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05/23/2005 1

Towards Doubling the Rural GDP in India using Information and Communications Technology

Ashok JhunjhunwalaIIT Madras, Indiaashok@tenet.res.in

How can they stand up and be counted?

How will they get access to resources, health and education?

How will they be able to compete?

How will they bridge the distance with their urban counterparts or those in the developed world?

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Rural India has700 million people

Can technologies make a significant difference in lives of such people?

Can it bring to them health & EducationCan it significantly enhance their incomes?

in 600,000+ villages(about 1000 people per village with per-capita income of 40 cents per day)

per capita GDP of $200 per year

102.1

1710

3.9 1.9 1 0.3 0.30

20

40

60

80

100

120

60 180 260 360 520 840 1300 2240

HH Income in $ per month

Num

ber o

f HH

in m

illio

ns

135 million rural households

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Can the Efforts Scale?

Creating 100 or 1K or 10K kiosks make no impact to Indian Rural Areas

To Scale one requiresTechnologySustainable business model and an Organization which thinks and acts Rural

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In India, fibre connectivity to most county towns (talukas) provided by State-owned incumbent

Fibre has capability for infinite bandwidth

85% of villages lie within 20 Km radius of talukasTypically 300 villages in 30 Km radius

300 villages

Wireless systems can connect most of these villages

Technologies are continually evolving

Costs keep going down

Bit rates keep increasing

Technology

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Will today’s wireless technology suffice?

Mobile GSM and IS-95Bit rates of 9.6 kbps : too low

2.5G Mobiles: GPRS / 3G-1X100 kbps shared connectivity in a sector

100 villages in a sector share thisA few kbps per kiosks

3G mobile may give 500 kbps per sectorStill not enough

Need 100 kbps to each village: at least 5 Mbps per sector

Mobiles are great for handheld, not for rural kiosks

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Jointly developed by the IIT Madras and Midas Communications

Provides simultaneous voice & Internet connectivity of up to 256 Kbps Always-onfor each user

In future Connectivity requirement of up to 1 Mbps to each village can be served by terrestrial wireless

OFDMA … WiMaxEarly WiMaX not cost-effective and not sufficient bit-rate

Exchange and tower in townup to 35 Km radius coverageworks at even 55ºClow power requirement (1 KW)extremely low start-up costs

Technology

To PSTN

To Internet BB-corDECT WiLL

Costs about US$ 200 per line

2 million lines deployed

• 8-10 voice channels + 64/128/256 kbps Internet satellite backhaul

• Each hub supports 16 to 20 remote sites with 2 Mbps download

• $150 corDECT + $200 backhaul cost per connection

Sparse Area Communications where there is no fibre backbone

PSTN

Internet

2.4 m antenna3.8 m antenna

15 -25 Kms with 50 connections

2 M

bps

-->

128

Kbps

-->

<-- 256 Kbps

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Business ModelUse Local Entrepreneurs to drive ICT

Entrepreneur-driven operator assisted telephone booths(STD PCOs) introduced in India in 1987

Today in urban areas:950K PCOs covering every street of smallest towngenerate 25 % of total telecom income300 million people use these PCOs

Lesson for Rural: To serve Rural people with incomesless than $ 1/day, aggregate demandand let Entrepreneurs drive it

Aid/ Grant does not scaleSuccessful Enterprises can scale to all villages

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E-kiosk in a villagen-Logue Communications: a Rural Service Provider

Gets an entrepreneur in every village to set up a kiosk

Enables setting up of the kiosk infrastructure

including multimedia PC with web camera, printer, power back-up, software, training, 6 months unlimited Internet at a cost of just US$ 1200

Partners with the Government, NGOs, private enterprises, schools, hospitals to offer various services through the kiosk

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Local entrepreneurgrade 10 graduate: need not have seen a computer

effectively communicate and network in the community

Provides telephony, Internet access and various services to the local community

Channels information needs of community to application and content providers

Needs to earn US$ 90 pm providingTelephony, stand-alone computer services and Internet services

Provides Training and Technical SupportHandles Licensing and Policy issues Provides Internet Backbone Connectivity Enables Kiosk Services through Alliance PartnersCreates Awareness

Application & Solution

Providers

Internet Backbone

ACCESS CENTRE

Local Service Partner

Markets ConnectionsProvides Onsite Support and TrainingManages Local Web & Email ServicesManages Local Content Pages

Scope:3000 sq km400-600 connections (1 in each village)

Internet Kiosk Operator

School/PHCPrivate BusinessGovernment OfficeRural NGO

Provides Internet Access to Local CommunityProvides Awareness and TrainingChannels Information needs of Community through LSP to Application & Content Providers

Financing

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Kiosk: Bouquet of ServicesEducation and Vocational Training

Learning typing, Computer education & E-learning

Photography, entertainment and moviesDTP work, Email/voice & video mail

e-GovernmentTele-medicine & Vet CareE-AgricultureCraftsIT based ServicesVoIP

Difficult to make kiosk economically viable with single service

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Education: Customised ICT Courses for Various Age Groups – in Local Language

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Remote Teaching: Tutorials

Social –Map Question

Spoken English –Word Split

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e-Health: It Started with emails

A potential epidemic of Chicken Pox in a remote village was halted by a simple email to the right peopleInstant response from the Government Doctors

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Eye Care

The Problem India has more blind (9 million) than any other countryScreening Eye camp most common method of outreach

held at best twice a year in the same place

Till recently Eye Ailments that could only be detected this way…

An Eye Camp conducted in a TN Village

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Remote Eye Care using Video-conferencing

Allowing the patient and counsellor to interact

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General Medicine followedOnline consulting with local doctors

General Practitioners, Paediatricians and Gynaecologists

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Remote Cardiac care

Remote Medical diagnostic kit (ReMeDi) consisting of BP, temperature, ECG measurement & stethoscope at just US$ 250

Video is great, but can I get temperature of

the patient…

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Digital Studio: Photography adds to kiosk income

ID cards

Passport Photographs

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e-governance: Web- Durbar - DM talks to multiple villages on video-conferencing

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Saving Crops and Agri-consultancy

AfterBefore

In a Village in Madurai, the Lady’s Finger (Okra) cropwas turning white

The problem was sent to the experts at the Department of

Rural Extension, Madurai

Agricultural College and

Research Centrewho diagnosed

it as “Yellow Mosaic disease”

Saving to farmer – $3000

Spot Prices from NCDEX

Commodity Market Price Unit

Prices are automatically refreshed 4 times a day on all our Local ServersSimilarly for Futures

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Agriculture Initiatives through kiosks

Agricultural InsuranceWith ICICI Lombard – Weather Insurance being tested

IrrigationExploring partnerships with expertise in Micro-irrigation systems and Drip Irrigation systems

Kiosks help in after-sales services Online Consultancy with experts from the National Agro Foundation on water conservancy

SeedsOnline ordering for seeds

Soil TestingNational Agro Foundation tests soil samples

The Vet is on the Net ...

• This goat had a wound near its mouth and could not eat for a week

• The advice from the doctor cured its problem in 2 days

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Agriculture

AnimalHusbandry

Agricultural Processing

Industry & Handicrafts

IT-Based Services

Trade & Commerce

Rural Micro-Enterprises are the Wealth Creators

Micro-enterprises needFinanceKnowledge, Training & Support

Quality control, packaging

Buying, Selling & LogisticsRisk Sharing

Can CommunicationsEnable these ?

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Crafts can be a bigrevenue earner

Produce made using Local Material Provided quality is maintained

and packaging is the key

Packaging Material Rural Industry

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Embroidery for life: begins training by teaching…

how to use frames …

Explorations

Practice

Lessons

TamilarasiChristinaLathaNameTraining levels

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And finallydelivery to a city based entrepreneur

Work co-ordinatedthrough a Internet kiosk

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Bag Weaving0

The Available Rural Skills - Can be directed to providing Urban Goods and Services

2 Wheeler Repair Nursing

Basket Making Masonry

Sewing Machine RepairPapad Making

Garland Weaving

Photography

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IT Based Services for Urban Areas

India has excelled in providing IT based services to the West

required computer, connectivity and skilled personnelhas earned money and respect for India

With Computer, Connectivity and hard working persons who can be trained

Can Rural enterprises provide Services to Urban Areas?CAD / CAM skillsPresentation / Power point skillsWeb Design skillsGraphic Design skills

Can they be harnessed for IT based services?

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Rural Children create computer drawings for greeting cards

All drawn on a PC

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Family Data to Enable Loans

Taking Banks to the villages

Microfinance loans too expensiveOK for trading, not for micro-enterprise

Rural low cost ATMs at kiosksWorks with PC and connectivity at kiosksUses finger print authenticationWorks with soiled notesRemote Electronic Safety lockBreakthrough pricing at $ 1200

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Dare to DreamCurrent Rural GDP in India = $ 150 Billion

For a Population = 700 million people

GDP / Person = $ 200 per year

DOUBLING per-capita Rural GDP

$ 400 per person per year

Rural Prosperity

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Rural Areas can also be a large market

With 700 million people, it can be a large internal market for goods and services

but Current incomes largely go for sustenanceFood, housing and education

Additional Income will be spent on goods & ServicesIndia can create a extra $ 150 Billion Market

A potential market for Indian as well as multinational products

Kiosks are already distributingIndian Oil: 5 kg LPG cylinders, lubricants TVS Motors: new / second hand motorcycles Tafe: tractors and spare parts Godavari fertilizers HLL consumer products

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TeNeT Groupand 1200 engineers in 14 companies incubated by TeNeT behind these effortscorDECT WiLL, ATM, ReMeDi, CK-Office, iSee, iKoN RAS, Minnow ISP, Bluebill, CygNet NMS, Novatium NetPC

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As kiosks want a second computer

Introducing NetPC (Multimedia Network PC)Connected to a Server on LAN or Broadband

Connected to a PC ServerNo virus, no back-up required

Target price: $ 60 plus monitor

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N-Logue’s Operation Today

32 districts of IndiaTN, Maharashtra, Gujarat

e-kiosks in 2400 villages80% breaking even

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To Sum Up

Internet can empower Rural IndiaEducation, Health CareLivelihood

Agriculture, micro-enterprises

Technology can impact lives provided there is a big enough vision behind it

Dreams of Doubling per-capita Rural GDP

Large number of innovative technologies and applications need to be developed catering specifically to Rural areas

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Lessons for other countries

As one starts standing up, size mattersNeighboring nations should form a confederate

to be self-reliant, develop local technologies and solve regional problemsLarge enough market to bargain for IP

Local technology and business solutions a must to leapfrog using ICT