Dr K T Arasu
Director, Alternative for India Development (AID), Chennai
“CSCs should not be viewed merely in the conventional business terms. This is an investment in rural ICT infrastructure similar to road connectivity to connect the unconnected villages with the government and business services. The investment will yield high social returns in terms of various benefits to the rural masses”
Why did AID choose one of the most poorest districts of India for setting up Common Service Centres (CSC)?
Palamau zone is a hard core naxalite area. It is also one of the poorest and drought prone regions of India with high degree of distress migration. The delivery of government services in the region is also lackadaisical. We went ahead with establishing CSC in the region as we have been working in Palamau zone for more than 23 years, implementing various development programmes under community empowerment, basic and adult education, basic health and livelihood missions. We are aware of the culture and ethos of the region. We conceived Information and Communication Technology (ICT) as a means to drive forward our above mentioned four missions for ensuring rural prosperity and better quality of life of the rural masses.
Achieving fi nancial viability is a challenging task in rural areas. What has been your experience?
As you know, every business has a cycle with specifi c gestation period. We started our CSC enterprises in April 2007 and have completed two years. The fi rst year was the roll out phase, in which our energy was spent in setting up of CSCs in 600 panchayat locations in Palamau, Garwah and Latehar districts. In the second year, we paid attention on building up of our portals and creating networks for CSCs for starting various services. We have not reached a stage of fi nancial viability and we foresee at least two more years to make it a sustainable business. We have few successful stories of running CSCs on profi table basis, but most of the CSCs are yet reach a sustainable level. The organisation has invested its resources and we expect revenue fl ow in the years to come.
We are also of the view that CSCs should not be viewed merely in the conventional business terms. This is an investment in rural ICT infrastructure similar to road connectivity to connect the unconnected villages with the government and business services. The investment will yield high social returns in terms of various benefi ts to the rural masses in the form of fast track government, banking, postal, education, health, information and communication and business services. Further, through CSCs, we are now laying another service layer at Panchayat level to provide fast track services to citizen through decentralised access points. This service point would ease the life of the rural masses as well as add greater rural prosperity value.
The government has included a provision of fi nancial support to CSC operators. Has it helped in your case?
Yes, the government has a provision for support to SCAs, which is called ‘revenue support’. This is intended to make up for the loss in the early phase of the implementation of CSC project. The quantum of amount depends on the deal agreed through bidding process under Public-Private Partnerships. The core issue is that we have not yet received the revenue support from Jharkhand Government. This is a matter of big concern for us. Being an NGO, we could not succeed in getting loan from any of the banks. Despite these hurdles, we are trying hard to make our CSCs successful.
We are strongly of the view that the government should be facilitative and proactive in supporting SCAs to implement the CSCs. We have not received the required support in the early phase. They left everything to us. It was their argument, “you know the problem and knowingly made an agreement and hence it is your liability and responsibility to implement it”. Such a stance from government created many problems for us. However, we could see a new dispensation with evidence of more facilitation and support from government in recent times. If we could have had similar support from the Government to facilitate banks to lend loan to set up CSCs and linked up CSCs with various other government programmes, we could have overcome the initial teething problems. Similarly, with support for providing electricity, Internet facilities and roll out of e-Nagarik Seva (issuance of various certifi cates) and making the citizenship grievance redressal system functional at the district level in the beginning phase, the progress could have been faster.
How do you think the viability and success of the CSCs can be insured?
Recently, we got success in getting helping hand from Garwah Deputy Commissioner (DC). For instance, during Parliament election, Garwah district DC engaged all our Village Level Entrepreneurs (VLEs) as election micro observers, photographers and videographers. This is a bold decision from the head of a district. The result proved success. The head of the district appreciated the VLEs role and contribution. After tasting success, Garwah district organised e-prepared events such as workshops and frequent meetings with the Block Development Offi cers and various line departments in the district. Garwah District administration also entrusted the data entry and digitisation works to us.
The DC is a champion for CSC and introducing e-governance in this backward region. These positive and supportive actions infused greater confi dence among the VLEs.
The opening up of CSCs in rural areas have raised some hopes for fi nancial inclusion and the availability of micro credits to farmers and the poor residing in the countryside. What is your assessment on this?
With regard to hopes for fi nancial inclusion and availability of micro credits to farmers and poor, we experienced mixed responses. From the government point of view, we got encouraging response and they want branchless banking or IT kiosk banking to become a reality. In the context of National Rural Employment Guarantee Scheme (NREGS), the banks are not able to serve large number of small ticket NREGS wage seekers. Hence, government wants banks to immediately respond to the needs of NREGS wage earners. However, the banks have insuffi cient staff to provide these services.
On the other hand, our effort in the past two years have resulted in us becoming a Business Facilitator (BF) to provide noncash services to one Nationalised bank and they recommended us for Business Correspondent (BC) services for extending banking services to the unbanked masses. In the case of another leading big bank, though we have been trying for two years to extend banking services to rural masses using the e-governance kiosk banking services, we could not get positive responses. The fi nancial inclusion is still an agenda on the top and the rural bank branches are not interested to deliver the banking services at the doors of the masses, though Reserve Bank of India made BF and BC services to provide banking to every citizen. Further, the rural bank branches in Jharkhand are yet to be computerised and are not prepared for branchless banking.
What are the other challenges you faced while setting up and operationalising CSCs?
Challenges are many. Firstly, high operational costs of running CSCs due to lack of electricity and high investment costs in the form of solar panels and generators, is one of the challenge faced by us from day one. Lack of readily available accommodation to house CSCs, poor quality of Panchayat Bhavans and lack of security for CSCs in Panchayat Bhavans, was another issue we confronted. Thirdly, some departments are still living in ivory tower and are not coming forward to delegate their services down the line. For instance, though we have made an agreement with Department of Postal Services, due to the existing bureaucratic system within DOT, providing postal services have not materialised through the CSC. Yet another challenge we came across is the insensitive and intrusive nature of banks in supporting VLEs with loan support. Also, being a “disturbed district”, the rebel outfi ts blasted few cell phone towers which caused problems in getting network.
Don’t you see backwardness in rural areas as a hurdle in the way of greater acceptance of electronic service delivery in general and CSCs in particular? What is your roadmap for tackling this issues?
With regard to the purchasing power of the rural masses, we do not see it as a big barrier. CSC works on the basic premises of aggregating the services. If the volume is more, there is greater likelihood that the CSC will thrive on similar micro credit story in the world. Our experience has shown that rural masses want more government services through the CSC and are willing to pay. As long as such services are assured, we see greater business potentials for CSCs. As far as the roadmap is concerned, fi rst and foremost requirement is that CSC and its services should be mainstreamed within the government line departments. An interministry and inter-departmental plan of action can be evolved to deliver part of the services through the CSCs. For instance, government can deliver tele-health and tele-education service through the CSCs. Through these centres, government can also roll out fi nancial inclusion schemes and part of the postal services. Massive campaign similar to Sarva Shiksha Abhiyan and National Rural Health Mission is required. The present pace of rural broadband services through government telecom companies is slow. We need to speed up the roll-out of rural broadband services on war footing.