Master thesis pdf version

1. 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

2. COMMON SERVICE CENTER (INTERNET CONNECTED
SERVICE DELIVERY KIOSK): UNLOCKING THE
POTENTIAL OF RURAL INDIA
SATYA PRAKASH PATEL

3. 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

5. 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

7. 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

8. 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

9. 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

10. 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.

11. Abstract XI

12. 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

13. XIII

15. 1
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.

16. 2
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.

17. 3
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

18. 4
(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.

19. 5
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,

20. 6
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

21. 7
· 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

22. 8
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.

23. 9
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

24. 10
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]

25. 11
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.

26. 12
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]

27. 13
‘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

28. 14
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]

29. 15
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.

30. 16
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

31. 17
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.

32. 18

33. 19
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

34. 20
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

35. 21
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

36. 22
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 · Income · Land records · Common Services
to Tax · Property registration Centers(CSC)
Citizens · Passport, · Road transport · State Wide Area
(G2C) visa and · Agriculture Network SWAN:
immigrat · Municipalities fiber
ion · Panchayats
· E-Posts · Police · All India Portal
· Employment · National Service
Exchange Delivery
· Education Gateway(NSDG)Na
· Health tional E-Governance
Gateway
· Food Distribution &
other welfare
programs

37. 23
Services Excise · Commercial Taxes · EDI- Electronic
to Company affairs Data
Business Interchange (for
(G2B) trade, E-Commerce)Custom
foreign trade
· E-Biz
· E- Procurement
Other · National · Treasuries · E-Courts
ID
· National
GIS for
planning
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.

38. 24
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

39. 25
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.

40. 26

41. 27
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.

42. 28
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 Nodal Agency at State Level Monitoring & Supervision
(SDA)
Service Centre Agency(SCA) Implementing Agency Investor and prime mover
Village Level Local Level Entrepreneur Actual Operator at CSC
Entrepreneur(VLE) 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.

45. 31
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 e-Government Services-
· Land records · Market Linkages
· Registration of vehicles · Education
· Issue of certificates · Healthcare
· Government schemes · Agricultural ,Extension etc. ,
· Employment exchange · Data collection
· Ration cards · Rural BPOs
· Electoral services · Rural banking
· Pension schemes
· Road transport
· Public grievance
· Utility/ Telephone Bills (Government
undertakings)
(B2C) services Business-to-Business services (B2B)
(i) Commercial Services- · Advertising & promotion services
· Digital photos · Marketing ,Promotions
· web surfing · Data collection services
· photocopy& DTP · Research data collect
· e-mail/chats · Data entry
· CD burning · Distribution services
· Typing& printing, · FMCG products
· games · Financial services, loans/deposits,
· forms downloads referrals, insurance etc.
· 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

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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- Name of e Government Services Number of User in
Anoopsha year 2010
har(U.P.) (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
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/pow
er of attorney/unemployment/disability
certificate) 1105
Grievances 1066
Payment of all bills 992
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.

51. 37
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

54. 40
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.