CSCs have been connected to BharatNet/NOFN to provide high-quality and cost-effective video, voice and data content and services, in areas of e-governance, education, health, telemedicine, entertainment and private services.
Common Service Centres (CSC) were established in 2006 as a part of the government’s initiative to introduce e-governance on a massive scale. These are internet-enabled access points for delivery of digital services to citizens. CSCs have been connected to BharatNet/NOFN to provide high-quality and cost-effective video, voice and data content and services, in areas of e-governance, education, health, telemedicine, entertainment and private services.
CSCs act as service delivery centres for government to citizen, business to consumer, utility services, etc; permanent enrolment centres for Aadhaar, and Aadhaar Printing Centres; business correspondent agents under financial inclusion, banking services under Jan-Dhan Yojana; insurance service centres; educational and skill development centres; electoral registration centres; and Wi-Fi distribution centres. Key stakeholders of CSCs are village-level entrepreneurs (VLEs)—the last-mile CSC service providers.
VLEs are responsible for self-sustenance of outlets, with commission from transactions being a key source of income. A network of 2.7 lakh VLEs, of which 1.63 lakh are in gram panchayats, has been established. The government has decided to expand the network of CSCs to 2.5 lakh gram panchayats by the year-end. The government, thus, seems dependent on the CSC network to carry most of its initiatives under Digital India, including the recently launched Digital Village programme.
By emphasising on entrepreneurship aspect, the policy has addressed the ownership problem that generally befalls public services. But many VLEs are struggling to scale the wall of financial viability. The May 2018 newsletter by CSC e-Governance Services India shows that, for FY18, 2.64 lakh CSCs transacted online, of which 26,571 VLEs had a transaction value of above Rs 1 lakh. The most important source of revenue envisaged for VLEs is commissions from online transactions.
If one assumes a generous commission of 20% and transmission with no leakages, this implies 90% VLEs could not even earn Rs 20,000 from commissions for whole year. Self-sustenance has led VLEs to give emphasis on the urgent and remunerative kind of services for which they may impose an additional charge on the customer. For example, in October 2016, six services accounted for 89% of total service requests (MeitY Annual Report). Aadhaar printing and e-recharge had the highest and second highest transactions, respectively.
Aadhaar printing and Aadhaar update together accounted for 34% transactions, which will taper off once all have an Aadhaar. This tells us that people are accessing VLEs to get documents that will enable them fulfil government mandates. It also implies lack of focus and lack of demand, for more important educational and skill-building services available at VLEs, hinting at underutilisation of the fibre optic network.
Previous studies have highlighted the importance of service centre agencies—who operate, manage and build the VLE network and business—in making VLEs financially viable, as well as lack of reliable power supply so that last-mile CSCs can remain open for longer hours. Just like it did for Aadhaar, the government needs to think of policies that will lead to supply push or demand pull for other services available at VLEs, such that it generates enough commission for VLEs to remain invested in Digital India.
This is critical for the success of Digital Village. In the pilot currently on, six villages have been equipped with solar lighting facilities in community centres, LED assembly unit, and Wi-Fi choupal. Digital Village can do well only when these assets on the field are taken care of by stakeholders. Research by the author on similar facilities at gram panchayat level for utilisation of EduSat (educational satellite launched by ISRO in 2004) shows that proper care of assets by stakeholders is not a given, unless there is a sense of ownership of the assets among the community.
It is here that financial viability of VLEs becomes important. Successful or financially-viable VLEs will naturally be inclined or incentivised towards taking ownership of the assets provided under Digital Village, and thus are our best hope for an effective Digital Village.
By: Chidambaran G Iyer
Senior Fellow, Pahle India Foundation