|
|
C.P.Chandrashekhar
|
ICTs, when used in a participatory, collaborative and locally relevant manner, can play a significant role in improving livelihoods and alleviating poverty.
An overview
The persistence of widespread poverty and hunger are among the principal disappointments with the post-Independence development experience in India. As a result, more than five decades later, when the government claims that a change in regime that affords a larger role for markets and a smaller role for the State in development would place India on a new growth trajectory, the importance of public action to deal with poverty and vulnerability has only increased. Even official estimates, widely regarded as overly optimistic, estimate the number of poor in India at 260 million.
As has been repeatedly stated, the country being predominantly rural and agriculture still being the principal source of livelihood of a majority of the population; alleviating poverty requires special attention to rural livelihoods. Even though agricultures share in Gross Domestic Product (GDP) has fallen from 38.1 per cent in 1980 to 31 per cent in 1990 and 24.7 per cent in 2001, 72 per cent of the population resides in rural India and agriculture accounted for 57 per cent of total employment in 1999-2000.
A trend analysis of GDP growth prior to and after the reforms points to a deceleration in the GDP growth in agriculture from 3.1 per cent (1981-82 to 1990-91) to 2.5 per cent (1992-93 to 2002-03). Even to the extent that growth did occur during the 1990s, the available evidence suggests that the impact of this growth on employment was limited. National Sample Survey (NSS) estimates indicate that the average annual rate of growth of aggregate rural employment growth stood at just 0.58 per cent over the period 1993-94 and 1999-2000. This is the lowest such rate of increase observed since the NSS first began reporting employment data in the 1950s.
The decline in the overall rate of growth of employment was largely due to the stagnation of employment in agriculture, that earlier had been a major source of incremental employment. With a substantial part of employment in the unorganised sector being reflective either of a process of agricultural involution or of a distress-driven spill-over into low-paid, casual and insecure employment, it appears that the ability of the current process of growth to adequately impact on poverty and deprivation is indeed limited.
Role for ICT
The question that concerns us here is whether and in what ways can ICT contribute to the task of improving livelihoods and alleviating poverty. There are obviously many routes through which this could occur. ICTs direct contribution to poverty reduction can come either through the employment generating effects of ICT diffusion into poor rural and urban areas or through its effects on enhancing returns from economic activities undertaken by poorer households. Its indirect contribution can come through facilitating and reducing the costs of delivery of services that either promote wage and self employment or help overcome structural constraints to the realisation of the poverty alleviation effects of particular projects; and through improving the quality of delivery of employment generating and poverty alleviating projects being implemented by the government.
Agricultural Development
Agriculture is also being transformed by ICTs. Increasingly, ICTs spur the development of innovative programmes and research in the agricultural sector. Farmers worldwide are using ICTs to obtain market information, to bypass intermediaries and to obtain better prices for their products. Timely access to market information via communication networks also helps farmers make judicious decisions about what crops to plant and where to sell their produce and buy inputs.
Additionally, ICTs empower farmers, rationalise supply chains and improve productivity. ICTs also facilitate research and development, and information sharing on agricultural farm extension technologies and approaches (such as the development of effective seed technologies), particularly those that can work to enhance food security and subsistence. ICTs can also assist in provision of information that warns fisherfolk of storms at sea or facilitates the prevention or treatment of crop or animal disease.
Micro-entrepreneurship
There are, indeed, reasons to believe that by facilitating decentralized and (entrepreneur-wise) distributed or diffused growth, the technology can bundle income increases with reduced inequality that can have poverty alleviating consequences. The effort to use ICT in poverty alleviation must thus focus on the new opportunities for micro- entrepreneurship that information technology offers.
In India, thus far the experience with microentrepreneurship has been restricted to the lower end of the technology, principally cable and pay phone operators. But even here, success has been greater in urban rather than rural areas, because the higher costs of diffusing the technology to remote rural locations. According to the World Bank (2002): In urban India, a telephone connection costs $650 for phone booth operators, and operators must earn $190 a year to break even. Telephones are more expensive in rural areas: a line can cost $1,5001,700, so operators must earn $425 a year to break even.
Thus developments in two directions are necessary if information and communication technologies are to contribute to employment increases. First, the costs of investing in the technology by micro-entrepreneurs need to come down substantially. Second, the opportunities for self-employment through such entrepreneurship should arise in other areas of information and communications technology.
Needless to say, efforts at reducing costs of hardware and connectivity in order to hasten diffusion and increase access are a frontline activity in the ICT for development area. If costs of diffusion are reduced there is a strong possibility of an increase in opportunities for wage employment and micro-entrepreneurship in new areas opened up by the technology. An example of such opportunities is offered by the model computer project Gyandoot in the state of Madhya Pradesh, which is revenue generating. However, it has been noted that few of these kiosks located at points that ensure easy access have achieved commercial viability, even though the sunk cost of collating and digitising the information that sustains the project are subsidised by the government. What is encouraging though is that the scheme is not just a free service financed by the state, but provides a source of self-employment or means of micro-entrepreneurship.
Reducing economic vulnerability
The second direct contribution to poverty alleviation that ICT can make is by helping raise the magnitude and reduce the vulnerability of returns earned by small producers from their economic activities. Though structural constraints like indebtedness can work to neutralise benefits; access to information that helps obtain better prices for their produce, identifies the location of fish shoals, warns fisherfolk of storms at sea and facilitates the prevention or treatment of crop or animal disease are all examples where such benefits can be delivered by technology.
A typical example of use of ICT for human development is offered by the Information Village experiment being conducted by the M.S. Swaminathan Research Foundation (MSSRF) in ten villages in Pondicherry. The experiment seeks to electronically deliver knowledge that can prove productive and improve earnings. Knowledge from external sources is selectively compiled and reformulated so that it can be integrated with local knowledge.
According to MSSRF personnel, information provided in the village knowledge centres is locale specific and relates to prices of agricultural inputs (such as seeds, fertilisers, pesticides) and outputs (rice, vegetables), market (potential for export), entitlement (the multitude of schemes of the central and state governments, banks), health care (availability of doctors and paramedics in nearby hospitals, womens diseases), cattle diseases, transport (road conditions, cancellation of bus trips), weather (appropriate time for sowing, areas of abundant fish catch, wave heights in the sea), etc. (Senthilkumaran 2002). A unique feature is that the centres are operated by local volunteers and that most information is collected and fed in by the local community itself.
Reorganising economic activity
The direct effects of ICT on rural livelihoods can also come through a reorganisation of economic activities that helps producers increase their returns. A striking case of such effects is the introduction of ICT devices into the management of operations of the National Dairy Development Board in Gujarat (Bhatnagar 2000). The major advances made by the cooperativisation of milk production and processing at Amul Dairy in Gujarat have been widely recognised. Village level primary producers are organised under a supervisor from the district level Cooperative Dairy Union which owns a processing plant. Milk is sold only to the cooperative at local collection centres. ICT is being used to improve collection and payment, substantially improving the prices received by farmers. Earlier, the quality and quantity of the milk was computed through manual calculations made by the cooperative staff. This not merely led to allegations of underpayment, but resulted in substantial delays. The fat content in the milk supplied by the primary producers was calculated in a few hours after the milk was received and farmers were paid every 10 days or so. With the introduction of ICT, each producer is provided with a card that is read electronically at the collection centre and his ID sent to a Personal Computer (PC). Milk is poured into a steel container on a weighbridge that displays the weight and transmits the information to a PC. An operator takes a small sample of the milk and a fat testing machine reads the fat content electronically in three seconds. With this information being displayed and transferred to the PC as well, the computer calculates the payment due to the producer and provides him with a payment slip using which he/she can immediately collect his/her payment. The milk vending system costs around $2,000 per centre. Two private manufacturers currently produce the equipment. Nearly 600 such systems are in operation in the Kheda district in Gujarat. There are 70,000 village societies in India, of which 2,500 have been computerised. Once this facility is put in place the opportunities offered by computerisation could be exploited and the benefits further extended. Using the Dairy Information System Kiosk (DISK) software developed by the Indian Institute of Management Ahmedabad, which connects to a dairy information portal, it is now possible to maintain and access a computerised database that includes all details of the cattle owned by the cooperatives members, historical information on milk production, information on the prices and availability of a range of commodities needed by cooperative members and information on best breeding practices. In addition, the system can be used to deliver services such as inoculation alerts that can be printed onto the payment slip. The benefits that this transparent and efficient system delivers in terms of improved productivity and earnings should be obvious. Its effects on poverty are also an obvious corollary.
| Smart
Cards: Technology for the poorest |
Located
in Medak District in Andhra Pradesh in India, SKS is a
microfinance project catering to the needs of landless labourers and
marginal farmers in this drought-prone area with a high incidence of
poverty. The loans have reportedly been used primarily for land and
livestock related enterprises, and activities such as vegetable vending
and running tea-shops. SKS maintains that the loans have made a
tremendous impact on member lives, raising their incomes, reducing
seasonal out migration and preventing bondage of children as child
labourers.
Two years into its operation, SKS was confronted with two major
obstacles relating to issues of financial sustainability in terms of
the high cost of delivery of credit, because of the substantial time
spent for staff-client interface, paperwork, discussing loan terms and
conditions etc.; and
low interest earning per client, as the loans to the poorest were
extremely small.
The opportunity for cost reduction lay in reducing the time spent.
Smart cards, it appeared, could be used to reorganise work by directly
downloading information from the branch office computer into hand held
computers available with the SHGs. Technology also makes it possible to
update all transactions and accounts for each member both in the smart
card and in the computer. It also allows for offline checking of
accounts by individuals , services that are commonly offered by the
automated teller machine or ATMs as is commonly known, (Microfinance
Gateway, 1999). SKS has calculated that even with the additional costs
of the cards and the terminals each branch will save about $2,000 per
year in costs, reducing costs by a fifth. In addition the
computerisation of all financial records will minimise errors and will
provide management with immediate client level information.
If the expectations regarding cost reduction are realised, this
introduction of IT could render the SKS project financially sustainable
and consolidate and expand an activity that can make a substantial
difference to poverty by making credit available to the poorest. |
Indirect effects of ICT use
Besides the direct contribution that ICTs can make to empower livelihoods, its can contribute indirectly in two ways: (i) by facilitating and reducing the costs of delivery of services that either promote wage and self employment or help overcome structural constraints to the realisation of poverty alleviation effects of particular projects; and (ii) improving the quality of delivery of employment generating and livelihood improving projects being implemented by the government by smoothing the process of delivery and by improving the monitoring of both the delivery and effects of the project through e-governance.
It is widely accepted that access to credit is crucial to improving rural livelihoods. Microfinance ventures organised through Self Help Groups is a useful complement to state provided credit, especially in a large country like India. The problem, however, is that microfinance ventures, even when successful from the point of view of reaching credit to the poor and ensuring high recovery rates, are characterised by high transaction costs and therefore extremely high interest rates. An example of the use of ICT to realise the first of these indirect benefits from the point of view of poverty alleviation is the Swayam Krishi Sangam (SKS) smart cards project (Microfinance Gateway ,1999). The project is an attempt at using ICT for reducing transactions costs the cost of credit provided by SHGs.
Conclusions
There are a few over-arching lessons that are being derived from these experiments with using ICTs for poverty alleviation. To start with, projects that are likely to impact directly on the extent of poverty are those that directly or indirectly increase employment and enhance the returns from different economic activities. But, to be successful, it appears that ICT applications should be developed by or in collaboration with local staff, since they are more likely to suit local conditions and prove sustainable. Outside control and top-down approaches, by contrast, often waste resources. Some state-sponsored e-governance programmes have been inadequately successful because centralised planning did not take into account local conditions. Further, illiteracy and knowledge of local languages only are, as expected, major obstacles to the use of information and communication technology. To be relevant, applications must be available in local languages and, to the extent possible, be visually oriented and use voice interfaces. Finally, content provided through information and communication technology should not be limited to knowledge from outside sources, but extended to draw on knowledge from the local community, especially the poor.
References
Bhatnagar, Subhash (2000), Empowering dairy farmers through a dairy information and services kiosk available at URL: http://www1.worldbank.org/publicsector/egov/diskcs.htm
Dugger, Celia W. (2000), Connecting Rural India to the World, The New York Times, Sunday, May 28.
Microfinance Gateway (1999). Swayam Krishi Sangam (SKS): Smart Cards to Sustainably Serve the Poorest, Consultative Group to Assist the Poorest: Washington, D.C. Available at URL: http://www.cgap.org/assets/images/SKS.
Sen, Abhijit (2002), Poverty Estimates, in Delhi Science Forum, The Indian Economy 2001-02: An Alternative Survey, Hyderabad: Prajasakti Book House.
Senthilkumaran, S. (2002), Rural Knowledge Centres ICT for Poverty Eradication, available at URL: http://www.iicd.org/base/show_story?id=4940&cat=x
Venugopal, K. (2000), Computers in Farm Land, Business Line, Chennai, 22 February.
World Bank (2002), Using information and communications technology to reduce poverty in rural India, in Prem Notes, Number 70, June.
Author: C. P. Chandrashekhar is a Professor of Economics at the Centre of Economic Studies and Planning, School of Social Sciences at the Jawaharlal Nehru University.
|
