New Delhi: Four years since its inception, the common service centres (CSCs) project, which aims to provide a single window of access for government and private services in villages, is struggling to become viable.
The project, by the department of information technology (IT), was started in 2006 with the objective of setting up a network of 100,000 computer-enabled kiosks by 2008.
It’s two years since that deadline ended, but only 77,000 kiosks are now operational.
Meanwhile, the IT department has been handed a fresh mandate to expand the number of kiosks to 250,000 and convert them to Bharat Nirman Rajiv Gandhi Sewa Kendras, or village knowledge resource centres.
Some of the services that CSCs aim to provide include issuance of birth and death certificates, property and vehicle registrations, and online payment of taxes, as well as private services such as banking and telecom.
The project also aims to partner with key development schemes such as the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), Sarva Shiksha Abhiyan, and National Rural Health Mission (NRHM), among others.
Most of the proposed services to be offered online are yet to be digitized, and private companies have not shown much interest in tapping CSC to take their products to the villages.
As a result, around 17,500 centres have been shut and their owners, including 3i Infotech Ltd and Comat Technologies Pvt. Ltd have pulled out.
The special purpose vehicle (SPV) floated to make the project viable and reduce the disparity in services offered in different centres, too, has failed to attract investments from private companies.
So far, only public sector lenders—Punjab National Bank, Andhra Bank, Bank of Baroda, United Bank of India, Central Bank of India, Bank of India and State Bank of Mysore—have agreed to invest in the SPV, named CSC e-Governance Services India Ltd, said an official in the department of IT, asking not to be named.
The Reserve Bank of India (RBI) recently allowed CSCs to act as banking correspondents, enabling them to offer small loans and collect small value deposits or interest, apart from selling microinsurance and mutual fund products.
“With the recent RBI mandate, the CSCs are a very good medium for companies to tap into the rural consumers—a majority of whom are unbanked—as companies will be able to sell their products in these areas (villages) without spending a lot in getting the infrastructure in place,” said a consultant who works closely on e-governance projects.
The CSC model has had several teething troubles, because of which private banks and companies have adopted a wait-and-watch strategy, he said, asking not to be named.
Among CSC owners, only Jammu and Kashmir Bank, the All India Society for Electronics and Computer Technology (AISECT), SREI Infrastructure Finance Ltd, microfinance firm Basix and the Network for Information and Computer Technology (NICT) have invested in the SPV so far. Firms such as Reliance Communications Ltd and Spanco Ltd have kept away.
“We expect to finalize the shareholding pattern within a month’s time,” said the IT department official mentioned earlier.
According to the initial framework, an equal 44.5% stake was to be held by state governments and private owners of CSCs, with the balance 11% to be held by financial institutions. The SPV would derive revenue from fixed margins on each service rolled out through the centres.
The department is now working on how to monetize the services around programmes such as MGNREGA and NRHM, which would also guarantee a fixed income to owners of the centres, the official added.