Tag Archives: Rural India

Stories of households in poverty [4]: Household of Mathiben Garwal at Kankari Dungari village, district Dahod, Gujarat

Some time ago I studied some households living in multi-dimensional poverty conditions in various states. I spent a considerable amount of time with all the members of the families, and accompanied working members to their places of work. I tried to understand their desperate livelihood strategies, their external environment, their needs for financial services, and their access to social protection. I am sharing some selected stories here.

Fourth of such stories relates to the household of Mathiben Garwal. Mathiben does not know her age, but suggests on persistent inquiry that she may be about 40 years of age. She lives with her husband, Savjibhai, three daughters, aged 16, 13 and nine years, and two sons, aged 20 and five years. She has one more daughter who is married and lives in another village.

 Human capital

Mathiben and her husband are illiterate. Their elder son studied up to third standard and now migrates to Vadodara for work. Younger one is not admitted in the school so far. Daughters never went to school at all.

Dwelling and assets

Mathiben’s family lives in a house made of mud and bricks. It does not have a toilet but has an electricity connection with two plug points. They have bulbs but no fan; have some basic kitchen utensils and six wooden cots. They do not have a cycle, radio or a television. Mathiben cooks on a clay chulha (stove) with firewood collected by her and the children during the day.

Her household has agricultural land but neither she nor her husband knows its exact measurement. She points out this is the land you see[1]. Records show that she has six bighas of land. Her husband’s elder brother expired some year back without getting married so Savjibhai inherited his share also. Their entire land is at a higher level with low soil depth due to continued water and wind erosion. There is no means of irrigation and they grow only maize during monsoon. Earlier when Mathiben was also migrating with her husband they did not have any livestock but they acquired a buffalo when she stopped migrating. They do not have bullocks and hire bullocks from neighbours to till their land.

Livelihood strategies

As the agriculture is rain-fed and there is no other work in the village, Savjibhai migrates to Vadodara to work as unskilled wage laborer on construction sites along with his elder son. His son is also unskilled and seeks casual employment at Vadodara. They remain in Vadodara as long as they keep getting work. Duration of their stay at Vadodara can extend up to five-six months. Sometimes they have to come back in fifteen days only. They however make sure to be present at the time of sowing and harvesting their fields. Mathiben also used to accompany her husband earlier but does not do so any longer, as her health does not permit her to undertake strenuous work in Vadodara. She looks after the agriculture in absence of her husband, tends to the cow and collects firewood with the help of her children. Her husband and the son get INR 100 to INR 120 per day depending upon their bargaining situation. After a month of stay they are able to bring home about INR 1,500 to 2,000 as they get work for about fifteen days on an average in a normal month and have to spend on their food while staying at Vadodara.

Stay at Vadodara is treacherous. I visited their make-shift colony at Vadodara which is on an open space belonging to the Municipal Corporation of Vadodara. Hundreds of tribal families migrating from different villages share that space with about 25 families from Kankari Dungari village. The adult members leave for work or in search of work during the day, while their children play in the dirt and garbage of the colony. Elder children also look after their younger siblings, feed them during the day and collect firewood from far away places for cooking. None of these children goes to school which is anyway neither feasible nor possible in the given conditions.

All the families live in a small patch of land enclosed by polythene and jute sheets.  Even the roofs do not have any hard material.  The entire structure is supported by the wooden sticks. The structure is obviously not suitable for a human habitation in any weather. There is a municipal water connection for one building under construction on one side of their colony, which is used by all the families staying there to meet their drinking, bathing and cleaning needs. The colony does not have any toilet or bathroom facilities and the inhabitants use one corner of the land plot for these purposes, which makes the entire place even more inhabitable. Women have to finish off their morning routine while it is still dark. They also have to take bath hiding themselves behind their houses in the open.

None of the families staying in the area has been issued ration cards and they have to depend on the local shop keepers for procuring their daily provisions. They do not avail of medical facilities at government hospitals, as according to them whenever they tried to do that, they were made to run around from pillar to post, and did not get any medicine even after wasting much of their time. They go to the private clinics when they fall sick and have to spend a large part of their earnings on their healthcare. Their unhygienic living conditions appear to be one of the major reasons for their falling sick.

Food security and vulnerability

As their agricultural land produces only one crop, it does not meet the food requirements of the household. According to Mathiben that is precisely the reason why her husband migrates along with her son. Maize produced at the field suffices for the household food grain requirements for about eight months. Sometimes when there is an emergency they have to sell maize after harvesting and purchase later at more than double the price. Mathiben had to resort to selling maize recently when her younger son got sick. She did not have money and her husband and the elder son were in Vadodara. She had to spend about INR 2,000 on his treatment.

As two members of the household migrate to earn and the family has access to the subsidized Public Distribution System (PDS) food, there has been no episode of hunger in recent past.

Other consumptions and expenditures

Agricultural land only produces maize and hence Mathiben needs to purchase other provisions such as lentils, vegetables, cooking oil, sugar, salt, and spices from the market. She buys smaller quantities of the provisions at the village itself. For larger quantities she travels to Limkheda paying INR 7 as one-way fare.

They buy clothes for children and themselves during the marriage season and spend about INR 2,000 at a time. The major expense is however on chandlo, which is about INR 10,000 every year. Other expenses include buying shoes, soap, hair oil, tobacco and alcohol. They did not report any substantial expenditure on entertainment although the elder son gets to watch some movies in Vadodara.

 Significant events and income shocks

Mathiben’s household did not experience any major income shock in the recent years. She managed the marriage of her daughter without having to borrow money from outside.

Financial needs

Whenever the father and the son come back from Vadodara, they have cash and for want of any suitable savings mechanism they keep it at home. Their expenditures are generally small and frequent, excepting on medical care and purchasing food grains in bulk. Practice of keeping cash at home thus addresses their liquidity requirements but is very risky at the same time, as the nature of construction of their house does not make it a safe place for stashing cash. Being illiterate, the formal savings mechanisms, especially the banks, intimidate them. Even if they overcome their inhibitions and deposit money in the banks, high frequency of their transactions will entail significant loss of their working hours. They therefore need a savings mechanism where they can frequently deposit and withdraw small sums without having to waste their working hours.

They also need to borrow money at regular intervals for various purposes. What was however remarkable is that the villagers do not want to talk about their debts. They also do not view their debt in totality. Debt does not seem to be an independent entity but appears to be subordinated to its purpose. Inquiring about debt in itself generally evokes a negative response. It is only when the question is about the amount of debt for a particular purpose; the amount of debt is revealed but is limited to that particular purpose. Unless one exhausts all the purposes, the situation of indebtedness is not understood totally. Indebtedness situation of a household starts becoming clear only after the first interview, and its fuller assessment requires at least two to three subsequent interviews. Loans may be taken against some collateral or without collateral. Lending rates for collaterized loans range from 36% to 60% per annum, while there were instances of some non-collaterized loans attracting an interest rate of 150% per annum. At least one instance was reported with an interest of 25% per month on a loan amount of INR 2,000 availed for medical purposes.

The most important purpose for obtaining a loan is a medical condition followed by meeting the expenses on chandlo[2], agricultural investments and the expenses on life-cycle events such as marriages and deaths. Mathiben’s household spends about INR 10,000 on chandlo every year. Whenever they do not have cash to pay chandlo, they borrow it from outside. Mathiben had borrowed INR 1,500 just before my first visit to her household to pay for chandlo, which was organised by her immediate neighbor to construct his house. She however did not need to borrow any money for the marriage of her daughter and it was managed with the amount of chandlo and the dowry her daughter received. She normally borrows money from the shopkeepers at Limkheda. Responding to a question as to why she does not borrow from a bank, she mentioned that banks give loans against the jewellery as collateral and she does not have jewellery to offer to the banks. She also felt that obtaining a loan from a bank is a big hassle and the banks make people run around. Their situation may however immensely improve if they have an access to a reliable and reasonably priced credit mechanism.

The earning members of the household travel far for their work and are also engaged in employments not providing them with any security. They therefore need to be insured against accidents and death. The household also needs suitable insurance services providing coverage to their health and assets. As Mathiben’s husband and son migrate out of their village, they need reliable remittance services so that they do not have to personally come back to the village for delivering money to her.

Access to financial services and microfinance

A self help group (SHG) was earlier functioning in the village that had membership in her locality. She was however not a member of the SHG as according to her, only old women were made members. She further mentions that the SHG could not function for a long time as its leaders took away the savings of the members. All its activities were controlled by Mohanbhai[3], husband of the president, as he was the only one who was educated (till class 7). The SHG received a subsidized loan for buying a grain grinder which was installed at the president’s house. She promised to serve the members at half the usual rate but did not keep her promise.

Savjibhai was persuaded in 2002 by an agent of life insurnace corporation (LIC) at Vadodara to purchase a life insurance policy carrying a premium of INR 900 per annum. He deposited the amount for two years but did not continue it as he could not arrange for the premium amount timely. In the process he lost out INR 1,800 in addition to the insurance cover. Whenever he and his son have spare money at Vadodara, they keep it with their employers as it is not safe to keep it at their place in Vadodara. They get it back when coming back to their village. Sometimes they lose their money (they remember losing it on three occasions earlier, when the employers refused to accept that the money was kept with them) but keep following the same mechanism for want of any alternative[4]. They do not explore the option of saving their money in a bank at Vadodara as they feel that no bank will open their account at Vadodara. On probing deeper, Savjibhai admits that he would not want to open an account at Vadodara as he does not know and trust anybody there other than his employers. Being illiterate, he can only transact with people who he trusts and not on the basis of some pieces of paper. Savjibhai is however willing to put his savings in a bank if it is available in his village and the product suits his requirements. He feels comfortable with the post-office as he knows the postal personnel in the neighboring village Dantia. He however wants either the post-office to readjust its working hours or collect his savings at his doorstep.

Social protection programmes available to the household

Mathiben’s household has been issued an Antyodaya ration card. She is accordingly entitled to receive 16.7 kg wheat flour and 16 kg rice on payment of INR 86. According to her, she only gets 5 kg of rice. Moreover, the wheat flour she gets most often smells foul and is infested with insects. She feeds it to her buffalo. She has an option of buying 3 to 4 pouches of edible oil but is able to procure only 1 or 2 pouches, as she does not have enough money to buy it at one go. One pouch costs her INR 45 at the PDS shop, while it costs about INR 90 in the open market.

Mathiben, her husband and her son have been issued job cards under national rural employment guarantee program (MGNREGA) but they had got no employment till the time of my last visit to her household. Four items of work were sanctioned in the village under the programme and were ongoing during my visit to the village but they all related to digging wells at private fields. The concerned field-owners themselves decide who to be employed for work. They therefore usually employ people from their own households and their neighbors. Mathiben mentions that ‘the employment goes to the family members only; who will call us’. She is not aware of the provisions of guaranteed employment under the program.

Additional financial needs generated by social protection programmes

Mathiben is not able to procure her entitled quantity of edible oil for want of money and she has to buy the additional quantity at almost double rate from the open market. Thus she needs access to small credit to be able to claim her entitlement in totality.

 Leveraging on their social capital to meet financial needs

Mathiben could marry off her daughter without having to borrow money from outside with the help of chandlo amount she received from her community members and the dowry she received from the groom’s family. She is also not unduly bothered about arranging the money for the marriages of her other children unlike her counterparts in UP. Institution of chandlo thus takes care of the financial needs for the lifecycle events concerning her household.

[1] Most households in tribal villages of Dahod district live near or inside their fields.

[2] Chandlo: a community financial institution in tribal areas of Gujarat.

Life-cycle events such as marriages and deaths entail large amounts of expenditure but in most cases it gets managed with the money collected through a custom called chandlo vidhi. Chandlo is monetary contribution that relatives and other community members make towards the expenditure a household is incurring on a funeral, marriage, or other social occasions. Although such a custom is prevalent in other parts of India, but it is always at a much smaller scale. Here, the contribution may be as high as INR 15,000 on a single occasion.

Chandlo seems to be the community’s response to a deficient financial-especially savings and credit-infrastructure, based on trust and mutual dependence. It harnesses the social capital of the localized tribal community to facilitate all its members to adequately celebrate social occasions. In effect, it works as a savings mechanism to be encashed at the time of need for a lump sum. If some households do not have a social occasion for about five-six years, they organize a chandlo with some other purpose, mostly construction or upgradation of their house, to recover the money they contributed as chandlo to other households.

 It has, however, started getting oppressive now with conditionalities such as the recipient having to pay double of the amount she received for her chandlo, to the chandlo– organizing household. Such amounts over a period of time become very large and many households have to resort to borrowings to be able to give chandlo. At least five relatively better off respondents reported that they migrate to earn money to be able to pay chandlo. If it was not for chandlo, they would never migrate. Continuously increasing amounts of chandlo also raises the levels of expenditure incurred on their life-cycle events. Some resistance seems to be building up against the oppressive forms of chandlo.

[3] He has since expired. Interestingly, nobody in the village was willing to speak about the SHG and Mathiben was the first person to provide some information that was corroborated by the others in subsequent interviews. The closure of the SHG seems to have generated substantial amount of suspicion and distrust within the otherwise largely closely-knit village community, and they do not wish to acknowledge or talk about it.

[4] They are vulnerable to be cheated in other ways too. They are illiterate and save different amounts irregularly. In case of taking their money back after four-five months, it would be difficult to accurately calculate their total savings. A dishonest employer may be tempted to take advantage of this situation.



Stories of households in poverty [2]: Champaben Palas at Andhari village, district Dahod, Gujarat

Some time ago I studied some households living in multi-dimensional poverty conditions in various states. I spent a considerable amount of time with all the members of the families, and accompanied working members to their places of work. I tried to understand their desperate livelihood strategies, their external environment, their needs for financial services, and their access to social protection. I am sharing some selected stories here. The names mentioned here have been changed to protect their anonymity despite their express consent for using their names.

Second of such stories relates to the household of Champaben of Dahod district at Gujarat. Champaben does not know her age but she may be about 35 years of age, based on the estimates of her neighbours. She lives with her husband Ramanbhai and two sons aged 14 and 10 years. She belongs to Bhil tribe, an ST community.

Human capital

Champa and her husband are illiterate. They do not have any skill marketable in the employment market. Champa also suffers from bad health and is not able to perform manual labour. Their elder son stopped going to the school after passing class seven about a year ago, and has joined unskilled labour force seeking work at Andhari or at the nearby town, Limkheda. It may not be very long before he starts migrating to support his family. The younger one is studying in class five, and is continuing his studies primarily because the village has a school and he is receiving government scholarship available for the SC and ST children.

 Dwelling and assets

Their house is in dilapidated condition. It does not have a toilet or an electricity connection. They have four wooden cots and a few basic aluminium and steel utensils in the house. Champa cooks on a clay chulha (stove) with firewood collected by her and the children during the day. The household has five bighas of agricultural land[1]. Out of it, one bigha is rain-fed and is not suitable for growing paddy. They can only have one crop on this field and grow maize during monsoon. The other four bighas are irrigated and they can cultivate two crops viz. paddy and maize. They can also grow lentils and vegetables on this land. All of four bighas are however mortgaged to raise some money for her treatment. They have a milch cow.

Livelihood strategies

The household has mortgaged four bighas of agricultural land for raising some credit, and is engaged in cultivating maize in one bigha of the land remaining with them. It suffices to meet the household’s food requirements for three to four months. Champa’s husband was earlier migrating to Vadodara but has stopped it for last three years, as Champa is not keeping well. Along with his son, he looks for the casual work in and around the village when not engaged in cultivating the field. They also go to Limkheda in search of work. Champa cannot do much work so she works on the field, and when there is no work on the field she collects grass from the fields in monsoon and sells it at Limkheda. She also looks after the cow.

Food security and vulnerability

Their staple diet is maize chapattis and vegetable curry. They are not able to grow lentils on their remaining field as there is no means of irrigation and they cannot cultivate anything in the winter and summer seasons. As the lentils are very costly, they buy it in smaller quantities and get to eat it only on special occasions or when they have sufficient money. They afford to have non-vegetarian meals even more rarely, with one such meal in three-four months. Milk of the cow is only sufficient for making tea. The household has however not suffered from hunger in the recent past partly due to their entitlement to the PDS food.

 Other consumptions and expenditures

Champa and her husband have not bought clothes for themselves for last three years after he stopped migrating. As they have a school-going son, it requires them to buy books and stationery costing about INR 300 every year. The clothes for the children are procured with the amounts of their scholarship that is available to all the children belonging to ST and SC families (elder son also received the scholarship until last year). Major routine expense is on chandlo, but as their financial condition is not good they avoid making large payments for chandlo. They have to still spend at least INR 3,000 on it every year.

Significant events and income shocks

Champa has developed some heart problem, and keeps having fever and pain in her chest for last four years. She gets herself treated at a private hospital. She has already spent about INR 30,000 on her treatment. Whenever she goes to the hospital the doctors inject a bottle of glucose in her body, give her medicines, and charge about INR 600. She becomes better but starts feeling pain and fever again after about 20 days which is followed by similar treatment. Each round of pain and fever leaves her weaker; she gets bouts of dizziness and frequently suffers from nausea. According to her, even her husband has got tired of all this. Her treatment appears to be addressing the symptoms without diagnosing the disease. But that seems to be in the interest of the private hospital at the cost of her well-being, which also has serious economic implications for her household. She does not want to go to a government hospital, as she and the people like her, being illiterate, do not understand their procedures at the government hospitals and much of their time is wasted there on unnecessary things. Such practices delay the treatment and patients suffer. Moreover, the people attending to the patients lose their working hours and thus their wages.

She had to borrow INR 5,000, 4,500, 5,500, 3,000, and 3,000 on different occasions for her treatment by mortgaging her land during last four years. Her sickness prevents her husband from migrating and earning better incomes. Her long sickness has also turned away her well-wishers. They no longer come forward to help her when she has shortage of food and other provisions. Her household gets provisions only when her husband has work and brings home his wages. Her son does not get much work as he looks young and weak, and the people in need of casual labor are not convinced of employing him.

Financial needs

Champa’s household requires money to meet her medical expenses, reconstruct their house, meet their regular consumption needs including the expenditure on chandlo, and to provide for other contingencies. Some of the required funds can be generated by saving a part of the wages of her husband and her son, whenever they get work. They thus require a savings mechanism that is not only reliable but also has provisions for smaller but frequent transactions. It should also have provisions to conduct transactions outside their working hours. All of their financial needs, however, cannot be met by savings alone and they require frequent access to smaller but reasonably priced credit for their agricultural investments, to meet Champa’s medical expenses and other emergency needs, and smoothen their consumption during the periods of lean incomes.

Champa’s husband needs to be insured as he is the only earning member as of now and if something happens to him, Champa will also be deprived of her medical treatment. His daily wage casual employment does not provide him with any security. Health insurance is equally important, as, in addition to reduce their health expenses, it will facilitate their treatments at more competent hospitals. They also need to insure their cow, the only productive asset other than their agricultural land.

 Access to financial services and microfinance

Champa does not have access to any formal financial service or microfinance. This explains why she had to mortgage four bighas of her land to borrow small sums of INR 3,000 to 5,500 on five different occasions. Mortgaging of the land has further limited her capacity to repay her loans. She is now finding it difficult to access loans through informal mechanisms as well, as she does not have any collateral to offer and the lenders who offer costlier loans without collateral are apprehensive of her repayment capacity. She had to therefore cajole her niece to lend her INR 2,000 just before my final visit to her household, as she was not getting the money from any other source and she had to show herself to the doctor.

 Social protection programmes available to the household

Her household has got an Antyodaya ration card to access the PDS subsidised food. Ration cardholders in the village do not seem to be aware of their exact entitlement of subsidized food. This situation allows the PDS shop-keeper to disburse less quantities of foodstuff than those prescribed, and record larger quantities in their ration cards that the ration cardholders either cannot read or do not want to read considering it useless. According to champa, she gets five kg of rice, 10 to 15 kg of wheat flour and two kg of sugar every month on payment of INR 120. The entries on their ration card reveal that they were disbursed 17 kg of wheat flour, 16 kg of rice and 4.5 kg of sugar in July 2008, and 16 kg wheat flour, 13 kg of rice and two kg of sugar in August 2008. According to provisions in TPDS for Gujarat state, an Antyodaya cardholders is entitled to receive 16.7 kg flour (for INR 38), 16 kg rice (for INR 48), and 500 gm sugar per person in the household. Thus, Champa is receiving less than her entitled food at higher than prescribed rates. Even more interesting is the case of cooking oil. None of the villagers including Champa were aware of its provision or reported to have received it but as per their cards, they have “received” four liter of oil in July and one liter in August 2008. Earlier also, according to her ration card, one liter of cooking oil was distributed in the months of July, August, September and October 2007 respectively, which she denied to have received.

 Champa’s household also received subsidy for construction of her house under IAY in the year 2005-06. According to her, they received a total of INR 28,000 in three instalments, out of which an amount of INR 11,000 was allegedly taken away in various forms of commission even when the money was disbursed to her through a bank account.

A provision has been kept in Indira Awaas Yojana (IAY) to disburse the housing subsidy through a bank account so that the money is transferred in full to the account, and accessed in full by the recipient. This is in response to the reports of the recipients not receiving the total amount of subsidies in the cash delivery system. The bank however requires them to withdraw their money in the presence of the sarpanch and one block level government official as bank people do not “recognize” them. Such requirement creates situations similar to the cash delivery systems and the recipients have to part with a portion of their installment under a threat that if they do not do so they would not receive the next installment. Champa says, ‘We don’t understand such things, as they get money in their hands and then pass on some amount to us, mentioning that they will have to give this much to this person, that much to that person etc. When we are in bank, the sarpanch asks us to put thumb impressions on papers and then gives us some money mentioning that the remaining amount is needed to be given to officials who would not do our work without “eating” money. If the money is not given to these sahibs we would not get our next installment. We don’t even know how much is being given to whom. If we come out of the bank without paying, the sarpanch comes to our home, scolds us and threatens that we would not get our next installment if we do the same. We are tribals and illiterate so we don’t understand anything.’ Thus involving local government institutions in the delivery of social protection suffers from the structural deficiency characterizing such institutions. The institutional centrality of one person, sarpanch, within the institution of gram panchayats makes the process of delivery of social protection immensely vulnerable to misuse.

The official records suggest that she has been disbursed a total of INR 35,887 as the subsidy amount but according to her she has received only INR 17,000. There is no way to verify the veracity of her statement, and the sarpanch and the government officials predictably denied her allegations. Her allegations were however anecdotally corroborated in several interviews[2]. In any case, whatever money they received was not sufficient for the complete construction of their house. They borrowed INR 5,000 at an interest rate of 120% per annum and put in their savings worth about INR 5,000 towards constructing the house. With the available money, they were able to construct the foundation and erect the walls. As the structure was open, it collapsed during the rains.

After the collapse of the house they got it photographed by spending INR 300, approached the block office for government prescribed relief, filled up the application form for such relief, and took several rounds of block office and the house of the sarpanch, but to no avail. All this took a heavy toll on Champa’s health affecting her heart and requiring them to mortgage their fields. In addition to considerably reducing their income because of the land mortgage, her disease prevented her husband from migrating, which further worsened their economic condition.

An NGO was assigned the task to construct 44 latrines under TSC in the village, but only the toilet seats were found put in the open without walls or soak pits. One toilet seat is also kept in the field near her house. Further inquiries revealed that the NGO has already been disbursed the total budget and no further construction would take place.

 Additional financial needs generated by social protection programmes

Champa admits that if the subsidized PDS food was not available to the household, her family would have starved for at least one to two months every year. This however creates a demand of INR 120 for her household on the day of distribution every month. Sometimes when they do not have that amount and cannot arrange for it, they have to forego their entitlement of the subsidized food. Champa however tries very hard to arrange for the money on the day of distribution. Earlier she used to ask her neighbors for money but they have started avoiding her now due to her health problems and worsening economic condition of the household.

Access to cheap and adequate credit may have enabled her to construct her house completely. That would have improved her condition of living substantially and would have perhaps benefited her health. In absence of such access to credit, not only the IAY subsidy was rendered totally useless, but the household also had to pay substantial interest on INR 5,000 they borrowed and lost their savings worth INR 5,000. Similarly, they could not derive any benefit from the provisions under the TSC for want of access to small but reasonably priced credit.

 Leveraging on their social capital to meet financial needs

Champa is not worried about the expenditure she needs to incur towards the marriage of her sons in terms of the dowry and feast for the villagers. As she has been contributing chandlo to other households towards marriages and other occasions, she knows that she would get sufficient amount in the form of chandlo to be able to marry her sons off without taking recourse to borrow at a high interest rate. Her sickness has however weakened her social ties and she is not able to manage small amounts of loans without interest from her neighbors now as much as she could do earlier. She could however arrange for a loan of INR 2,000 recently from her niece to meet her medical expenditure.

[1] She does not know how much land she owns; most of the villagers do not know the measurement of their fields, they know it physically. It is like they belong to the land, rather than land belonging to them. They always come up with the quantity of seeds they require to sow the fields. In case of Champa, the land requires 25 kg of maize.

[2] Interestingly, the people who were better off than others and had managed to receive such subsidy denied having been forced to pay a cut on their subsidies. They were perhaps aware of the fact they did not deserve it and so it was fair for them to part with a portion of their ill-gotten money. Men in the other poorer houses were also hesitant in talking about such things, perhaps fearing that they would be victimised later if the concerned officials and the sarpanch came to know of their reporting it to me. Women in all cases were more forthcoming, perhaps because they are not so street smart to foresee such consequences of their revelations and also because they are perhaps more sensitive to the injustice and have not fully accepted it.


Stories of households in poverty [1]: Narayanidevi Kamal at Pratappur village, district Kanpur Dehat, Uttar Pradesh

Some time ago I studied some households living in multi-dimensional poverty conditions in various Indian states. I spent a considerable amount of time with all the members of the families, and accompanied working members to their places of work. I tried to understand their desperate livelihood strategies, their external environment, their needs for financial services, and their access to social protection. I am sharing some selected stories here. The names mentioned here have been changed to protect their anonymity despite their express consent for using their names.

First blog in this series tells the story of the household of Narayanidevi Kamal, 42 and her husband, Ramlal, 45. They have have two daughters and two sons. The elder daughter is married and lives with her husband in another village. Narayani lives with her husband, one daughter, 12 and two sons, 13 and 15 years. They belong to Kamal, one of the Scheduled Castes.

Human capital

Narayani and her husband are illiterate. The elder son left his studies after studying till class five, while the younger one studied till class eight. Narayani says that poor people cannot educate their children, as it is a choice between hunger and education. The younger daughter is however studying in class seven. Her elder married daughter is illiterate, so is her husband. Her next generation is thus also deprived of even basic education and is becoming part of the ever increasing unskilled labour force. Worse still, they are not getting sufficient food and therefore their capability to perform unskilled, physical work will also remain limited.

 Dwelling and assets

Narayani’s family lives in a mud house. The household has two wooden cots and a few aluminium utensils. It does not have any other consumer items, not even a bicycle. Narayani cooks on a clay chulha (stove) with firewood collected by the children during the day. The house has no toilet or electricity connection.

Ramlal has one brother, and between the two, they have one bigha of land. It is wasteland and nothing grows there. His brother has a pair of bullocks which he also uses to plough the land taken on sharecropping. The household is raising two goats on half-share basis[1].

 Livelihood strategies

They have been traditionally sharecropping on the land of others and that is why his brother keeps a pair of bullocks. Narayani mentions that nowadays, there is no land available in the village on half share; it is only on one-third and one-fourth share. They are also required to share on the investment, so not much is left with the sharecroppers. ‘We have to do all the hard work without getting much in return. But we are helpless before our stomachs.’ They have been sharecropping two bighas of land on one-third share for last two years, which supports their family for two to three months in terms of their food requirements. They want to have more land on sharecropping as both of them along with their sons can manage up to ten bighas of land, but no landowner is willing to share land on one-third share with them. At the time of my last interview, Ramlal was in the process of negotiation for sharecropping one more bigha of land on one-fourth share.

Ramlal and the sons seek wage labour in and around their village to meet the household needs. They cannot keep away from the village for the whole day, as the agricultural fields need their continued presence in the village. They get work when there is a construction activity or some landowner needs extra hands on his fields. Narayani also wants to work as a casual labourer, but as there is so little work for men, how and where would women get the work, wonders her elder son. She, however, gets work during the season of sowing, transplanting and harvesting the crops, and along with her sons and the husband she earns food grains that meet the food grain requirements of household for two to three months.

The situation had however become worse towards the end of my stay in the village, as Ramlal fell down from a tree he had climbed up to chop tender branches as fodder for the goats. He probably broke his ribs and was in immense pain. He was not in a position to work for more than a month at the time of my last visit to the household. He had got absolutely no treatment for want of money.

 Food security and vulnerability

The livelihood strategies adopted by the household imply that there would be times of food deficiency, and that is what it faces for about two to three months ever year at different points in time despite the PDS support. On certain occasions, they get to eat only once in a day. Chapattis are normally eaten with potatoes as other vegetables are very rarely purchased and lentils are luxury for them. Potatoes are also not available for three to four months in a year and then it is salt that is consumed with chapattis and rice. At the time of my last visit (25 March 2009), the household had wheat flour to meet the requirements of only two days, and had no rice, potatoes or vegetables. With no work available and no incomes forthcoming, Ramlal had gone to his sister’s place to borrow some money for food and explore if she can get him the treatment. Narayani was not expecting him to be back for next four-five days and did not know where she would be getting the food for her household from. On probing a little deeper, she said that she would first try to borrow from the neighbours but was not very hopeful as they are also on the same boat. She was also planning to request for some food grains from her landowners on loan. She always attempts to repay such borrowings as fast as possible, especially with the PDS subsidised food, and the cycle goes on. It gets broken only when her husband and sons get employment for some prolonged periods. On being asked what she would do if she does not get food from her neighbours etc., she says that it can only be answered by God. He will make some arrangement.

 Other consumptions and expenditures

It is very difficult to spare money for the needs other than food and serious medical emergencies. Her daughter and the younger son have two sets of clothes that were made using their scholarship amounts. She has only one saree which was given to her by her married daughter as it was old and useless for the daughter.

Significant events and income shocks

The household did not have any money and hence married off their elder daughter without any celebration and dowry, whatsoever. Because of this she had to be married to a person, who is illiterate, does not have any assets, and seeks work of casual nature requiring no skill.

 Financial needs

As the household does not have money or access to suitable credit services for agricultural investments, Ramlal borrows it from his landowner and repays one and a half times of it at the time of harvesting. Thus, effectively they pay an interest at the rate of 150% per annum on such borrowings.

Narayani did not have money for Ramlal’s treatment after he got injured. She did not borrow any amount as she was not sure if she would ever be able to repay it with an interest rate of more than 120% per annum[2]. After he fell down, he did not eat anything for first fifteen days. He started eating a bit afterwards that but cannot sit at all. He could not be taken to the government hospital that is located about six kilometres away, as the money could not be arranged for the transport. Even otherwise they were not very keen on the government hospital as she says they only prescribe some medicinal tablets to be purchased from the market. They also call the patients to the hospital very frequently, thus further increasing the burden of expenses on the patients’ household.

The accident has rendered him unable to perform any kind of work for more than one month. It is quite likely that he may be permanently disabled and the household loses out on one working member. Thus the eventual cost of unavailability of credit may be enormous not only in economic terms but also in terms of Ramlal’s wellbeing. The household therefore desperately needs an access to reasonably priced credit to sustain itself. It also needs insurance cover in terms of health, life and accidents, as that would have ensured Ramlal getting good and timely treatment. The household also requires a savings mechanism that is not only reliable but also has provisions for smaller but frequent transactions so that a part of Ramlal’s wages can be saved whenever he gets work and receives wages.

 Access to financial services and microfinance

She has not been a member of any SHG, as there is no SHG in her locality and no woman from her locality has ever been an SHG member. She feels intimidated with the thought of attending an SHG meeting with so many ‘big’ people. She is also not sure if she would always have the mandatory amount to save on the day of the meeting every month.

 Social protection programmes available to the household

Narayani has an Antyodaya card that entitles her 15 kg of wheat (@ INR 2 per kg), 20 kg of rice (@ INR 3 per kg), 2 kg of sugar (@INR 14 a kg), and kerosene (@ INR 11.50 per litre)  per month. Although she economises on kerosene and very seldom buys sugar, she tries to buy entire amount of wheat and rice every month that meets her fifteen days requirement at least. If she does not have money, she tries to borrow it from the neighbours. Though sometimes she does not have money to buy her entire quota and buys whatever she can.

Ninety-one cards for subsidised ration were issued in her village, Pratappur, consisting of 62 BPL cards and 29 Antyodaya cards. Village Development Officer (VDO), a local level government official, visited the village and announced that he had been instructed to renew the cards and convert nine BPL cards into Antyodaya cards. Interestingly, this was not based on any assessment of the people’s conditions in the village. Amarsingh, a panchayat member, enquired from him about the criteria to be followed for the purpose and was informed that the cards to be downgraded should belong to either very poor or widow-headed households. When he asked the VDO to hold a general meeting of the villagers and decide the issue in the meeting, the VDO told him that his higher ups had instructed him to only consult the Gram Pradhan. The situation was allegedly exploited by the Gram Pradhan, and the panchayat secretary- a village level government functionary. In addition to the nine BPL cards converted into Antyodaya cards, they fraudulently issued four BPL cards and six Antyodaya cards to different households in exchange of an amount of INR 300. This resulted in an increase in the total number of cards. There are now 57 BPL and 44 Antyodaya cardholders in the village.

The subsidised food is however being received for only 91 cards (53 BPL and 38 Antyodaya), the same being the official figures. The PDS shopkeeper, therefore, could not meet the demand of food from the new (forged) cardholders. Amarsingh and his friends then persuaded the shopkeeper to reduce the delivery of food to the regular cardholders by 5 kg and distribute thus spared food to the new cardholders as ‘after all they are also poor; so what if their cards are forged.’ This has however reduced the food entitlement of households like that of Narayani, further worsening her situation.

Narayani’s household has also been provided with the financial support under IAY for the year 2008-09.  According to her, total subsidy paid to them is INR 25,000. They were aware of their entitlement of INR 35,000 for the purpose but believed that out of the sanctioned amount, 4,000 to 5,000 INR had to be spent on paperwork and other formalities, and the remaining amount of INR 5,000 to 6,000 was taken away by the panchayat secretary and Gram Pradhan. In fact, no amount should be spent on any formality and they should receive the entire sanctioned amount. Moreover, construction of a single room without a toilet costs more than INR 40,000 according to the villagers’ estimates. Her house is therefore incomplete as she does not have any means to arrange for the remaining amount to complete the house.

NREGA job cards have been issued in the names of her husband, her son and herself. However, none of them has got any work under the programme so far, while they were among the people who had been issued job cards at the very first instance. Only two items of works have been taken up under the programme in the village- earthwork to fill and level a land depression, and brick-laying on one of the inner streets in the village. A portion of both works was reportedly got done by hiring tractors. As there is no provision of employing machines for work under the programme, the people were reportedly shown to have worked on paper. Since it is cheaper to accomplish works through machines rather than through human beings, the difference in cost was allegedly pocketed by the Gram Pradhan and government functionaries. The Gram Pradhan, on the other hand, alleged that the Junior Engineer in charge for approving the works under NREGA was demanding for 10% commission on the total expenditure to be incurred for the works under the programme. Consequence of all this was that out of the ninety people having NREGA job cards only twenty-one had ever got any employment under NREGA. As against a hundred days of guaranteed employment every year, only two persons could get a maximum of thirty days of work during last three years. No woman in the village was given any work under NREGA.

Narayani and her family members have not opened their accounts in the bank to receive their NREGP wages, as they do not have minimum money required to open such accounts. She plans to open the accounts only when she gets the work and receives her wages.

 Additional financial needs generated by social protection programmes

The subsidized food through the PDS requires her household to arrange for more than INR 100 on the day of its distribution. Sometimes when they neither have that amount nor can arrange for it, they have to forego their entitlement of the subsidized food. Narayani feels that she would be much better off if she has an access to smaller loans for shorter durations. Such loans would enable her to utilize the subsidies available to her without burdening her much, as the loans would be small and for shorter durations.

Subsidized housing programme also creates a need for cheaper and easily accessible credit services. The housing subsidy is of no use until the house is totally constructed and worth inhabiting. This subsidy can have an impact if and only if the recipients are able to arrange for additional financial resources, for which the poor recipients like Narayani need an access to reasonably priced credit products. For want of such access, she has not been able to complete the construction of even one room and use it.

Leveraging on their social capital to meet financial needs

Realizing the impossibility of his treatment at his home, Ramlal’s sister called him to show him to the doctor. According to Narayani, his sister is also in a similar economic situation but is trying to help them through her limited means. While leaving he had also planned to borrow some food grains from her. Narayani is waiting for him to come back with the food grains but is not sure if his sister would be able to help them with food grains.

Her daughter also helped Narayani by giving her an old saree, and that is the only saree Narayani has and keeps wearing. However, her son-in-law is also as poor as is Narayani and thus cannot help her much. His household does not have land or any productive asset. He seeks work in his own village and does not go out, as he is illiterate; ‘what will he do outside?’ wonders Narayani.

[1] There is system of ‘share-raising’ of livestock, where a household adopts an animal immediately after it stops breastfeeding on its mother at the place of its owner. It is either sold when it matures and the sale proceeds are shared equally between the owner and the raiser, or if one of the parties wants to keep it, the other party is paid the half of market share.

[2] The interest rates are always higher in cases of such emergencies as the creditors know that the borrowers are too desperate to be able to bargain


Towards improving basic education in rural India

It is universally acknowledged that education, at the very least basic education, is critical for leading a life of even minimally accepted quality. Jean Dreze and Amartya Sen in their recent scholarly work on India, ‘An uncertain glory: India and its contradictions’ (2013: Penguin Books) identify nine pathways through which basic education helps people improve their wellbeing “particularly in the modern world, where so much depends on the written medium” (p. 107, ibid). In the light of this, the deplorable state of basic education in India deserves all the attention it gets, and more.

A study commissioned by the World Bank entitled “Missing in Action: Teacher and Health Worker Absence in Developing Countries” (http://www.ksg.harvard.edu/pepg/PDF/events/MPSPE/PEPG-05-14kremer.pdf) concludes that government school teachers represent among the least motivated class of workers in India. Based on a survey of 3,700 schools across 20 Indian states the study found an absence rate of 25% among teachers that is much higher than the absence rate of 10.5% among Indian factory workers. The Bank’s Development Policy Review for India (2006) also indicated that half of the students in the 5th standard could not read the text of the level taught in the second grade, and two thirds could not solve division problems meant for those studying in the second grade. The Review further estimated teachers’ absence rates to be from 35% to 85% in different states. More recent studies do not suggest any significant improvement in the situation.

Within the generally dismal state of basic education in the country, rural primary education is even more pedestrian in comparison to its urban counterpart. In addition, the gap between quality of delivery of education in rural schools and that in the schools in urban areas is continuously widening. This blog post looks at some practical issues facing rural primary education and attempts to suggest measures to address them.

Indian rural primary education system like any other such system has three main stakeholders other than the pupils:

  1. a) Teachers
  2. b) Management of the schools, i.e. the government in case of a majority of the schools in rural areas, and
  3. c) Parents-broadly the community.

My studies in rural areas of Gujarat, Uttar Pradesh and Rajasthan reveal that among the three stakeholders of rural primary education teachers have the least incentive and motivation, in the present situation, to put in their best efforts towards improving the quality of delivery of education. Generally, their own children do not study in these schools. In addition, they do not stay in the villages of their schools and thus do not feel the kind of kinship with the community and the children needed for being self-motivated in this regard. In a large majority of cases, even if they resided in the villages before getting the job, their first response to getting their job was to shift to nearby town or the city for better quality of life, and more importantly, for better education of their children. This reflects their lack of confidence on the quality of education imparted by their own selves. This situation further disincentives their regularly traveling to their schools  as it requires them to spend money in reaching the school. They tend to avoid it if it is possible to do so without getting into any trouble.

Moreover, as the school hours are less than normal working hours, many of them are tempted to start some small enterprise of their own, which in most cases, is feasible as they have already shifted to a town or a city. Even if they stay in the villages, they open shops or have to look after their fields and so on. In such situations, being able to not attend the school offers positive incentives. Thus, if there is no corresponding negative incentive, they prefer not going to the school regularly. It is not that none of the teachers has any commitment: in fact, most of the new recruits were found to be quite committed in my interactions but the entire system which incentivizes the absenteeism and not working, slowly and gradually changes them. No-retention policy and the fact that their remunerations and promotions are not directly linked to the learning levels achieved by their students do not leave them much motivated to put in their best efforts in teaching.

In my studies an overwhelming majority of parents reported that all the teachers are never present in the school and most of the teachers, even when they attend the schools, are not interested in teaching. They just sit with each other, gossip and eat even during the non-break hours of the school. I also frequently encountered such situations whenever I visited primary schools in remote villages during their class hours. Some parents even took drastic measures to withdraw their kids from the schools altogether as according to them the kids were not learning anything in the school. Rather, as they were left unsupervised they learnt all bad habits, pointed out the parents. However, in all cases, respondents well understood the importance of education for their kids, boys and girls both.

The other stakeholder, the government education machinery other than teachers, can never be in a position to monitor the rural schools effectively and ensure that all the teachers attend schools regularly because of such a vast, spread out network of the schools. It is not physically possible to deploy sufficient resources to oversee functioning of the schools regularly. Deployment of technology, wherever it is done, is also not proving to be very effective due to unreliable electricity supply in most of the villages and the teachers’ attempts to tamper with the machines. An element of rent-seeking makes the government machinery even less efficient than what it can be otherwise.

Result of the aforesaid situation is that a majority of the children studying in 4th and 5th standards, particularly those belonging to socially and economically disadvantaged households, cannot properly read or write even in their own mother tongue let alone showing any evidence of more sophisticated learning. This holds across almost all rural primary schools I visited in Gujarat, Uttar Pradesh and Rajasthan.

One of the important ways to address the situation may be through promoting deeper and effective involvement of the local community in the matters of managing the schools in their villages. In any case, they have the biggest stake in the entire affair and once they are convinced that their voice is being heard and being acted upon, will be most motivated to reform the way their schools are being run to benefit their own children. Efforts need to be made to channelize such motivation in proper systems and procedures.

State governments have been making efforts in this direction with varying degrees of commitment. Centrally-sponsored program, Sarva Shiksha Abhiyan (SSA: Drive towards Education for All), launched in the year 2000-01 has community participation as one of their major objectives. The Abhiyan has provisions to organize Village Education Committee (VEC), Parents-Teachers Association (PTA), and Mother-Teacher Association (MTA) in the villages of their catchment area with the help of Panchayat representatives.

My interactions with the villagers, members of VEC, PTA and MTA, and teachers in all the three states do not present a very encouraging picture. Principal findings from my studies and discussions are enumerated below:

  1. All the three committees/associations, namely, Village Education Committee (VEC), Parents-Teachers Association (PTA), and Mother-Teacher Association (MTA) have been formed in the villages under study
  2. The three committees have representations of the teachers, village Panchayat and other members of the villages
  3. None of the committees in any village has been formed by following the guidelines for the purpose, which require calling for open meetings to select members other than ex-officio and nominated members. All the ‘selected’ members stated that their names were put in the committees by the respective Head Teachers.
  4. Most of the villagers other than the members are completely unaware of existence of such committees in their villages. This clearly defeats at least one major purpose of forming of such committees to serve as grievance redressal mechanism for the villagers. Schools and the teachers are hardly accessible for redressal of the grievances of the villagers belonging to disadvantaged sections.
  5. Even more importantly, some of the members themselves did not know that their names were in the committees and associations. They came to know about their membership status only because of this study.
  6. In all the sample villages, there are members of MTA and PTA whose children do not study in the schools and thus cannot be members of these associations.
  7. The members do not know the roles of their committees or associations and their own role within the same.
  8. The meetings are not held at prescribed intervals. VEC is to meet at least once every quarter and the MTA and PTA are required to meet every month. At the most such meetings are held once a year.
  9. Even in such rare meetings ordinary members never speak. Only the teachers, or sometimes (although very rarely) the Panchayat head, speak.
  10. Agenda for the meetings are decided by the Head Teacher only and in no village any agenda item was proposed by a non-teacher member.
  11. Agenda items are required to be circulated at least one month in advance but, in reality, are never circulated before the meetings.
  12. None of the head teachers or other teachers is aware of guidelines prescribed for the purpose and the required documents and registers are not maintained in the schools.

Thus, even when mechanisms have been developed under SSA to expand the participation of local communities, Panchayats and parents, in reality they are functional only superficially. Additionally, my experience of working in the area of education in rural areas shows that the long-term and sustainable improvements in education in rural areas cannot be achieved by developing isolated islands providing quality education such as Navodaya schools. It will require making Government schools in rural areas more accountable to the local communities and strengthening the systems and mechanisms already in place for the purpose.

My study further suggests that we need to immediately take the following preliminary measures as the first concrete step towards improving basic education especially in rural India:

  • Capacity building of existing institutions, such as VEC, MTA and PTA
  • Capacity building of local govt. functionaries i.e., members of village Panchayat and sarpanch
  • Team building among the head teacher, teachers and other local institutions with the community
  • Mobilizing and facilitating the entire community to explore modifications in the present structures and functioning of local education institutions such as VEC, PTA and MTA so that they reflect voices, concerns and expectations of the entire community
  • Supporting the community to develop and evolve other institutions, if need is felt by the community to take over complete management functions and ownership of their local schools
  • Capacity building of such community management and ownerships institutions
  • Orientation of teachers and other school functionaries so that management of schools by the community is accepted in its true spirit
  • Interpreting required learning competencies in each class in the language and tools understandable by all the parents so as to enable them to monitor their children’s progress
  • Exploring the feasibility of revising curriculum to make the contents more relevant to the environment and lives of the community and the children by bringing together pedagogy experts and the local community
  • Exploring reforms in examination systems so that the learning levels of the children can adequately be measured in terms of targeted required learning competencies
  • Further research on intersection of the community and local schools through new forms of participation, responsiveness and accountability

Implementation of the above suggestions may be a part and also starting point of much bigger initiative in response to   “a key challenge in the twenty first century is constructing new relationship between the ordinary people and the institutions- especially those of government- which affect their lives” as argued by John Gaventa, Institute of Development Studies, University of Sussex, in a presentation for the Ford Foundation. According to him, “rebuilding relationships between citizens and their local government means working on both sides of the equation- that is going beyond the ‘civil society’ or ‘state-based’ approaches, to focus on the intersection through new forms of participation, responsiveness and accountability”.

India Post: A story of missed opportunities [Part II: Common Service Centres (CSCs)]

India Post is a unique institution in many ways. The most important aspect of it is however its extensive network that has capability to deliver tangible as well as intangible goods to almost anybody residing anywhere in the country. Various social groups, particularly those difficult to be reached, can be included in the process of development while leveraging this infrastructure. Few low-income countries can boast of possessing such rich physical network capital.

An organization as old and as deeply entrenched in traditions as India Post needs to keep reinventing itself if it aspires to remain relevant in a rapidly changing political-social-economic landscape. India Post has however been exhibiting massive inertia to change at fundamental levels even in the face of some very potent opportunities during the recent years. India Post story may be one of the most remarkable post-Independence stories of missing almost all possible opportunities to become a far more effective partner in the growth and development process of India than it currently is.

In the first part of this blog story I discussed how (and why) India Post missed out on an extremely important opportunity of delivering microfinance to the financially excluded households of India despite the fact that it was almost ideally placed to do so. In the second part of the story I will discuss another important missed opportunity that could have transformed the rural areas of the country besides generating significant additional revenues for India Post. This opportunity related to delivering various services to Indian villages on internet platforms that are otherwise not available, and not possible to be cost-effectively delivered, in rural areas.

Advent of internet and information technology is associated with developing innumerable new services and products that improved human wellbeing substantially. It has also revolutionized the way existing products and services are delivered and accessed in terms of efficiency of delivery, quality and reach of the services. Internet is even more relevant in the rural areas of low-income countries such as India, where delivery infrastructure is poor, and economy of scales is not possible due to low population density and large physical distances. In fact, certain services that are taken for granted in urban areas can only be made available cost-effectively in rural areas on internet platform. However, we need a physical network in the villages that can make such an internet platform available to the villagers. With 130,000 post offices for about 600,000 villages in India such a physical network is already in place.

There was an effort to utilize this amazing physical reach of post offices that too at a time when nobody thought of leveraging internet to provide various desperately needed services in rural areas. When I was Director of Postal Services for Ahmedabad region in Gujarat in the year 2002 I found out that Banas dairy at Palanpur in North Gujarat had installed a huge dish antenna at its premises that could provide internet within a radius of 25 km if one installed a smaller antenna within that radius of the big antenna. Banas dairy had collaborated with Indian Institute of Technology, Chennai, for the purpose. Those were the times when only dial up internet was available in largely urban areas in India. I procured the small antenna and put up a computer system along with a printer and a web camera at a village named Kumbhasan in Palanpur district.

This was the first such common service centre (CSC) in a village in the entire country.

I sent a detailed report to the Postal Directorate in New Delhi and requested them to take up with the Department of Information Technology (DIT) for providing funds for the initiative. The top postal management in Delhi was so insulated from the changing realities around them that they could not see the potential of such an enterprise. This village post office CSC remained a solitary experiment and lost its importance in the scheme of things even in Gujarat after I moved out of India Post in 2004.

People and policymakers gradually woke up to the potential of such centres in the villages. On the recommendation of National Commission on Farmers, Government of India announced to set up rural knowledge centres at village level ‘using modern information and communications technology (ICT)’ in the Union budget for the year 2005-06. In the next Union Budget the Government announced launching of National e-Governance Plan (NeGP) and establishing 100,000 common service centres (CSCs) across the country. At that time, even when I was out of India Post I wrote to the policymakers of the India Post to take advantage of the situation, and the money available under the program, to computerize all rural post offices. They could then improve quality of their services, expand basket of their services, and improve their revenues, while significantly increasing participation of rural population in the larger economic space being created in the country. This could have triggered several processes that could have led to an unprecedented rural prosperity and substantial revenues for India Post. Most importantly, there were more than 100,000 rural post offices and India Post was not required to set up any additional physical post office for the purpose.

The Government of India for want of any other alternative asked the state governments to contact NGOs working in rural areas to identify the persons in the villages capable of running the CSCs and install the requisite hardware. The hardware was installed but the people running the CSCs were not supported to develop their business plans or to develop collaborations with service providers, including the government agencies, to deliver their services to villagers through CSCs. Most of the NGOs were also not competent to provide such handholding to CSC personnel. A large majority of the people selected to run CSCs did not know how to operate a computer at all; having lived in villages many of them had not even seen a computer beforehand. Needless to say, all such CSCs failed in accomplishing their mission miserably, and the money spent in procuring and installing the hardware was totally wasted.

Based on the reports from the field, the NeGP got the program reviewed through IL&FS which recommended to the Government to engage with private sector and resort to public private partnership (PPP) for the purpose. Interestingly, India Post remained totally oblivious to such happenings in a sister department (the then department of information technology) under the same ministry (of communications & IT).They could have leveraged the situation to use 100,000 of their post offices as common service centres, which could have made them an extremely important public institution at least for rural India.

According to the provisions of the proposed PPP the government agencies were required to provide revenue support for establishing the CSCs while the private sector partner (called service centre agency, SCA) was to identify the person to run the CSC (designated as village level entrepreneur, VLE), establish the CSC, develop the business plans for the CSC in such a way the SCA also earned reasonably in the process, and provide for and nurture all the required linkages with public and private service providers. The tenders were called for to select SCAs on the basis of their demand for the lowest amount of revenue support from the government. Some private sector companies recognizing the importance of CSCs, and business potential of the idea, quoted for negative revenue support implying that they were willing to even pay to the government for allowing them to establish CSCs. Unfortunately, top management within India Post did not have vision to see this.

This has however resulted in sinking a huge amount of money in creating a network in the villages from scratch on part of the governments of India and the states, while at least a part of such a network was always available at government disposal. The PPP model does not seem to be working optimally with both partners making several allegations against the other. Anecdotal evidence suggests that some SCAs charged exorbitant sums from the villagers before appointing them as VLEs on assurances that VLEs would be making good amount of money. This did not happen and the VLEs agitated at several places. SCAs are still struggling to convince various state government departments to route their services through CSCs. VLEs are still agitating, and CSC network is not able to deliver as expected in several states. All this could be at least partly avoided if India Post had offered its network for common service centres in the villages. In addition to ensuring provisioning of needed products and services to the rural areas seamlessly it could have generated significant revenues to India Post, which keeps struggling to reduce its operational losses. It would have been even more significant for India Post in the context of the emphasis of the current Indian Government on digitization of all aspects of economic transactions in the country.