Que.

Government of India initiated ICT project for improving quality of life and means of
livelihood. Reading a concept note highlight why ICT should be focused upon? ITC e-choupal
was launched with this objective in mind critically evaluated whether e-choupal is a successful
initiative or failed one? Highlight whatever points you are emphasize on.
Ans.
ICT is not just about technology its about the ways in which information and technology are
used to deliver better services and enhance trust and confidence in government.
In the present globalised and decentralised world, India cannot afford to keep its economy closed
and secluded. Thus, an interaction between Indian economy and worlds economy is inevitable.
That is not a big problem. The real problem is to make Indian economy an efficient and
competitive economy. Though there are many indicators for measuring the strengths and
weaknesses of an economy, but the ICT strategy of a nation is very crucial to put it on a global
map. It is very important that the ICT strategy and policies of a nation must not only be suitable
but should also believe in a holistic application and implementation. The ICT strategy and
policy of a nation cannot afford to keep the different components of ICT separate. Their
amalgamation and supplementation must be done at a priority basis otherwise the ICT strategy
and policy will not bring the desired results. The present ICT strategy and policies of India are
deficient and defective.
This is so because most of the components required to make it a transparent, accountable and
suitable strategy or policy are missing. The major among them are:
(a) Non-use of Public Private Partnerships (PPPs)
(b) Absence of use of collective expertise
(c) Lack of gender sensitive policy
(d) Lack of security and technological safeguards
(e) Lack of a techno-legal base in India
(f) Absence of ICT use for justice administration
access to online transactional services, which makes life simpler and more convenient for
citizens and businesses; and channels to collaborate and share information with citizens and
business, which in turn enable the innovation of new online tools and services.
Delivering this plan requires a new operating model that provides system-wide coordination of
investment, resources and capabilities, and develops business leaders across the system that can
harness the full potential of technology and leverage information assets for transformative gains.
This will not be a fully centralised model, but rather one that increases capability sharing.
Achieving this in the required timeframe will require streamlined decision making processes and
clearly understood decision rights. State Services agencies will be expected to align their plans
with the Strategy and Action Plan.

Objectives
The Strategy and Action Plan seeks to:

Create effective and efficient integrated service delivery models;

Realise new value from government information assets;

Optimise the use of scarce resources and capabilities;

Strengthen assurance systems to manage risk and quality;

Deliver a migration path for aging legacy systems;

Leverage scale and efficiencies;

Partner with the private sector and non-governmental organisations; and

Increase the pace of change.

The strategy is focused on driving real change. It sets out how government ICT will enable the
delivery of public services in very different ways to the past. The Government is taking a
different approach to deliver this strategy, characterized by a strong center and continued
commitment to greater transparency through regular and open reporting. . The approach
includes:
Mandatory open standards;
Spending controls to ensure that new ICT solutions comply with strategy objectives;
Transparency to ensure the continued comparison of common ICT services so that government
gets the best price;
Increased standardisation and modularisation of business processes and supporting technologies
to create a platform from which government can deliver new models of open and innovative
public services;
A new, strengthened governance structure; and
Greater engagement with departments and suppliers to remove cultural as well as technical
barriers.

Role of ICT in development of rural areas

Social benefits
African culture is all about being together rather than progressing as an individual. Therefore the
main purpose of ICT in rural Africa should be a tool of being/getting together. This can either be
explained in ways of social networks such as Facebook and Twitter for one on one or group
communication, or using the Internet as an addition to current group activities. For example,

wedding invitations can be sent easily to distant relatives. ICT can still be presented as a way of
gathering information, for educational purposes or community purposes. More on this later.

Community development
As community is the central way of life in rural Africa, people should strive to community
development rather than individual development. This is a difficult concept for western people,
because we do not have such tight communities. A development should be beneficial for the
whole community, such as sanitation or clean drinking water rather than a bigger house or a
faster car. ICT can support these developments in ways of education and providing (access to)
resources that can be used for community activities such as building a borehole or setting up an
agricultural branch in sunflower farming. Besides these benefits, integration of ICT in rural areas
provides many jobs and opportunities. In the local village of Macha, Zambia,an ICT project has
provided over 65 new jobs, trained 10 IT-specialists and trained more than 200 people in
computer literacy. The wireless network provides connectivity to approximately 300 community
workers and visitors living around a mission hospital and medical research institute.

Education
In many ways ICT can be beneficial in the educational branch. Teachers can have access to more
educational programs and can compare these among each other to strive to the best education
possible. Students have an unlimited supply of knowledge and data that they can use for
research.

Small/medium enterprise development

Rural economies are disadvantaged by consisting mostly of small or medium sized enterprises,
which find it very difficult to compete with global enterprises which control the market. With
access to the Internet, local farmers and government farms can get real-time access to market
data, prices and potential buyers. This makes it easier to sell surplus stock and get under the
global prices for easy competition.

Media networks
ICT supports media networks in ways of easy information sharing. Radio- or videos treams,
connecting the local people with everybody across the globe, can broadcast major events,
happenings and global newsflashes. One big community can becreated

ICTs in Rural Development: Advantages & Disadvantages

Advantages of ICTs in Rural Development

Provides market access

Improves healthcare

Improves education
Facilitates rural empowerment and participation
Improves governance

Disadvantages of ICTs in Rural Development

Web companies may not want to provide services to non-profitable rural areas
Technologies such as bandwidth are expensive in rural areas
ICT projects are difficult to plan
Sustainability of an ICT projcet is difficult to maintain
Some claim ICTs benefit the rich while and does not benefit the poor

ITC e-Chopal
e-Choupal is an initiative of ITC Limited "Imperial Tobacco Company", a conglomerate in India,
to link directly with rural farmers via the Internet for procurement of agricultural and aquaculture
products like soybeans, wheat, coffee, and prawns. e-Choupal tackles the challenges posed by
Indian agriculture, characterized by fragmented farms, weak infrastructure and the involvement
of intermediaries. The programmE installs computers with Internet access in rural areas of India
to offer farmers up-to-date marketing and agricultural information.
The e-Choupal project scored high in all the four categories under consideration: innovative idea,
technologically challenging project, delivering social benefits and bringing business benefits. No
wonder then that the jury was unanimous in its opinion that the project is the best IT
implementation project in the country.
There are 6,500 eChoupals today. ITC Limited plans to scale up to 20,000 eChoupals by 2012
covering 100,000 villages in 15 states, servicing 15 million farmers.

Effects of e-Choupal:

ITC Limited has provided computers and Internet access in rural areas across several
agricultural regions of the country, where the farmers can directly negotiate the sale of
their produce with ITC Limited. Online access enables farmers to obtain information on
mandi prices, and good farming practices, and to place orders for agricultural inputs like
seeds and fertilizers. This helps farmers improve the quality of their products, and helps
in obtaining a better price.
Each ITC Limited kiosk having Internet access is run by a sanchalak a trained farmer.
The computer is housed in the sanchalak's house and is linked to the Internet via phone
lines or by a VSAT connection. Each installation serves an average of 600 farmers in the
surrounding ten villages within about a 5 km radius. The sanchalak bears some operating
cost but in return earns a service fee for the e-transactions done through his e-Choupal.
The warehouse hub is managed by the same traditional middle-men, now called

samyojaks, but with no exploitative power due to the reorganisation. These middlemen
make up for the lack of infrastructure and fulfill critical jobs like cash disbursement,
quantity aggregation and transportation.
Since the introduction of e-Choupal services, farmers have seen a rise in their income
levels because of a rise in yields, improvement in quality of output, and a fall in
transaction costs. Even small farmers have gained from the initiative. Farmers can get
real-time information despite their physical distance from the mandis. The system saves
procurement costs for ITC Limited. The farmers do not pay for the information and
knowledge they get from e-Choupals; the principle is to inform, empower and compete.
e-market place for spot transactions and support services to futures exchange
There are 6,500 e-Choupals in operation in 40,000 villages in 10 states, affecting around
4 million farmers. ITC plans to scale up to 20,000 e-Choupals by 2012 covering 100,000
villages in 15 states, servicing 15 million farmers.

Benefits of e-choupal
The e-Choupal system gives farmers more control over their choices a higher profit margin
on their crops and access to information that improves their productivity. By providing a
more transparent process and empowering local people as key nodes in the system. ITC
increases trust and fairness. The increase efficiencies and potential for improving crop
quality contributing to making Indian agriculture more competitive. Despite difficulties from
undependable phone and electric power infrastructure and sometimes limited hours of use,
the system also links farmers and their families to the world. Some sanchalaks track future
prices on the Chicago Boards of Trade as well as local mandi prices for advising the farmers
about current trends in market. Village children have used the computers for school work,

games and to obtain and print of their academic test results. The result is a significant step
towards rural development.

Principle of the e-choupal

The principle of the e-Choupal is to inform, empower and complete. At the same time ITC has
also extracted value in four steps to make the model sustainable and scaleable:
1] Elimination of non-value added activities.
2] Differentiated product through identity preserved supply chains.
3] Value added products traceable to farm, practices.
4] e-market place for spot transactions and support services to future exchange.

Advantages of e-choupal

e-Choupal has the advantages of their own market facilities for purchasing the
farmers produce. Geographical distances do not restrict participation in the eChoupal.
The main disadvantage of conventional market is that information asymmetry is
inherent in the market whereas e-Choupal provides for transparent transactions. This
enables the participation of smaller as well as large farmers. Elimination of some

layers of intermediaries allows for large share of profits to reach the lower end of
value chain.
The main attractiveness of e-Choupal is that it can be used for connecting large
producers/ small producers and small users/large users thereby eliminating the need
for hierarchy of brokers/ middleman. Internet is used as a low transaction cost
backbone for communication. Indian market has inadequate physical, social and
institutional infrastructure that is substituted by intermediaries and they also value to
the chain ion every step.

Problems before e-choupal was introduced:

Traditionally, these commodities were procured in mandis (major agricultural marketing
centers in rural areas of India), where the middleman used to make most of the profit. These
middlemen used unscientific and sometimes outright unfair means to judge the quality of the
product to set the price. Difference in price for good quality and inferior quality was less, and
hence there was no incentive for the farmers to invest and produce good quality output. With
e-Choupal, the farmers have a choice and the exploitative power of the middleman is
neutralised.
ICT platform that facilitates flow of information and knowledge, and supports market
transactions on line.

It transmits Information (weather, prices, news),

It transfers Knowledge (farm management, risk management)
It facilitates sales of Farm Inputs (screened for quality) and
It offers the choice of an alternative Output-marketing channel (convenience, lower
transaction costs) to the farmer right at his doorstep
It is an interlocking network of partnerships (ITC + Met Dept + Universities + Input
COs + Sanyojaks, the erstwhile Commission Agents) bringing the best-inclass in
information, knowledge and inputs.

Critical success factors

The e-Choupal experience highlights that ICT platforms can provide rural connectivity and ecommerce support. These platforms have enormous potential provided they are conceptualized
for the specific needs of the community and business. Some of the elements that helped the eChoupal to work successfully are discussed below:

Comprehensive knowledge of rural markets:

Rural markets are both economic and social networks and there is a strong connection
between the operation of social and economic transactions. Understanding the operations is
vital before the systems are conceptualized. Use of local population, as much as possible
helped the network to get the acceptance closely.
Designing a Win-Win transaction model:
The success of e-Choupal comes from the condition in which both the farmer and the
processor share the benefits coming out of the elimination of middle men and hence due to
timely information availability.
Leveraging the logistics channels:
The existing logistics of the rural markets are leveraged but they are not able to exploit the
information asymmetry (unlike that in a conventional market). In that sense e-choupal uses
the local institutions but eliminates the information asymmetry that they used previously.
Selection of Sanchalak:
Both the selection of Sanchalak and the acceptance of Sanchalak by the community are very
critical for the success of e-Choupal. ITC used a trial and error method for developing the
procedure for selecting Sanchalaks. In the platform terminology Sanchalak is the interface
for maintaining the platform. For the farmer the Sanchalak is the e-Choupal. Training and
sensitizing him for the crucial role has been the main reason for the acceptance of the
Sanchalak by the farmers. Sanchalak, thus, acts as the coordinator of the knowledge
community, and a representative of farming community.
Bottom-up model for entrepreneurship:
e-Choupal encourages enormous amount of creativity at the local level along with local
entrepreneurship stimulation. The farmer and Sanchalak are free to use the e-choupal and
develop new uses. e-Choupal unleashes the creative spirit in the rural India.