Sanjay Nandrajog
Tapan is a middle aged resident of Bhogpur village in District Purba Medinipur, 75 kms from Kolkata, involved in his traditional family business of farming. For several years he had been visiting his nearest bank branch for withdrawing or depositing money traveling over fifteen kms, which would consume nearly half his working day; similarly, to make his electricity bill payment, he would need to go every month to the nearest collection centre which was again time consuming. However, things have changed rapidly in the recent past with a new Digitalized Common Service Kendra opening up in his neighbourhood where not only are his banking and bill payment needs getting conveniently fulfilled but he can also now get top-ups for his mobile & DTH, book rail tickets and get online motor insurance for his two wheeler – all digitally and literally at his doorstep!

This is the new rural reality!! Let's explore this further to see how Technology & Digitization is slowly but surely empowering and transforming rural India.

We are well aware that the Indian economy is predominantly rural with over two thirds of its population and workforce residing in rural areas. Rural India contributes a substantial part of the Total Net Value added in many sectors with an overall 46% contribution to our national income. With a population of 833 mn people (which incidentally is larger than rural China) residing in 640,867 villages, it is projected that by 2050 more than half of India's population will still be rural despite rising urbanization. Thus the growth and development of the rural economy is imperative for the inclusive development and overall growth of the country.

With increasing contribution to development and exposure to needs, the buying capacity of rural Indians has taken a sharp upward turn. However, Consumers in Rural India behave quite differently from the urban consumers. They have a strong value-for-money orientation, significant local cultural affinity, and a more conservative financial outlook. They may have high purchasing aspirations but are often constrained by easy availability. So how can access and availability of more and more services & products be made available to meet the rising aspirations of the underserved and unreached rural Indian…through Digitization and Technology!

Indeed, Digital connectivity has become a basic amenity today.

This is being driven strongly through Government's 'Digital India' programme which aims to transform India into a connected knowledge economy by providing a digital platform for governance, financial inclusion, educational & healthcare services. One of the key enablers is the growing Internet penetration which is expected to grow from 25% in 2016 to 55% by 2025. Importantly, the rural users are embracing the digital revolution very rapidly and are increasingly aware of the products & services that are available to their urban counterparts thanks to Satellite TV, spread of wireless networks, cheaper data, proliferation of smartphones and mobile internet as well as mobile marketing through social media. Thus, Rural India is expected to leapfrog Urban India and constitute nearly half of all Indian internet users by 2020!

So, what are the typical daily and ongoing needs of a rural consumer that can be easily delivered through digitisation and technology?

Impact of Digitisation
How can these services be made available at the door steps of the rural consumer?

Over ten years ago, Govt. of India, through its flagship National e-Governance plan envisaged to empower rural citizens by making available various government services to them via electronic media and created access points i.e. Common Service Centres run by Village Level Entrepreneurs (VLEs) at the village & Gram Panchayat level. These 'brick and click' centres act as One Stop Digital outlets providing both Govt. and business services to rural citizens. Keeping in mind the evolving needs of the rural citizens, the service portfolio available at these Common Service Centres has gradually expanded beyond government services to banking, financial services, mobile top-ups, electricity payments, rail bookings, e-Learning and e-Commerce. One of the prominent players in this space ie Sahaj e-Village Limited (a SREI Initiative) today has over 75,000 Sahaj Kendras covering 250,000 villages and a rural population of over 400 mn spread over 21 states.

Financial Inclusion is an important priority of the Government. Only 38% of the 117,200 branches of scheduled commercial banks are working in rural areas and only a meagre 40% of the households have bank accounts. Thus India is home to 19% of the world's unbanked population. This gap at the last mile is being filled up by the banks through a combination of Finance & Technology enabled by the Business Correspondent Agents at these Kendras where customers can open accounts and do normal banking transactions. To further enable mass transactions, AePS (Aadhaar enabled Payment System) has been launched wherein rural citizens can perform simple banking transactions like deposit and withdrawal through their biometric ID and Aadhaar number at any of the AePS Kendra – which acts almost like a Human ATM – and which would be soon available in every village in rural India.

Adoption of Financial services like Life Insurance, Motor Insurance & Health Insurance by rural consumers is quite a challenge considering their difficulty in understanding the need and importance of such an insurance cover; importantly, it is a time consuming task and Insurance companies have always found selling in rural markets a challenge. However, with Technology and the processes becoming online and easier, the Common Service Kendra network has played an important role in furthering the adoption of financial services.

Digital payment is another basic need for all rural citizens – whether for mobile phones, DTH or electricity bills. With digital options being made available at their doorstep through the Common Service Kendra, the villagers are being able to do top-ups or pay bills at the click of a button. Besides, with growing awareness of e-commerce, the rural consumers are seeking more online shopping options currently available only to their urban counterparts through Flipkart, Amazon etc. Sahaj Online Bazaar, for example, offers rural specific products at extremely competitive prices with a wide range and reasonable delivery times.

Digitisation is opening up new opportunities for education as well – through eLearning. In rural India pursuing a basic Computer course, which hitherto was still a dream for many, is being made available through the Sahaj e-Shiksha program made available in the Service Kendra. This is augmented by large scale initiatives like the 'Internet Saathi' program, which is part of Google's 'Helping Women Get Online' to educate the local community women.

This is only the beginning of a new wave that is slowly impacting the bottom of the pyramid in several ways thanks to Digitisation. While on the one hand, demonetisation paved the path for a quicker adoption of digital payments, on the other hand there are several start-ups with exciting solutions in digital learning & tele-medicine knocking on the doors of the rural consumer. Equally the Government is continuing to digitise more services to empower rural citizens while the Industry is recognising the rising potential of the rural consumer!

Finally, this rural awakening is also creating fresh opportunities for rural entrepreneurship wherein the rural youth are increasingly engaging in providing such digital services to their brethren as also ensuring a quicker adoption of such services at the bottom of the pyramid.

Welcome to the new Rural Reality!

“It's the combination of the Internet, microfinance and wireless communication technology that's transforming the poorest of the poor into an emerging market force. Acting alone, each of these three forces has enormous potential. But acting together, amplified by exponentially growing technologies, the once unimaginable becomes the now actually possible.”
- Peter H. Dimandis, Singularity University
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