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Common Services Centers (CSC) Scheme

  Content Index:
1. National e-Governance Plan (NeGP)
2. The CSC Scheme
2.1 The Guiding Principles
2.2 Key Stakeholders
2.3 Technology and Connectivity
2.4 Government Financial Support

1. National e-Governance Plan (NeGP)

1.1 The Government of India is currently implementing the National e-Governance
Plan (NeGP) with the vision to make all Government services accessible to the common man in his locality, through common services delivery outlets and ensure efficiency, transparency and reliability of such services at an affordable cost. To enable this, the NeGP has envisioned a three-pillar e-governance infrastructure
model for delivery of web-enabled anytime, anywhere access to information and services across the country, especially in rural and remote parts of India. These three pillars are: State Wide Area Networks (SWAN), National Data Bank/State Data Centers (SDC) for secure, fail-safe data storage and Common Services
Centers (CSC) as the primary physical front-end of the service delivery mechanism.
1.2 The Common Services Centers (CSC) are proposed to be the delivery points for
Government, private and social sector services to rural citizens of India. Under the CSC Scheme, a Public Private Partnership (PPP) model has been envisaged for undertaking this challenging task of setting up delivery points in rural areas across the country. The objective is to integrate private sector goals with government’s social objectives, into a sustainable business model for achieving
rapid socio-economic change in rural India through a combination of Information Technology (IT) and non-IT services.
1.3 The aim of the CSC Scheme is to establish 100,000 rural kiosks across the country with an equitable distribution - one CSC for every six census villages.The CSC Scheme is not just about rolling out IT infrastructure but to build a network of 100,000+ rural businesses across India.
1.4 To ensure availability of e-Government services, twenty-seven (27) Central, State and Integrated Mission Mode Projects (MMPs) along with eight (8) support components have been identified under the NeGP to enable and facilitate rapid introduction of e-governance in the country. Various Ministries/Departments are
in the process of defining the services and service levels of their respective MMPs and undertake the Business Process Restructuring/Reengineering (BPR) with a view to enable delivery of such services to citizens through the CSCs. Thus, availability of government services to the citizen is being addressed by concerned
Ministries/Departments and additional services would be progressively added, as more and more MMPs are implemented in a time-bound manner. The goal that has been set before the concerned Ministries/Departments is to move up the ‘Service Pyramid’ and provide Web-enabled services, whereby all MMP
departments can then be seamlessly integrated, and citizens can have access to all governmental services through a common services delivery network including the CSC Scheme.

2. The CSC Scheme

2.1 The Guiding Principles

2.1.1 A Bottom-up Model: To deal with the limitations perceived first and foremost, the CSC is designed as a bottom-up model for delivery of content, services, information and knowledge, that can allow the participation of like-minded public and private enterprises - through a collaborative framework.
2.1.2 Social Inclusion: But beyond a delivery channel, the CSC will be a Change Agent that would provide a structured platform for socially inclusive community participation for collective action. Community participation and collective action, and not ICT alone, will lead to a behavior change for a sustainable socio-economic development and longterm rural prosperity.
2.1.3 Instruments for Change: The three important components of the CSC Schemes are therefore:
- A Public Private Partnership (PPP) Framework
- Rural Entrepreneurship and Market Mechanisms
- The Physical and Technology Infrastructure of the CSC

2.2 Key Stakeholders

Broadly, the CSC implementation framework is as follows:
2.2.1 At the first (CSC) level is the local Village Level Entrepreneur
(VLE- loosely analogous to a franchisee), to service the rural
consumer in a cluster of 5-6 villages.
2.2.2 At the second/middle level is an entity termed the Service Centre Agency (SCA – loosely analogous to a franchiser) to operate,manage and build the VLE network and business
2.2.3 At the third level is the agency designated by the State- the State Designated Agency (SDA) - to facilitate implementation of the Scheme within the State and to provide requisite policy, content and other support to the SCAs.The roles and responsibilities of the key stakeholders are highlighted below:
a. Service Centre Agency (SCA): The Prime Driver
The SCA is to be the prime driver of the whole CSC eco-system. The SCA will be selected and supported by the respective State Designated Agency (SDA) to implement the CSC Scheme in their specified areas of operations.This includes activities such as:
- Identifying, selecting and training the VLEs
- Establishing the CSC (either directly or through the VLE)
- Supplying, aggregating and updating contents
- Harnessing the State Wide Area Network
- Identifying the required applications and services
At the scale it is proposed, the CSC Scheme poses a variety of complex new issues in terms of financing, channel management, technology,integration with local community, etc. that may put the CSC network at risk, if not supported by a committed and financially strong SCA with adequate experience of working with rural communities. Consequently, the selection of the right SCA assumes significant importance for the State.
b. The Village Level Entrepreneur (VLE)
The VLE is the key to the success of the CSC operations. While content and services are important, it is the VLE’s entrepreneurial ability and acceptability in the society that would ensure CSC sustainability. A good VLE is expected to have some financial strength, entrepreneurial ability, strong social commitment as well as respect within the community. The quality of service at the CSCs would depend a great deal on the quality of VLEs. A VLE would need to:
- Market Services of CSCs
- Undertake Skill upgradation
- Undertake local level publicity
- Coordinate with local players
- Involve the local community to enable sustained viability
- Interact with local government functionaries
c. The State Government
The major roles to be undertaken at the State Government level are as follows:
- The State Government will set policy, regulatory and other relevant matters at the State level
- The State Government oversees the implementation of the CSC
Scheme at the State level including the process of selection of the
- Each State Government/Union Territory has identified a State
Designated Agency (SDA) and a Nodal Officer to provide all State
level support for smooth implementation of the CSC Scheme
- Whilst initiating the selection process for the SCAs through a bidding process, the State Governments are also taking appropriate decisions on the mode and degree of integration with the CSC Scheme, of the existing physical, digital and institutional infrastructure of various Government Agencies/ Departments in the State, such as Schools, Gram Panchayats, Public Health Centers (PHC), Post Offices (in consultation with GOI) etc.
- The State Governments are also deciding on the extent and modalities of integration with the CSC Scheme of existing Government schemes, particularly development programmes in areas like Education, Health,Agriculture, Employment, etc.
d. State Designated Agency (SDA)
The State Designated Agency notified by the State Government is normally a PSU/Society or any other agency controlled by the State Government.Essentially, the role of the SDA would primarily be to:
- Provide the necessary policy level support to the CSC Scheme on behalf of the State Government;
- Coordinate, manage and monitor the receipt and utilization of the financial support received from the State Government / Government of India
- Facilitate integration of the existing ICT enabled and other Government Schemes into the CSC Scheme
- Coordinate and facilitate interactions between the SCA and State
Government Departments, District Administration for enabling delivery of Government services through the CSCs, in an integrated manner
- Select and appoint the Service Center Agencies (SCA) under the guidance of the High Level Committee / Apex Committee and facilitate the training and capacity building of the SCA/VLE
- Monitor the rollout and implementation of the Scheme
e. The National Level Service Agency (NLSA)
Implementation of a mission-oriented project of this size, scope and
complexity poses significant challenges of project management at the national level as well as opportunities to achieve significant economies of scale in the identification, customisation and implementation of the content, services,physical and digital infrastructure required for the project. Further, some of the potential citizen-centric services lend themselves to aggregation at the national level.
To enable the state-specific implementation plans to benefit from such economies of scale, aggregation of best practices, etc., at the program level,the Department of IT, (DIT) Government of India has appointed Infrastructure Leasing & Financial Services (IL&FS), Mumbai as the NLSA of the CSC
Scheme through a bid process. The NLSA is currently assisting the DIT, the State Governments and the SCAs.The NLSA’s mandate is to provide support during the implementation and initial operation phase in the following areas:
i. Program Management: provide the right strategy, framework and guidance to all stakeholders for effectively managing the implementation of the CSC Scheme across the country
ii. Program Monitoring: monitor the implementation of the CSC Scheme to enable DIT to review its progress from time to time and to take appropriate timely corrective measures
iii. Enabling State roll-out: assist the State Government / SDA in various aspects relating to implementation of the CSC Scheme such as development of RFP, managing the bid process, finalizing the Master Service Level Agreement (MSA), etc
iv. SCA Support: assist the SCAs in structuring and developing business plans which would form the basis of financing the project and its implementation
v. Mobilize Resources: Based on the SCA business plans, the NLSA, if required, would help raise resources from lenders in the form of project finance, asset finance, stakeholder equity, term loans, suppliers’ credit, etc.
vi. Building Skills and Expertise in the CSC System: As a part of the human resource development process, the NLSA is to identify programs and agencies that can equip individual stakeholders with the understanding, skills and access to information, knowledge and training that enables them to perform their roles effectively

2.3 Technology and Connectivity

2.3.1 All CSCs would be broadband, internet-enabled, primarily through wireless connectivity. The CSC is to leverage the State Wide Area Network (SWAN) Scheme, wherever feasible for connectivity. An inter departmental Committee of the Department of Information Technology (DIT) and the Department of Telecom (DOT) has been set up to suggest the technology strategy to be adopted for ensuring last mile connectivity for the CSCs.
2.3.2 A detailed study has been undertaken to understand the technology challenges in terms of software, hardware and connectivity for the CSC Scheme. Discussions with the Telecom Service Providers (TSPs) have also been held to understand the investments needed to enable technology solutions for the CSCs. For last mile connectivity, while the SCAs are expected to arrange for CSC connectivity, the DIT has been working in close cooperation with the Department of Telecommunications (DoT) to ensure availability of broadband connectivity in rural areas.
2.3.3 The Empowered Committee, Government of India, approved
sanction of Rs 550 crores to BSNL for providing last mile
Broadband connectivity to 41,500 CSCs. Out of this amount, Rs 150 crore each is to be released under grants in aid by DIT and also
under ACA for the States in the financial year (2008-09). The ACA
share of each State under NEGP, may be released to the States, who in turn would remit the said amount to BSNL for provision of
connectivity for the CSCs in the respective States.
2.3.4 As requested by DIT, Broadband connectivity for CSCs would be provided and a special tariff structure for the purpose has been approved by the component authority in BSNL and has circulated to all the Chief General Managers of the various telecom circles and the Metro districts.
2.3.5 The Empowered Committee, Government of India has approved to provide VSAT connectivity through NIC to 2500 remote CSCs in North East and Jammu & Kashmir at a cost of Rs.49.88 crores.

2.4 Government Financial Support

2.4.1 The capital expenditure for setting up of the CSCs and other
infrastructure cost is to be borne by the SCA. No capital support
from the Government is envisaged for setting up the CSCs in the
State. In case, Government services (G2C) can cover a part of the
CSC cash flow requirements, a viable business model could be built
around private services (B2C). However, since G2C services may
take longer to be operational, the CSCs need to be de-risked from the associated risks to their sustainability, due to non-availability of
adequate G2C services. To overcome this problem, the scheme
envisages that the CSCs would be provided support in the form of a
“Guaranteed Provision of Revenue from Governmental Services”.
This support would be shared between the Central Government
(planned funding through DIT) and the State Government in equal
ratio. The State Government could meet their share of the revenue
support by either making a provision in their budget or by using the
Additional Central Assistance (ACA) for the NeGP (National e-
Governance Plan), provided by the Planning Commission.
2.4.2 As per Government approval, the total project cost is of Rs. 5742 Crore. The total minimum operating expenditure for four years for the 100,000 rural CSCs is estimated at Rs. 4759 Crores. The maximum Government support hence would be 33.33% of Rs. 4759 Crores, i.e., Rs 1586 Crores over a period of four years. However, the actual quantum of support would be determined through an appropriate bidding process at the State level. The actual support is likely to be less keeping in view the bids received so far.