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Rural Development 57(12), Archana G. Gulati (2009).

This article explores how ICT might promote rural empowerment in India.

ICT has played an important role in the rising welfare and living standards of Indians.  Indian farmers use mobile technology to get commodity spot prices.  Kerala fishermen call ahead to find where they might fetch the highest price for their catch before coming into port.  A recent study by the International Council for Research on International Economic Relations identified mobile phones as a significant driver of the empowerment of the poor and low-skilled in India.  In particular, the study estimated that “Indian states with a 10% higher mobile penetration would enjoy an annual average growth rate that is 1.2% higher than those with lower teledensity.” 

A World Bank study estimated that economic growth rises 1.3% for every increase of 10% in high speed internet connections (2).  Overall, “Pilot studies for both mobile and broadband content have shown a healthy demand from villagers for agriculture, market and weather related information, e-marketing, teleeducation and e-health services.” (4).

However, there has been significant regional disparity in ICT coverage.  In 2009, rural teledensity totalled 15%, compared to 89% in urban areas.  Gulati notes that “Though comparatively rural teledensity has increased faster than urban teledensity over the past decade, the Indian digital divide is still vast and challenging” (1).  Mobile phones connect rural populations to market price information and weather updates.  In a 2009 speech, the President of India identified ICT as a “tool for rural empowerment” and announced a goal of achieving 40% rural teledensity over the next five years and bringing broadband service to every panchayat (village government office) within three years.  Gulati argues that beyond mobile phone service, “High speed broadband connectivity for rural areas is a vital component of inclusive growth. It can provide villagers with much needed access to financial inclusion, health and education services. Broadband connectivity can help ensure leak-proof transfer of subsidies/welfare payments and constitute a vital channel for spreading awareness and facilitating ground level feedback on government schemes, thereby enhancing their efficacy” (1).  Given this context, Gulati suggests that “What must be necessarily understood is that for ICT it to deliver its promised transformational impact on rural India both connectivity and content must be addressed. Also not to be ignored is the power supply to run ICT services and devices without which rural ICT infrastructure will be of limited utility” (2).  Overall, three elements are necessary for improved ICT provision in rural India: affordable connectivity, power, and relevant content.

Affordable rural telecommunications accessibility has been championed by the Universal Service Obligation Fund (USOF) established in 2002.  As of 2009, the Universal Service Obligation Fund supported 558,000 village public telephones, 40,690 rural community phones, 6.382 million new rural household direct exchange lines, and 183,000 improved radio services.  5,666 mobile towers have been erected under a shared infrastructure scheme and 10,000 more are planned.  The USOF’s broadband scheme aims to subsidize 900,000 connections and 28,000 broadband kiosks and to create capacity for 1.8 million rural broadband connections.  Gulati comments that USOF has been “effective” in promoting rural telecommunications connectivity.  In particular, it has promoted lower end user charges though subsidized infrastructure and low rental charges as well as innovation in rural environments through pilot project sponsorship. 

Power remains a constraint upon ICT availability in rural India.  Power is not available in all villages, and where it is available it is sometimes limited by time of day.  USOF has spearheaded an initiative to address this challenge through renewable energy projects.  Solar power installations may be included in future mobile infrastructure schemes. 

In the next decade, ICT may be important not only as a service available to rural areas, but as a source of employment.  Gulati notes that as Indian cities grow wealthier, “the tremendous potential of rural back offices is now being realized and reported” (6).  One study estimates that in the next 10 years, 2-3 million IT-BPO jobs will be created outside the seven major cities.  Better broadband connectivity and more reliable power would enable this rural job creation.  Rural BPOs have also advanced female employment and empowerment, even in conservative northern states. 

Another benefit of improved ICT provision is access to financial services.  Bank offices are present in only 5.2% of villages.  One example is Safaricom Ltd. in Kenya, which offers financial transfer services over mobile phones, which drew 6.5 million customers in two years.

Gulati concludes with several policy recommendations.  She suggests that “All Government schemes aimed at rural development must necessarily have an ICT enabled awareness and feedback component accessible to target beneficiaries. The USOF which thus far has concentrated largely on infrastructure could encourage bundling of content with the sale of mobile connections from its subsidized shared mobile infrastructure schemes. Perhaps providers of useful suites of rural content applications (relating to education, agriculture, financial services, commodity markets etc) could be empanelled by USOF and the service bundle appropriately subsidized for the rural customers. Rural broadband content also needs to be similarly encouraged. M[obile]-banking and ICT assisted extension banking are absolutely critical for rural development and must be promoted through necessary government support” (8).