, data collection and job work to CSCs. These critical success factors are crucial for determining the sustainability and financial viability of CSCs. Government must address these issues/factors on priority basis and in an integrated manner. Government may also plan for long lasting sustainable future of CSC to achieve inclusive growth in India like adopting knowledge based business model. The CSCs can well provide access to education, knowledge and information to rural community and each CSC may be transformed in to a village knowledge center. Consequently, these knowledge centers have the capability to transform the agrarian economy into knowledge based services economy of rural India.
9.10 Knowledge Based Business Model of CSC
This critical analysis of business model of CSC, indicates that sustainability and financial viability of CSCs depepends upon core issues and critical success factor that are identified in its strategic and business model analysis. In order to make a long lasting sustainablity and viability of CSCs we need to focus on thses critical success factors and make a knowledge base business
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model of CSC. This model is based on the hypothesis: ‘make access to education, information and knowledge through ICT enabled CSCs to rural people especially youth. The CSC will transform the young rural population into skilled human resources through IT education and english language courses. Consequently, India may be able to expand its base in the field of IT/ITeS outsourcing and give tough cost effective competition to other countries in IT/ITeS industry. This business model of CSC enables the IT/ITeS industry to penetrate in rural area and generate wealth through creating new job opportunity for rural people. If income of rural people increases it leads towards building more disposable income in rural community that can be tapped by CSCs for their sustainability and profitability. Consequently, these knowledge centers have the capability to transform the agrarian economy into knowledge based services economy in rural India.’
9.10.1 Main feature of this business model
• CCSs offer the IT education and English language proficiency courses to rural youth.
These youths seek jobs and if SCA –CSC channel provides them job opportunity then rest of rural youth as a resultant attracts in CSC offered IT and English courses that makes CSCs sustainable and profitable.
• SCAs play the role of driver in this business model. It bags the IT/ITes contracts/business
from domestic and offshore markets and then sublet to CSC. These CSC distribute work among IT and English educated youths. CSC acts as coordinator between SCA and the rural youth.
• The IT enable rural-workforce is cheap as compared to urban based workforce in India.
So, Indian IT/ITes services become cheap as compared to other IT/ITes providing countries in the world.
• This lucrative business attracts more private investment in rural areas, other than CSCs.
In future more and more IT infrastructure and parks are expected to develop. In future IT/ITes industry will get connected with most of rural households.
• Rural youth and specially women who are engaged in agriculture but their productivity is
insignificant, can be successfully shifted in service sector.
• This model paves the way to unlock the potential of rural India and bridge the rural urban
divide through inclusive growth in rural India
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Table 17 : Business model of Educational services Offered by CSC Revenue sources Delivery
channel Business model Revenue
model for SCA
Revenue model for VLEs
Payment mode
IT Training Offline/online Courses will be offered by computer training institutes with collaboration of SCA
Course fee Revenue share and commission
Course fee
Computer Education(class5to 10 student)
offline The CSC in conjunction with the local/national computer educational service provider would offer computer Education Programme to schoolchildren.
Subscription fees/Training fees
Subscription fees
Monthly fees
English skill training
Offline/online VLE will be trained as a English Skills Programme facilitator and will train students in basic English Speaking and Writing Skills through a set of CDs, books and other training material.
Training Fees VLE is the Service Provider
Course fees
Online Results Application forms
Online/offline VLE would use the web/CDs and provide these
Fees/Revenue Share/Publicity
Pay-per-use fees from users
Pay-per-use
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Mark-sheets Career Announcements Competitive Exam Practice (CDs) Online Job Search Online Assessment Services
services on a pay-per-use basis.
IT Infrastructure Hire services
Offline/online The VLE would provide his IT infrastructure - especially computer and the Internet to institutes interested in extending their courses in the rural markets.
Enrolments Hire Charges
Free
Resume Preparation and up loading
Offline/online VLE will train the youth about resume writing and uploading on sites on fee basis.
Resume Making Charges + Upload charges
VLE is the Service provider
Pay per use
Source: Draft document of CSC, Volume-I,(2006),Chapter-3, Department of Information technology, Government of India . NASSCOM Foundation Mumbai(India) and a NGO Multipurpose Social Service Society trained 24 student for IT-BPO sector in Cuddalore near Pondicherry.These students were trained in english language, communication skills, computer skills and personality development. These student finally got placements with a job of Rs.75,000 per annum in their own villages. This project therefore provides jobs without displacement; it is achieving huge success and identifying limitless opportunities in rural area.
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10. Discussion and Suggestions
The sustainability and financial viability of common service centres(CSCs) of India is analyse in full depth in this thesis..Before this analysis thesis describe the objectives , goal and relevance of CSCs.The background of this thesis covers under chapter literature review.The NeGP ans CSCproject detail make the foundation of this thesis. The sustainability and financial viability of common service centres is analysed on T-S-M analogy followed by strategic and cash flow analysis. .Here T- means technological frame work of CSC, S- means services anlysis of CSC while M- stands for market size/opportunity space of CSC and customer need.Market size/opportunity and customers segmentation and their need is analysed on the basis of primary and secondary data.The second part of this paper deals withThe issues and challenges that encounterd in implementation process of CSC project are analysed in full depth. This chapter of thesis made the wayfor strategic analysis of CSC project..How the CSCs become sustainable and financially viable?this is the pivital question of this thesis.Strategic analysis is done to find its answer. What are the core issues and criticall success fators that determines the sustainability and financial viability of CSC. Four major strategic tools are used for strategic analysis. These are—SWOT Analysis,Portes’s Five forces mehtod,Value chain analysis(VCA) and business mapping/eco system analysis of CSC. We draw some important inferences and identified the core issues and criticall success factor that affects the sustainability and financial viability of CSC are—(i) Delay in the deployment of G2C services and mounting of monitoring devices(OMT) on computers of CSCs. (ii)Poor connectivity of SWAN . Most of the CSCs are not even connected with SWAN and they are forced to use private internet data card,it increses their operating cost.
(iii) Back end computerization of government department is inadequate and its speed is quite slow. E- readiness of states is also slow.These factors become root cause in delaying the deployment of government services to CSC.
(iv)Government support to VLEs for their sustainability in intial days of CSC’s operation is not available yet due to delay in G2C services deployment and OMT installation.
(v)Content and services in case of B2B and B2C are insufficient in regional languages.
(vi)Rural community is not aware properly about CSC project and benefits of CSC offered services. B2C and B2B services are not so much popular in rural community due to the this lack of awareness.
(vii)Selection of appropriate VLEs by SCA is a crucial factors.Most of VLEs are not operating the centres because of unavialability of G2C services.On other hand those VLEs have entrepreneurship quality they surviving without G2C services
(viii) Capacity building effort for the stakeholders(government fuctionaries,SCAs and VLEs) of CSC project is not satisfactories.The lower government functionaries are not taking proper interest in implementation process of CSC project.The progress of CSC project implementation
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is hampering due to this reason. Untrained or undertrained VLEs are not taking interest in running the centres due to non availability of government services(G2C).
(ix) Irregular and insufficient supply of electricity to VLEs increse their operating cost.
These core issues and critical success factors are taken into account in business model analysis of CSC. The cash flow analysis of a CSC is performed to quantify and specify the core issues and critical success factors as mentioned above.This analysis shows that the net cash flow of a CSC is considerably less amount. If any VLE takes the loan then it faces the heavy financial burden of interest component, principle amount repayment, taxes and operating cost. Finally VLE is forced to withdraw/exit from the CSC operation. The cash flow analysis shows that a CSC reaches its breakeven position in four years. This period is too long for a CSC operator(VLE). (S)he can not survive only on a small income of CSC for four years. Our Study shows that deployment of G2C services to CSCs are main critical success factors for sustainability and fianacial viability of CSCs. The value chain analysis of CSC shows that support activites of CSC that is facilated by government and SCAs plays cricial role in the successful implementation of CSC project. Progress of support activities (connectivity, deployment of G2C services, OMT installation, regular electricity supply, back end computerisation of government departments) is not satisfactory. How to translate the core issues and critical success factors which are identified during strategic analysis and business model analysis of CSC that are responsible for the sustainability and financial viability of CSCs? Here are some suggestion proposed as follows. Table 18 : Core issues responsible for sustainability and viability of CSC and suggestions. Core Issues/Critical success factors for sustainability and viability of CSCs
Suggestions
Delay in deployment of G2C services
• Speedy back-end computerisation of government department on PPP model.
• The State Governments may be encouraged to establish a centralised state-of-the-art Data Centre.
• Speedy installation of OMT on CSC’s computers by SCAs • Effective capacity building effort for government
functionaries to change their attitude and enhance their ICT based knowledge
• Better ccordination of SDA with SCA and effective monitoring of implementation at district/tehsil/block and village level and fixed the responsibilities of government official.
Inconsistent connecyivity or non availability of
• Speedy roll out of SWAN and provide qualitative and consistent connectivity to CSCs.
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SWAN connectivity • Promote WiMAX in remote area. Selection of inappropriate SCA and delay in their selection of by SDAs
• State government(SDA) may select SCAs as soon as possible
• Select a SCA which have experience in field of ICT and have proper resources and positive attitude.
Lack of entreprenuership in VLEs
• Select VLEs who have entreprenuership quality. If we select VLE with the right aptitude and train him how to do business, he can earn a living even by selling ice to an Eskimo,”
• A VLE must have following ability—entrepreneurship, computer/IT skill, strong social commitment and command respect with in the community and capacity to bear the financial burden during early stage og CSC operation.
• VLE should have aptitude, acumen, and inclination for doing business
Insufficent of Capacity building efforts for all stakeholders(government functionaries,SCAs,VLEs) of CSC project.
• The capacity building strategy should be based on three key aspects –capacity for whom, capacity for what and capacity by whom.
• A capacity development plan should be framed for long term and immediate need.
• Develop a comprehensive training content for all stakeholders in regional language.
• Determine the ‘knowledge/skill gaps’ and trained all stake holders to bridge this knowledge/skill gap.
• . • VLEs need the training in the following area--- Rural/social
entrepreneurship, harnessing opportunities and assessing business potential, interpersonal relationships, managing networks, funds, costing, project plans; Computer ,personal and organisational skills, interfacing between Government and community.
• SCAs need training in field of ---operational managemen, understanding of market linkages and the demand-supply dynamics, benchmarking and learning from best practices, assessing opportunities in rural area, conflict resolution, managing networks, project planing and implementation, computer skills, public administration and e-Governance, risk assessment,, technology management mentoring.
• Government Agencies/enabler and regulator needs training in following field-- Sensitization on the principles of e-Government to disseminate a correct understanding of the subject, Change Management, Government Process Re-
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engineering, project management and quality assurance standards, understanding technology options, appreciation of rural entrepreneurship as an alternate strategy for rural wealth generation, working knowledge and skills on PPP Models, IT architecture and standards, learning from existing best practices.
Lack of Awareness about ICT and CSC project in rural society
• A massive awareness campaign needs to be conducted to educate people about what ICT can do to improve their lives as well as empower them.
• Make an awareness compaign strategy according to need of different stateholders(rural consumers, village level entrepreneurs and content& service providers,SCAs,government fuctionaries and rest of the nation) of CSC ecosystem.
• Address the SDA and SCAs one to one basis without help of media.Whileuse media in case of VLEs,rural consumers,CSP providerand rest of nation.
• Customise the communication according to regional diversity.
• Use unconventional media tool like—mela(fair),hatt(market),yatra(procession),festivals and street plays.
• Take the help of opinon leaders like doctors,techers,elected member of panchyats.
Inadequate content in regional languages
• Create sufficient content and services for B2C and B2B services in regional languages with the colloboration of private sector and government.
• Technology can be effectively used to convert this content into a CSC friendly format.
• The core services - agriculture, education, health, and entertainment need local need based content. These can be develop by SCAs.
Insufficent and irregular supply of electricity to CSC
• Sufficient and regular supply of electricity should be ensured and alternative energy sources should be evolved like –solar energy, more use of laptop inspite of PCs.
Lack of financial support to VLEs in early stage of CSC operation
• Government have this provision of Rs, 3,000/-per month but they are not getting it due to administrative reason.Expedite the process so that VLEs can survive in early stage and can cross the valley of death.
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11. Conclusion The CSC project is a great effort by the government of India making government and commercial services accessible to rural people at their doorstep on affordable prices with a vision to bridge urban-rural development divide and to harness ICT for addressing the major socio-economic problems of rural India. The goal of the CSC project is to empower the rural community and catalyse social change through modern technologies. These CSCs are expected to become a vehicle for rural transformation and inclusive growth to unlock the potential of rural India. Analysis of technological framework of CSC indicates need for improving connectivity and infrastructural facility on priority basis. On the other hand organisational cohesion and better coordination between SCA and government agencies like SDA is needed. Success and sustainability of CSC very much depends on selection of appropriate SCAs and VLEs. Analysis of services framework suggest that delay in deployment of G2C services and road blocking attitude of government functionaries are demotivating the VLEs consequently hampering the progress of CSC roll out .CSC scheme is facing major challenges like lack of content in local language, lack of awareness about CSC in rural community, inadequate capacity building effort to enhance the efficiency of VLEs and government functionaries,poor and or non connecivity of CSCs to SWAN and interrupted-insufficient electicity supply to CSCs,delay in installing OMT on computers of CSCs and slow speed of back end computerisation of government department. These challenges must be addressed in an integrated manner. Strategic analysis of CSC project gives a broad picture of internal and external potential and challenges that helps us to focus on some key issue like how to build disposable income in rural community and for building market linkages through CSC offered services. The strategic analysis identified the core issues and critical success factors that determines the sustainability and financial viability of CSC. These issues and factors taken into account in business model analysis of CSC. The cash flow analysis of a CSC quanfied and specified the core issues and critical success factors that are responsible for sustainability and viability of CSC.The above analysis suggest that government and SCAs may attened these issues and factors on priority basis. Critical analysis of existing business model of CSC is suggests that the some new model should also be adopted for sustainability and profitability of CSC. Those SCAs who adopted employee model or shared model of investment are successful in compare to those who left their VLEs for full investment. This thesis suggest a supplementary knowledge based business model of CSC on the basis of building a pool of skilled cyber work force in each village through CSC offered IT training and English skill courses. On a driving seat SCAs bags the IT/ITeS business contracts from domestic and foreign market and execute the task through VLEs-rural cyber workforce channel at an cheaper cost. So the benefits of outsourcing will trickle down in rural community that increase the disposable income of rural people and uplift their quality of life . This strategy will bridge the urban-rural divide and India will able to achieve an inclusive growth. Only with an honest and involvement of all stakeholders of the project, will the common service center initiative what it had to set out to doto develop a platform that can enable government, private and social sector organizations to integrate their social and commercial goals for the benefit of rural population in the remotest corners of country through a combination of IT and non IT services.
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11.1 The Scope of Further Research
Further research should be done across the CSCs in all other states to understand their implementation challenges and core issues that determine the sustainability and financial viability of CSC project. The emerging business model should be study in all part of country and whethere these model can be replicate in other states of India.The CSCproject in India should be compared with similar international initiative in order to adopt the best practices. Knowledge based business model of CSC is providing an long lasting sustainable model of CSC . This model have the potential to integrate the IT/ITeS industry of India to CSCs.This model is adopted by M.S.Sawminathan Foundation –Chennai( India) on pilot basis but its results shows its limitless potential .Furhter study is required to explore this model.
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[2] The State level workshop on e-Governance (17th April2008) at Luck now, Uttar Pradesh, India organised by department of IT& Electronics, Government of Uttar Pradesh, India. [3] Club of Rome:' No limit to knowledge, but limit to poverty'(2002) [4] The world is Hot, Flat and Crowded by Thomas L. Friedman 2010 [5] Can information & communication technology application contribute to poverty reduction? The lesson from rural India. By- Simone cchinia & Christopher; Aeclac, United Nation, casillea, Santeago, Chile. [6]The Millennium Development Goals Report, 2010, UN, New York, 2010, page 72 [7] Lars-Hendricks Roller and Leonard Waverman, “Telecommunications Infrastructure and Economic Development: A Simultaneous Approach”, AER (2001) [8] Leonard Waverman, Meloria Meschi and Melvyn Fuss, “The impact of telecoms on economic growth in developing countries,” Vodafone Policy Services, 2005. [9] See Christine Zhen-Wei Qiang and Carlo M. Rossotto with Kaoru Kimura, “Economic Impact of Broadband,” in Information and Communication for Development, 2009. -World Bank. [10] BCG Report: The Internet’s new Billion: Digital Consumers in Brazil, Russia, India, China and Indonesia. [11] [World Telecommunication/ICT Development Report 2010 [12] Digital Britain report, June 2009. [13[TRAI report on Broadband, Dec. 2010, New Delhi, India [14] ITU World Telecommunication/ICT Indicator database-2010. [15] World Internet Stats., 2010 [16] BCG Report 2010: The Internet’s new Billion: Digital Consumers in Brazil, Russia, India, China and Indonesia [17] .(Economic survey of India,2009-2010) [18] The Economic Survey of India 2010-2011 [19] IMRB&IAMAI I-CUBE Report-2009-2010 [20] Confederation of Indian Industries (CII): Deployment models and required investment for developing rural broadband infrastructure in India) [21]& [22] What role cans ICT enabled Governance Reforms play in India’s Development? Dissertation MPA, LSE 2009 ,A dissertation submitted by Dipinder Sekhon to the MPA Programme, London School of Economics and Political Science, in part completion of the requirements for the MPA Public and Economic Policy May, 2009 [23] IIITB, 2005: Information and Communication Technologies for Development: A Comparative Analysis of Impacts and Costs from India. Indian Institute of Information Technology, Bangalore (IIITB) [24] Heeks R., 2004: ICT Initiatives, Women and Work in Developing Countries: Reinforcing or Changing Gender Inequalities in South India? IDPM Development
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[26] Informatics Working Paper no.20. (ARC, 2008: Promoting e-Governance: The SMART Way Forward: Administrative Reforms Commission of India.) [27] NIC, 2008, p.: Annual Report 2007-08. [28] ARC, 2008, p. 134. Promoting e-Governance: The SMART Way Forward: Administrative Reforms Commission. [29] (www.mit.nic.in as access on 15 May 2011). [30] (MSSRF, 2004 MSSRF. (2004, June). National Alliance for Mission 2007: Every Village a Knowledge Centre. From M S Swami Nathan Research Foundation (MSSRF): [31] CSDMS, 2008, pp. 2-4 CSDMS. (2008, July 31). Telecentre Stakeholders Forum Report 2008.] [32]& [33] TRAI Report on Broadband, December, 2010, New Delhi, India. [34] Planning Commission of India: Eleventh Five Year Plan (2007–2012), Foreword. [35] National study on financial inclusion: Seeding Financial Inclusion by Sameer Kocchar-SKOCH Development foundation, 2010 [36] The Common Services Center Scheme Opportunities for Rural Financial Services-IL&FS by Alok Bhargwa February 2007 [37]& [38] TRAI Repot2010, page 36, New Delhi, India [39] HIGH IMPACT, PRO-POOR e-GOVERNANCE APPLICATIONS Identifying “Killer Applications” and Best Practice Models of e-Governance through Community e-Centers in the Philippines ( Gigo Alampay and Joel Umali) [40] L C Singh President & CEO, Nihilent Technologies Pvt. Ltd., his message for compendium of Transforming Government: e-Governance Initiatives in India ,Edited by R K Bagga ,Piyush Gupta Icfai Books The Icfai University Press ,first edition 2009 [41] http://www.mit.gov.in/sites/upload_files/dit/files/documents/annualreport2009 10(1).pdf access on 17-05-2011] [42] The e Governance Approach in India: The National e Governance Plan (NeGP) By Dhrupad Mathur, Piyush Gupta and A. Sridevi, 2009. [43]http://www.mit.gov.in/sites/upload_files/dit/files/Compendium_FINAL_Version_110211.pdf access on 16-05-2011 [44] http://www.mit.gov.in/sites/upload_files/dit/files/documents/annualreport2009-10 (1).pdf access on 17-05-2011 [45] (NIC, 2008, p. 2NIC. (2008). [46] Annual Report 2007-08(DIT, 2009DIT. (2009). National e Governance Plan (NeGP). [[47] http://www.mit.gov.in/content/mission-mode-projects access on 16-05-2011) [48] (ARC, 2008, p. 134ARC. (2008). PROMOTING e-GOVERNANCE: The SMART Way Forward. From ADMINISTRATIVE REFORMS COMMISSION [49] http://www.mit.gov.in/sites/upload_files/dit/files/documents/annualreport2009-10 (1).pdf access on 17-05-2011 [50] DIT, Annual report, 2009-2010 [51] http://www.mit.gov.in/content/common-services-centers access on 17-05-2011
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[52] Administrative Reform Commission (India) Report, 2008, page. 129 [53] The State level workshop on e-Governance (17th April2008) at Luck now, Uttar Pradesh, India organised by department of IT& Electronics, Government of Uttar Pradesh, India. [54] Base line survey to identify location criteria, basket of priced services and revenue potential foe CSCs-National Report ,Executive Summary January, 2008 by ORG Center for Social Research-A division of AC Nielson ORG-MARG Pt. Ltd. [55] Sahaj(A SCA) Mitra portal, www.sahajcorporate.com, access on 25-02-2011 [56] The Base line survey to identify location criteria, basket of priced services and revenue potential for CSCs-Uttar Pradesh, India Report, January, 2008 by ORG Center for Social Research-A division of AC Nielson ORG-MARG Pvt. Ltd. [57] Market Survey 2008-09, by Indicus Analysis pvt. ltd., New Delhi, web site: www.indicus.net. [58] http://www.mit.gov.in/content/common-services-centers access on 22.05.2011 [59] Status of common service center programme in India: Issue, challenges and emerging practice for rollout. By-Rajanish Das and Atashi Battacherjee-I.I.M. Ahmadabad, India, February 2011, W.P. No-2011-02-03, page 20. [60] http://www.mit.gov.in/content/common-services-centers access on 04-6-2011 [61] Status of common service center programme in India: Issue, challenges and emerging practice for rollout. By-Rajanish Das and Atasgi Battacherjee-I.I.M. Ahmadabad, India, February 2011, W.P. No-2011-02-03, page 25. [62] Status of common service center programme in India: Issue, challenges and emerging practice for rollout. By-Rajanish Das and Atashi Battacherjee-I.I.M. Ahmadabad, India, February 2011, W.P. No-2011-02-03, page 22 [63] Draft document of CSC, Department of Information Technology, Government of India, Volume-I, chapter-8, Capacity building, page 17. [64] Draft document of CSC, Department of Information Technology, Government of India, Volume-I, chapter-5 Connectivity, page29 [65] & [66] Draft document of CSC, Department of Information Technology, Government of India, Volume-I, chapter-10, Implementation, of Information Technology, Government of India, Volume-I, chapter-7, Creating Awareness, page, 3 [67] Status of common service center programme in India: Issue, challenges and emerging practice for rollout. By-Raja Nish Das and Atashi Battacherjee-I.I.M. Ahmadabad, India, February 2011, W.P. No-2011-02-03, page 21. [68] How Competitive Forces Shape Strategy By M.E.Porter, Harvard Business School Review, March-April 1979. [69] What is the Strategy? By Porter,M.E.(1996),Havard Business School Review,Nov.-Dec.-61-78.,Value chain. [70]Business model analysis by Richard G. Hamermesh, Paul W. Marshall, Taz Piromhamed; January22, 2002, page 1, Harvard Business School Publication No-9-802-048]. [71]Creating the Value chain. (Harris, R.W., A. Kumar, et al.-2004 –“Sustainable Tele centers? Two cases from India”. [72] Khelldi, Y.-2001-What Works: The Infocenter ModelW.e. Center
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[73] Business model analysis by Richard G. Hamermesh, Paul W. Marshall, Taz Piromhamed; January22, 2002, page 1, Harvard Business School Publication No-9-802-048]. [74] http://en.wikipedia.org/wiki/Cash_flow access on 17-05-2011.
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Index of Figure
Figure 1: Changes in population pyramid --India (1971-2016)
Figure 2: Framework of National e-Governance Plan (NeGP)
Figure 3: Core Infrastructure of NeGP.
Figure 4: Technological framework of CSCs.
Figure 5: Selected Service Center Agency (SCA) state wise detail
Figure 6: Service framework of CSC.
Figure 7: The progress of CSC rollout as on 30th April2011
Figure 8: Content and Services Ecosystem of CSC
Figure 9: Framework of Value chain
Fifure 10: Cash flow diagram
Figure 11: Cash flow graph of Jalalpur CSC, District -Raebarelley (U.P.) - India. Y-axis represents monthly cash flow in Rs. and X-axis represents the months.
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Index of Table
Table 1: Scope of NeGP and mission mode projects (MMP) of NeGP
Table 2 : Stake holders of CSC project and their role.
Table 3 : Type of services offered by CSCs
Table 4: Government to Citizen services(G2C) issues from Tehsil Anoopshahar, District:
Bulandshahar(U.P.),India
Table 5: Top 80% Revenue Generating Services of CSC.
Table 6: SWOT Analysis of CSC.
Table 7: Portes Five Forces Matrix for CSC
Table 8: Porter’s Five forces Analysis of CSC
Table 9 : Business map of CSC.
Table 10: Summary of Business model of CSC
Table 11: The cost detail of basic business model of CSC
Table 12: Asset detail of Jalapa CSC, District –Raebarelly, (U.P.), and India
Table 13: The cash flow detail of VLE-Jalalpur, district-Raebarelly, (U.P.), India
Table 14: The Profit and Loss statement of Jalalpur CSC, District –Raebarelly, (U.P.), and
India
Table 15: The Cash flow statement of the Jalalpur CSC, district - Raebarelly, (U.P.), and India
Table 16: The balance sheet of the Jalalpur CSC, district Raebarelly, (U.P.), India
Table 17: Business model of Educational services Offered by CSC
Table 18: Core issues responsible for sustainability and viability of CSC and suggestions.
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Appendix-I
Survey on Common Service Center (CSC)-General: Conducted by Satya Prakash Patel, Survey Form-A Part I: General Detail of Respondent 1-Name-Mr./Ms/Mrs.— 2-Father’s/Husband Name----- 3-Address (Village/Block/Tehsil/District) ----- 4-Age---- 5-Educational Qualification--- 6-Technical /Professional Qualification (If any) 7-Occupation/Profession Part II: QUESTIONS 1-Do you know about Common Service Center (Jan Seva Kendra)? Yes/ No, if yes, from which sources do you know about CSC—[a] Newspaper [b] T.V. [c]other source---------- (write the source) 2-How many trip you made to get your certificates (caste, income, residence) and Khatauni (land record) to Tehsil? ------ 3-How much you spent on travelling to get these certificate and khatauni (land records) from tehsil? Rs. ---- 4-What is the average time to travel to tehsil? ------hours 5-What is the actual waiting time to get these certificates from tehsil? [a]3hr [b]6hr [c]One day [d] two day [e] more than two days 6-What is the average wages loss? Rs. 100/Rs.120/Rs.150/Rs.200/Rs.250 7-Do you pay money to agents or intermediaries/? Yes/no ------ 9-What amount you paid to agent (advocate/munshi [writer]/mediator)? Rs. --- 10-What amount do you spent on stationary/stamp/ticket? Rs------ Part III: 1-Do you think that CSC will save your money and time because it provide services at your door step at affordable cost? Yes/No 2-Do you think that CSC will increase transparency in government functioning and reduce corruption? Yes/No 3-Do you think that CSC will make government functionaries to become more accountable to public? Yes/No 4-Do you think that CSC make convergence between government and citizen (i.e. government come closer to citizen)? Yes/No 5-Do you think CSC provides more government related information/schemes that empower
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them? Yes/No 6-Do you think that CSC will provide new access to education/Knowledge and information through internet? Yes/No 7-Do you think that you will get agricultural health, commercial services through CSC? Yes/No 8-Do you think that CSC offered Computer and English education facility provides job opportunity to rural youths? 9-Do you think that women should get computer and English education for their income status improvement? Yes/No 10-Do you think CSC will create job in rural area through computer education and attract information technology/information technology enabled service (IT/ITeS) in rural area? Yes/No 11-Do you think that access work force engaged in agriculture will shift to service economy through CSC offered service? Yes/No 12-Do you think that CSC offered services help in bridging developmental gap between urban India and rural India and leads to India to achieve an inclusive growth? Yes/No Date and place------- Name of Respondent
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Appendix-II
Survey of VLEs (Village Level Entrepreneur) of Common Service Center (CSC) to study the Business trends and challenges By Satya Prakash Patel Survey Form -B Instruction to fill the details This survey questionnaire contains different type of questions- 1-please tick any one in alternative question 2-please fill the blank where required 3-Please answer Yes/No format which is applicable 4-Write few words/sentences where required 5-VLE also fill this investment cost analysis table (Note--Figure is filled in this table as an example but you have to filled these costs according to your real condition) Investment Cost Analysis Table Capital cost Fixed cost Variable cost Equipment Cost(Rs.) Item Cost(Rs.) Item Cost(Rs.)
Two P.C.+O.S.
44,000 Capital cost recovery EMI+12% Interest for four year
Connectivity charges
SWAN Annual charges
Inkjet printer
7,000 Hardware maintenance(p.a.)
10% of asset value
Subscription charges
100 per subscription
Dot matrix printer
7,500 Hardware Insurance 1% of asset value
Electricity charges
800
Digital camera
7,000 Training(per VLE)p.a. 2,500 Generator cost
13 per hour
TV+VCD Player
6,000 Man power cost(per month)
1,500
Generator (750VA)
25,000 Monthly fee to SCA 500
UPS (500VA)
2,600 Rent for premises per month
1,000
Wireless equipment
25,000 Business promotion(per month)
500
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IT Software
2,000 Travelling cost(per month) 500
Furniture & fixture
15,000
Contingency/Miscellaneous 1,400
Phone line 1,500 Others 9,400 Total 1,47,000
Part I: General Information of VLEs 1-Name-Mr./Ms/Mrs.— 2-Father’s/Husband Name----- 3-Address (Village/Block/Tehsil/District) ----- 4-Age---- 5-Educational Qualification--- 6-Technical /Professional Qualification (If any)-- 7-Occupation/Profession---- 8-Name of CSC and address (village/block/tehsil/district) --- 9-Number of villages ------- and population------------- covered by this CSC. Starting date of CSC (Jan Seva Kendra) ----- 10-Distance of CSC from Block head quarter-------Km and from Tehsil headquarter------Km. Part II: Questions 1-What is the name of your sate service agency (SCA)? --------------------------.Do you satisfied with them? Yes/No. if not please give the reason. -------------- 2-What is the mode of agreement with SCA with VLE? [A]The whole investment cost is bear by SCA [b]The whole investment cost is bear by VLE [c]The investment cost is shared by SCA and VLE in ration SCA: VLE= [i] 80:20 [ii] 50:50 [iii] if other please mention------- 3-How much amount you spend on establishing this CSC (Capital cost)? Rs. ---- 4-How much amount you spend on operating the CSC? (Variable+ fixed cost)[See the cost table]------- 5-Do you taken loan from any bank/private person? Yes/No. If yes, then on what interest rate? 6-How long you take time to start earning positive cash flow from CSC (i.e. when your monthly income become more than your monthly expenditure]? [a] 3 months [b]6months [c]One year[d]2 year [e]3 year[f] 4 year or more 7-How long you take to reach your income at breakeven point(when your all cost covered and you are purely earning)?[a]1 year [b]2year [c] 3 year[d] 4 year [e] if more or less then mention the year----- 8-What will be the maximum amount of business of your CSC may do in a month at its mature
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position? [A] 25thousand[b] 50 thousand [c] one lac[d]two laces [e] three laces [f] If more or less mention the amount Rs. ------- Part III: CSC offered services related questions 1-Do you think that CSC will increase your social status and credibility in society? 2-Are you using SWAN or other internet services (please mention the name of internet provider company-------)? Are you facing any problem in internet connectivity? Yes/No, if yes then please mention the problems. 3-How many hour electricity supply are you getting ------and how many hour ------- you use generator and what is the running cost of generator per hour? Rs. ----- 4-Your CSC is in a rented building or in a government /own building? If rented then the amount of rent Rs. ------- 5-Whethere Government service (G2C) like certificates khataunies (land record) etc. deployed to your CSC online? Yes/no if yes then what is the charges for public-. . What is the cost sharing ratio between VLE and SCA (Sahaj) ? 6-Are you getting proper support from government officials and functionaries? If not please mention reasons 7-Whethere sufficient content is available in local languages(Hindi) in case of government to citizen services(G2C) and Business to citizen services(B2C) ?Yes/No 8-Have got any training for running CSC and its business activity? Yes/No, if yes then who gave this training? 9-Do you satisfy that rural people and government employees are aware of about CSC schemes and its benefits? Yes/NO, If not satisfactory then what is your suggestion? 10-Which services have the main demand in public? ----- [A]computer/IT training, English education[b] Agricultural services [c] Health services [d] Commercial services like e-ticket, insurance, entertainment] Part IV: Knowledge base Business model of CSC Main feature of this business model are following---
• CCSs offer the IT education and English language proficiency courses to rural youth. These youth seeks job and if SCA –CSC channel provide them job opportunity then rest rural youth attracts in CSC offered IT and English courses that’s makes CSC sustainable and profitable.
• SCAs will play the role of driver in this business model. SCA will bags the IT/Its
contracts/business from domestic and offshore markets and then they sublet to CSC. These CSC will distribute work among IT and English educated youths. CSC will acts as coordinator between SCA and these rural youth.
• This IT enable rural workforce is cheap in compare to urban based workforce in India.
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Indian IT/Its services become cheap in compared to other TI/ITes providing countries in the world.
• This lucrative business attracts more private investment in rural areas, other than CSCs.
In future more and more IT infrastructure and parks will develop. In future IT/ITes industry will connect with most of rural households.
• Rural youth and specially women who are engaged in agriculture but their productivity is
insignificant, they can be successfully shifted in service sector.
• This model paved the way to unlock the potential of rural India and bridging the rural urban divide through inclusive growth in rural India.
Some questions are based on this business model, please read this and answer. 1-How many students are in IT/Computer courses in a period of three month? ------ And what is the earning from these courses? Rs. --------- 2-who are the main training institute/universities that provide IT/Computer course? ----------------------------------------------------------------------------------------------------------------------What is the duration of courses----------months? 3-How many students enrolled in English education courses in a period of three? -------- 4-Whether these IT/computer and English educated youth get job? Yes/No 5-If yes then what are the nature of job---- [a] computer operator [b]private companies [c] government and semi - governmental institution. [d] Other 6-What are the job opportunities comes through SCA-VLE channel to these IT/computer ,English educated youth from domestic market ( If applicable please tick on more than one options) [a]Data feeding of government departments and agencies [b]MIS feeding of NREGA Scheme [c]Computerisation work of government departments and agencies. [d]Job work and computerization work from private companies and firm 7-Is there any possibility that SCA provide outsourcing computer software and IT enable services work to VLE and this outsourcing work performed by these IT/computer educated youths? Yes/no 8-Whether this Knowledge based business model of CSC have shining future? Yes/No 9-Whether this knowledge based business model is able to expands the outsourcing IT/ITeS industry in rural India? Yes/no 10- If you have any suggestion regarding this knowledge based business model of CSC, please write in brief.
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Part V: GENERAL QUESTIONS (VLEs should answer these questions as common man) 1-Do you think that CSC will save your money and time because it provide services at your door step at affordable cost? Yes/No 2-Do you think that CSC will increase transparency in government functioning and reduce corruption? Yes/no 3-Do you think that CSC will make government functionaries to become more accountable to public? Yes/no 4-Do you think that CSC make convergence between government and citizen (i.e. government come closer to citizen)? Yes/No 5-Do you think CSC provides more government related information/schemes that empower them? Yes/No 6-Do you think that CSC will provide new access to education/Knowledge and information through internet? Yes/no 7-Do you think that you will get agricultural health, commercial services through CSC? Yes/no 8-Do you think that CSC offered Computer and English education facility provides job opportunity to rural youths? 9-Do you think that women should get computer and English education for their income status improvement? Yes/No 10-Do you think CSC will create job in rural area through computer education and attract information technology/information technology enabled service (IT/ITeS) in rural area? Yes/No 11-Do you think that access work force engaged in agriculture will shift to service economy through CSC offered service? Yes/No 12-Do you think that CSC offered services help in bridging developmental gap between urban India and rural India and leads to India to achieve an Inclusive growth? Yes/No Date and place------- Name of Respondents
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Appendix-III
Interview on CSC Project by Satya Prakash Patel Personal Detail 1. Name 2. Age 3. Educational qualification 4. Profession and work experience 5. Place of posting and designation Questions of Interview 1. Dear sir, do you know about common service scheme? If yes, please mention the sources of information. 2. Do you agree that government to citizen (G2C) services offered by CSCs will save the time and money of rural people? 3. Do you think that CSC offered G2C services will increase transparency in government functioning and make government functionaries more accountable to public? 4. CSC offered G2C services on affordable cost at their door steps to rural people. Do you think that it will empower the rural community? 5. Do you think that government functionaries are cooperating to the CSC operators (Village Level Entrepreneurs: VLEs)? 6. Rollout progress of CSC in U.P. is slow in compare to other state of India. What are the main causes/factors responsible ? Do you have any suggestions? 7.Do you think that government official/functionaries are well briefed about this scheme or you think that more awareness and capacity building effort needed? 8.Do you think that Internet connectivity of CSC through SWAN is satisfactory? 9. Do you think that electricity connectivity and its regular supply is available to CSC? If not then what are the alternative solution? 10.Do you think that implementation of CSC scheme is satisfactory ?Do you think that there is an good cooperation between government agency(SDA) and private player(SCA) 11. CSCs are offering B2C and B2B services. Do you think that there is a market potential in rural area for these services? Presently these services are provided by some private agents and shopkeepers in rural area. Do you think that CSC owner (VLE) will able to compete with existing player of markets? 12. AC Neilson -MARG survey agency states in 2006 that every rural Indian spends around Rs. 320 per month on CSC offered services. Each CSC has six villages and around 8000 population. Do you think that CSC has enormous potential? What percentage of that potential is being tapped presently?
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13.CSC are also offering educational services like computer education/Information technology (IT), English skill courses, Vocational skill courses etc. Do you think that these Computer/IT and English skilled rural youth are cheap cyber workforce for software and /BPO-Call centres industry? And how they will employ in this industry? Knowledge Based Business Model of CSC NASSCOM launched a pilot project in Pondicherry. This is a Knowledge based Business model (KBBM) of CSC. This model is based on the hypothesis that—CSC offered IT/Computer and English courses will make skilled cyber workforce in rural area. SCAs will bags business contacts and delegate these works to their CSC. CSC owner (VLE) will distribute this job work among skilled cyber work force available in village. They will perform the job and completed work send to SCAs through VLEs. This pilot project was started with 24 rural youth and shown limitless opportunity for rural youths. Youth are earning around 8to 10 thousands rupees per month in their locality. 14.Do you think that this Knowledge base business model(KBBM) of CSC can be replicated in all over India? 15.Do you think that this KBBM of CSC increase the job opportunity in rural India and enhance the income level as well as their living standard? Do you think that this situation minimise the migration of rural youth to urban area? 16.Do you think that KBBM of CSC will helps in shifting from agriculture to services economy and reduce the burden on agriculture? 17.Do you think that KBBM of CSC will capable to utilise the educated women workforce and this leads to gender equality and women empowerment? 18. Do you think that KBBM of CSC will help in bridging the digital and developmental divide between rural India urban India and leads to an inclusive growth? 19. If you have more idea/thoughts and suggestion regarding CSC scheme, please write down. Name of Respondents and Designation Date and Place: --------
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Apendix-IV: Publications of Author
1. Patel,Satya Prakash; “Towards a sustainable society: With the use of information and Communication Technology (ICT)with special reference to e-governance in India” Sustainability fitgiand space exploration: Report to the Slovenian Association for the Club of Rome / Proceedings of the Workshop on Sustainability and space exploration, Ljubljana, Slovenia, December 7, 2010; [editors Aleksander Zidanšek and Ivo Šlaus]. Ljubljana: Slovensko združenje Rimskega kluba, pp 81-100, 2011
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