Bitter truth about CSCs

Two years behind schedule, the common service centre (CSC) project is floundering. There are few success stories and no one tells you where Rs 5,742 crore of public funds are going


Samir Sachdeva | June 30, 2010

In typically straightforward, Haryanavi style, Suraj Bhan Sharma of Khantawas village in Farrukh Nagar tehsil of Gurgaon district tells me: “Dhol to bahut pita gya the ki yahan sab kuchh paya jayega par hua kuchh bhi naheen (drums were beaten to announce tall claims about providing many services; nothing happened).”
Sharma is referring to what used to be E-Disha common service centre (CSC) set up in his village by 3i Infotech, a private company, as part of Rs 5742 crore nationwide project to bring a host of public and private services to rural areas.

“I once visited the CSC for a train enquiry, but the computer operator had no idea how to get the information. He sent me back on another occasion when I wanted to pay my electricity bill. They had also claimed that the CSC would help us get voter ID cards and driving licences, but no such service was ever made available,” adds Sharma.

The CSC had a single computer that kids sometimes used to play games; there was no photo-copying machine, no computer training, and no bill payments were accepted, says Shiv Narayan, a shop owner at Khantawas.

The empty room in Khantawas panchayat building that 3i Infotech had rented now betrays no sign of the CSC which was part of what is billed as a ‘strategic cornerstone’ of the Rs 40,000 crore National e-Governance Plan (NeGP).

At Bhang Rola, another village of Farrukh Nagar tehsil, Mamman Singh, a resident, says that the CSC operations in his village never went beyond the company renting a room in panchayat bhawan for Rs 500 a month.

Fly-by-night behaviour?
Jarnail Singh, who worked for some time as operator of now-defunct CSC in Khetiawas village in Patudi tehsil of Gurgaon district, also points out some questionable employment practices of the company.
“We were on the payrolls of Beltronic Consultancy, not 3i Infotech which was supposed to be running the CSCs. We were promised a monthly salary of Rs 3880, but were only paid Rs 3300. They subsequently cut the salary to Rs 2250 without explanation. They did not even refund our deposit of Rs 4000 when they shut shop,” he says.
(In Haryana, the minimum wage for data entry operators is Rs 140 per day or Rs 3640 per month. A worker under NAREGA is paid Rs 141 per day or Rs 4230 per month. Going by Jarnail Singh’s complaint, Rs 5742 crore CSC project of the central government has not been complying even with the minimum wages law. What does one make of government’s claim that the CSC project will provide direct employment to more than one lakh people?)

Jarnail Singh also claims that the company abandoned the CSC without paying Rs 15,000 in electricity bill and Rs 330 in monthly rent, accumulated over a year, which it owed to the village panchayat.

Damp squib
The CSC project was approved by the Union Cabinet in September 2006 with an outlay of Rs 5742 crore to be spent over a period of four years.
The project envisaged rolling out 100,000 CSCs in rural areas and 10,000 in semi-urban areas under public-private partnership (PPP) over 18 months, i.e. by March 2008. That deadline was first extended to December 2009, then to March 2010, and now stands at June 2010.
Even though the government claims that 77,338 CSCs have been rolled out in 29 states by April 2010, the ground reality is  different.
Subtract 21,000 straightaway from 77,338 because two companies, 3i Infotech and Comat Technologies, abandoned the project early this year, bringing the curtains down on 21,000 CSCs that they had between them. (Governance Now’s emails seeking comments from 3i and Comat went unanswered.)
That leaves us with only 56,338 CSCs that might be operational. That’s a roll-out success rate of only 51 per cent, just two months before the twice extended deadline.
Even the figure of 56,338 is doubtful because, according to an official of the department of information technology (DIT), only about 30,000 CSCs have so far been audited. So the government can be certain about the near-term viability or non-viability of only about 30,000 CSCs across the country. Nothing can be said about the remainder, 26,338, until they are audited.
There is no official word on what services even the audited CSCs have been providing to the local population. There is also no mention of any social audit done on the CSCs through Gram Sabhas or panchayats.

Multiple ‘experts’, no accountability
The CSCs were conceived to be e-kiosks, equipped with computers, broadband, wireless and uninterrupted power supply, which would render a range of services from the government and the private sector to the rural population.

The project has an elaborate 3-tier structure consisting of the CSC operator (officially known as village-level entrepreneur or VLE), the service centre agency (SCA) that is responsible for a group of 500-1000 CSCs, and a state-designated agency (SDA) identified by the state government.
The official CSC website ( says that a “program management agency or PMA was also appointed to assist the DIT in the project development phase”.
Moreover, IL&FS has been appointed as the “national-level service agency (NLSA)”, whose job is to “coordinate” the project across India on behalf of the government.
The government also set up CSC e-Governance Services India Ltd, a “special purpose vehicle (SPV)” for “management of the project”.  
Full of meaningless gobbledygook, the website describes two of the key roles and responsibilities of the SPV as “laying down operating and financial disciplines within the CSC system” and “building a common identity between all stakeholders to the citizens as well as lenders”.  (That’s an amazing use of the English language. We wish we could make some sense of it!)
None of the impressive array of “expert” agencies involved in the project is ready even to acknowledge the failures of the project, let alone take responsibility.
The government (and the website) is also silent on the fees paid to the PMA, NLSA and other agencies, or indeed how Rs 5742 crore have so far been spent.
For a project which has been committed thousands of crores of rupees of public funds, the website has no mention of the Right to Information Act, 2005! So a citizen can’t be sure whether (and to whom) they can file a request for information or whether any information about the project would be made available if an authoirity did accept an RTI application.

Government has other ideas
Instead of looking into the myriad problems besetting the project, the government sounds inexplicably bullish.
Responding to Governance Now’s queries about the project consistently not meeting its deadlines and two companies pulling out, Abhishek Singh, director (e-governance) who is in charge of CSC project, says: “The state governments have started the course correction.”
Tripura has identified a different service centre agency (SCA) while Tamil Nadu is in the process of awarding the project to L2 and other states have started the re-bidding process, he says.
“The government plans to add 1,50,000 more common service centres to the proposed count of 1,00,000. The CSC roll-out in states will reach 80,000 by the end of April and will be complete for all 100,000 by June this year.  The government is now thinking of having a CSC in each village. It might scale up its target CSC strength to 2,50,000,” Singh says.
R Chandrashekar, secretary (information technology), also maintains that there is nothing wrong with the CSC project or the PPP model.
In an interview to Governance Now in April 2010, he had said: “I don’t think there was anything wrong with the PPP modelling. I think the fact that 3i and Comat have moved out of this business is perhaps an indication that either they were not fully prepared or they misread the market. In PPP there is certain amount of business risk involved and each organization has to make a calculated assessment of the business risk.”
The IT secretary also said that the space left by 3i and Comat would be occupied by others.

Questions of credibility
While Chandraskekhar sought to make it sound so simple, the government must address serious questions of credibility in the way the multi-crore national e-governance plan (NeGP) is being carried out.
If hardly anything exists on the ground, how are Rs 5742 crore being spent?  
Who are the intermediary companies that have so far benefited from this scheme?
Why has CAG not audited this flagship programme? Where does the buck stop—at central government or state government or the private partners?
How will the accountability of NLSA, SCAs, and SDAs be fixed?
If the benefits have not reached the ground then why is the government expanding the by 1.5 lakh more CSCs?  
Why is it that CSCs so established not under RTI Act and why is information about the money spent not being shared with the public?
We can almost smell a scam here. Can you?




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