VZCZCXRO9435
PP RUEHBI RUEHCI RUEHLH RUEHPW
DE RUEHCI #0211/01 1381237
ZNR UUUUU ZZH
P R 181237Z MAY 06
FM AMCONSUL CALCUTTA
TO RUEHC/SECSTATE WASHDC PRIORITY 0945
INFO RUEHC/USAID WASHDC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEHRC/DEPT OF AGRICULTURE WASHINGTON DC
RUEHNE/AMEMBASSY NEW DELHI 0862
RUEHCG/AMCONSUL CHENNAI 0332
RUEHBI/AMCONSUL MUMBAI 0332
RUEHKA/AMEMBASSY DHAKA 0197
RUEHGO/AMEMBASSY RANGOON 0123
RUEHIL/AMEMBASSY ISLAMABAD 0147
RUEHKP/AMCONSUL KARACHI 0084
RUEHLH/AMCONSUL LAHORE 0084
RUEHPW/AMCONSUL PESHAWAR 0061
RUEHBUL/AMEMBASSY KABUL 0022
RHMFIUU/CDR USPACOM HONOLULU HI
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUEHCI/AMCONSUL CALCUTTA 1152

UNCLAS SECTION 01 OF 02 CALCUTTA 000211 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ECON EAID EINV SOCI PHUM IN
SUBJECT: U.S. CORPORATIONS BEGIN EAST INDIA'S RURAL CONNECTIVITY 
INITIATIVE 
 
 
¶1. (SBU) SUMMARY:  To bridge the digital divide between the 
India's high-tech urban centers and its vast rural hinterland, 
Microsoft Corporation (Microsoft) is working with the GOI and 
state governments to establish Internet Technology (IT) 
connectivity in 100,000 villages around the country.  Pilot and 
developed programs from this project are already being initiated 
in parts of East and North East India.  Microsoft is also 
working with other U.S. corporations such as Intel, Dupont, 
United Telecom and Hughes Telecom to supply hardware and 
software.  As part of its eGovernance plan, the GOI hopes that a 
wired rural India will lead to better citizen services and more 
employment opportunities.  Microsoft considers this effort a 
good business model for bringing about rural connectivity as 
well as providing critical public services in underdeveloped 
parts of India.  Microsoft India Vice President Tarun Malik and 
Project Manager Vineet Garg emphasized that this program is 
intended to be self-sustaining and commercially viable.  The 
company stressed that this  is not part of a Corporate Social 
Responsibility (CSR) program as CSR initiatives can cripple the 
self-sufficiency of the recipients if not managed properly. 
This effort to bring IT connectivity in East and Northeast India 
appears to be well coordinated and looks to offer great 
potential for improving local government services and for 
enhancing rural IT connectivity.  End Summary. 
 
¶2. (U) These kiosks will be run by local youths through a 
public-private-partnership (PPP) model.  The public sector will 
provide the basic infrastructure and some aid for a limited 
period, which will then be made sustainable through the private 
initiatives of the local youths.  The state governments and GOI 
believe that the PPP arrangement will make these kiosks viable 
and promote village level entrepreneurship and employment. 
These kiosks will be in place by the end of 2007.  Microsoft is 
funding 50,000 kiosks under an initiative called Saksham 
(meaning `able') and is working with other U.S. companies, like 
Intel, Dupont, United Telecom and Hughes Telecom to provide all 
the information technology software and hardware components as 
well as develop network links for such kiosks.  The CSC project 
is a part of India's National eGovernance Plan, which featured 
in UPA's Common Minimum Program to bring information and 
government services at the doorstep of rural citizens. 
 
¶3. (U) The CSC scheme will have 3-tiers.  At the bottom of the 
pyramid will be the local Village Entrepreneurs or VLEs - 
loosely similar to a franchisee.  At the second level will be 
the Service Center Agencies (SCA) that acts more like a 
franchiser.  At the top level would be State Level Agency (SLA) 
to be selected by the state government to implement and monitor 
the scheme within the state. 
 
¶4. (SBU) Microsoft is collaborating with DIT as the lead agency 
in the project.  In their interaction with ConGen, Microsoft 
officials were unwilling to disclose the full value of 
investment but indicated that it was part of the USD 400 million 
digital inclusion program announced by Microsoft Chairman and 
Chief Software Architect Bill Gates during his several visits in 
India.  A number of U.S. companies like Intel, AMD, Dupont, 
United Telecom and Hughes Telecom are also stakeholders and 
investors in the project. 
 
--------------------------------------------- --------------- 
Already Implementing in East and Northeast India 
--------------------------------------------- --------------- 
 
¶5.  (SBU) A pilot project to set up five kiosks is now being 
implemented in two West Bengal districts.  In Hooghly district, 
work has begun to integrate land records with GIS mapping and 
using biometric features (thumb impression).  Microsoft is 
expected to announce shortly its plan to develop an additional 
5,000-6,000 kiosks in West Bengal. 
 
¶6.  (SBU) The CSC has already been implemented in Assam and also 
in some parts of North East.  Microsoft has built 350 kiosks in 
the North East, where they are called Community Information 
Centres (CIC).  While power and connectivity remain problems, 
some of the kiosks are reportedly functioning well.  Microsoft 
 
CALCUTTA 00000211  002 OF 002 
 
 
will also build 8,000 kiosks in Orissa.  In Bihar, the project 
is still at the proposal stage, although Microsoft has funded 
1,000 Education Centers as part of computer literacy Project 
Shiksha (meaning "learning").  ConGen contacts in Microsoft 
pointed out that the CSC project was financially viable and 
sustainable as the stakeholding corporations are driven not by 
corporate social responsibility but by the project's commercial 
prospects. 
 
¶7.  (U) COMMENT:  If the rural CSC program is fully implemented 
as envisioned, it will bridge the information gap between 
digitally disenfranchised rural communities and the more tech 
accessible urban areas.  The program will also bridge the gap 
between rural consumers, the  government and corporate service 
providers.   The franchise-like framework envisioned should 
provide a commercially viable and sustainable approach by 
creating financial incentives to the operators.  In addition, it 
will create potential employment for high unemployment areas 
that would benefit the most from such initiatives.  East and 
Northeast India have been slow to see the fruits of India's IT 
development and given the weak infrastructure and high poverty 
levels, the states in this region have often been ignored by 
private and public organizations.  The efforts of Microsoft and 
its partners to implement the CSC program reflects the 
realization that more needs to be done to address social and 
economic development in this region. 
JARDINE