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E-CHOUPALE-CHOUPAL An initiative of ITC

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ITC;-HISTORYITC;-HISTORY

ITC was incorporated on August 24, 1910 under the name ITC was incorporated on August 24, 1910 under the name Imperial Tobacco Company of India Limited.Imperial Tobacco Company of India Limited.

The name of the Company was changed The name of the Company was changed to India Tobacco to India Tobacco Company Limited in 1970Company Limited in 1970 and then to and then to I.T.C. Limited in I.T.C. Limited in 19741974..

after September 18, 2001, after September 18, 2001, The Company now stands The Company now stands rechristened 'rechristened 'ITC Limited

The Company's headquarter building, 'Virginia House', is in The Company's headquarter building, 'Virginia House', is in Kolkata.Kolkata.

At present ITC chairman is At present ITC chairman is Mr.Y.C.DEVESHWARMr.Y.C.DEVESHWAR SWOT Analysis ITCSWOT Analysis ITC :-ITC is one of India’s biggest and best- :-ITC is one of India’s biggest and best-

known private sector companiesknown private sector companies. .

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ABOUT: ITCABOUT: ITC

FMCG:- Cigarettes & :- Cigarettes & Cigars,Foods,Lifestyle,Retailing, Personal Cigars,Foods,Lifestyle,Retailing, Personal Care,Education & Care,Education & Stationery,SafetyMatches, AgarbattisStationery,SafetyMatches, Agarbattis

HotelsHotels

Paperboards & PackagingPaperboards & Packaging

Agri-Businesses:- Agri Commodities & Agri-Businesses:- Agri Commodities & Rural Services,Leaf Tobacco, Spices & Agri Rural Services,Leaf Tobacco, Spices & Agri Inputs: eChoupalInputs: eChoupal

InformationTechnologyInformationTechnology GroupCompanies GroupCompanies

PRODUCTS & SERVICES

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ITC's Agri Business Division (ITC-ABD) is engaged in the trading of a wide range of Agri Commodities and Aqua Foods.

It holds a principal position in a number of international markets is backed by sound technical expertise,

a strong proprietary knowledge of the Indian farming system and a competency to cater to customer specific requirements

ITC-ABD today has the enviable reputation of being the most reliable Indian supply chain partner for select global buyers of India's finest Agri and Aqua offerings.

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E-CHOUPAL: what is it?E-CHOUPAL: what is it?

It is a unique web based initiative of itc-abdIt is a unique web based initiative of itc-abd Offers the farmers all the information ,products & services to enhance Offers the farmers all the information ,products & services to enhance

farm productivityfarm productivity Improve farm gate prices,Improve farm gate prices, Cut transaction costsCut transaction costs Access to farmers about latest local and global information on Access to farmers about latest local and global information on

weather,scientific farming practice as well as market prices at the village weather,scientific farming practice as well as market prices at the village itselfitself

Enabled with web portal –in regional languagesEnabled with web portal –in regional languages Facilitate supply of high quality farm inputs as well as purchases of Facilitate supply of high quality farm inputs as well as purchases of

commodities at farmers door step.commodities at farmers door step.

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CONCEPTUALISED BY:-CONCEPTUALISED BY:-

He is the Chief Executive of the Agri Businesses Division of ITC He is the Chief Executive of the Agri Businesses Division of ITC Limited, India. This US$ 900 million division is engaged in sourcing Limited, India. This US$ 900 million division is engaged in sourcing a variety of agricultural products, commodity exports, rural a variety of agricultural products, commodity exports, rural marketing and specialty retailing.marketing and specialty retailing.

He has conceptualised the He has conceptualised the Mr. S. Sivakumar Mr. S. Sivakumar path-breaking e-path-breaking e-Choupal model and is spearheading its roll out across the country. Choupal model and is spearheading its roll out across the country. With a vision to cover 100,000 villages by 2012, ITC eChoupal aims With a vision to cover 100,000 villages by 2012, ITC eChoupal aims to increase incomes and improve the quality of life in rural India to increase incomes and improve the quality of life in rural India while delivering sustainable shareholder value while delivering sustainable shareholder value

Sivakumar is a Director on the Boards of NABARD, ITC Infotech Sivakumar is a Director on the Boards of NABARD, ITC Infotech India Ltd., India Ltd.,

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E-choupal: a big picture

ITC’s (ABD): one of India’s largest exporters of agricultural commodities, has conceived e-Choupal as a more efficient supply chain aimed at delivering value to its customers around the world on a sustainable basis.

The e-Choupal model has been specifically designed to tackle the challenges posed by the unique features of Indian agriculture, characterised by fragmented farms, weak infrastructure and the involvement of numerous intermediaries, among others

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The Status of ExecutionThe Status of Execution Launched in June 2000, Launched in June 2000,

'e-Choupal', has already become the 'e-Choupal', has already become the largest initiative among all Internet-largest initiative among all Internet-based interventions in rural India. based interventions in rural India.

e-Choupal' services today growing to e-Choupal' services today growing to a range of crops - soyabean, coffee, a range of crops - soyabean, coffee, wheat, rice, pulses, shrimp wheat, rice, pulses, shrimp

across ten states (Madhya Pradesh, across ten states (Madhya Pradesh, Haryana, Uttarakhand, Karnataka, Haryana, Uttarakhand, Karnataka, Andhra Pradesh, Uttar Pradesh, Andhra Pradesh, Uttar Pradesh, Rajasthan, Maharashtra, Kerela and Rajasthan, Maharashtra, Kerela and Tamil Nadu).Tamil Nadu).

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Why Why e-Chaupale-Chaupal??

e-Chaupale-Chaupal was conceived to tackle the challenges posed by the was conceived to tackle the challenges posed by the unique features of Indian Agriculture, characterized byunique features of Indian Agriculture, characterized by

fragmented farms,fragmented farms, weak infrastructure and the weak infrastructure and the involvement of numerous intermediaries. involvement of numerous intermediaries.

Traditionally, these commodities were procured in Traditionally, these commodities were procured in 'mandis''mandis' :- :- where the middleman used to make most of the profit. These where the middleman used to make most of the profit. These Middlemen used unscientific means to judge the quality of the Middlemen used unscientific means to judge the quality of the product to set the price.product to set the price.

Difference in price for good quality and inferior quality was less Difference in price for good quality and inferior quality was less and hence there was no incentive for the farmers to invest and and hence there was no incentive for the farmers to invest and produce good quality output. produce good quality output.

With With e-Chaupale-Chaupal, the farmers have a choice and the exploitative , the farmers have a choice and the exploitative power of the middleman is neutralized.power of the middleman is neutralized.

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Root Causes and Implications

ROOT CAUSES

FragmentationDispersionHeterogeneity

IMPLICATION

Weak Bargaining PowerNo access to real-timeinformationNeed for customized knowledge

WeakInfrastructure

CHALLENGE

Dependence on middlemen(exploitative cycle of dependency)

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CHALLENGES IN APPLICATIONCHALLENGES IN APPLICATION The problems encountered :The problems encountered :

infrastructural inadequacies,infrastructural inadequacies, power supply,power supply, telecom connectivity and bandwidth,telecom connectivity and bandwidth, challenge of imparting skills to the challenge of imparting skills to the

first time internet users in remote first time internet users in remote and inaccessible areas of rural India.and inaccessible areas of rural India.

Several alternative and innovative Several alternative and innovative solutions solutions

Power back-up through batteries Power back-up through batteries

charged by Solar panels,charged by Solar panels, upgrading BSNL exchanges with RNS upgrading BSNL exchanges with RNS

kits, installation of VSAT equipment,kits, installation of VSAT equipment,

Mobile Choupals, local caching of Mobile Choupals, local caching of static content on website to stream in static content on website to stream in the dynamic content more efficiently, the dynamic content more efficiently,

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The Model in ActionThe Model in Action ‘‘e-Choupal’ makes use of the physical transmission capabilities of e-Choupal’ makes use of the physical transmission capabilities of

current intermediaries – aggregation, logistics, counter-party risk current intermediaries – aggregation, logistics, counter-party risk and bridge financing –while disintermediating them from the chain and bridge financing –while disintermediating them from the chain of information flow and market signals.of information flow and market signals.

village internet kiosks managed by farmers – called village internet kiosks managed by farmers – called sanchalakssanchalaks – – themselves, enable the agricultural community access ready themselves, enable the agricultural community access ready information in their local language on the weather & market information in their local language on the weather & market prices, disseminate knowledge on scientific farm practices & risk prices, disseminate knowledge on scientific farm practices & risk management, facilitate the sale of farm inputs (now with management, facilitate the sale of farm inputs (now with embedded knowledge) and purchase farm produce from the embedded knowledge) and purchase farm produce from the farmers’ doorsteps (decision making is now information-based).farmers’ doorsteps (decision making is now information-based).

Real-time information and customised knowledge provided by ‘e-Real-time information and customised knowledge provided by ‘e-Choupal’ enhance the ability of farmers to take decisions and align Choupal’ enhance the ability of farmers to take decisions and align their farm output with market demand and secure quality & their farm output with market demand and secure quality & productivity. ‘e-Choupal’ eliminates wasteful intermediation and productivity. ‘e-Choupal’ eliminates wasteful intermediation and multiple handling. Thereby it significantly reduces transaction multiple handling. Thereby it significantly reduces transaction costs. costs.

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The Value Chain - Farm to Factory The Value Chain - Farm to Factory GateGate

e-Choupal’ also unshackles the potential of Indian farmer who e-Choupal’ also unshackles the potential of Indian farmer who has been trapped in a vicious cycle of low risk taking ability > has been trapped in a vicious cycle of low risk taking ability > low investment > low productivity > weak market orientation low investment > low productivity > weak market orientation > low value addition > low margin > low risk taking ability. > low value addition > low margin > low risk taking ability.

This made him and Indian agribusiness sector globally This made him and Indian agribusiness sector globally uncompetitive, despite rich & abundant natural resources.uncompetitive, despite rich & abundant natural resources.

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How does it work?How does it work?

• ITC Limited has now established computers ITC Limited has now established computers and Internet access in rural areas across and Internet access in rural areas across several agricultural regions of the country, several agricultural regions of the country, where the farmers can directly negotiate where the farmers can directly negotiate the sale of their produce with ITC Limited. the sale of their produce with ITC Limited. The PCs and Internet access at these The PCs and Internet access at these centers enable the farmers to obtain centers enable the farmers to obtain information on information on mandimandi prices, good farming prices, good farming practices and place orders for agricultural practices and place orders for agricultural inputs like seeds and fertilizers..inputs like seeds and fertilizers..

• Each ITC Limited kiosk having an access to Each ITC Limited kiosk having an access to Internet is run by a Internet is run by a SanchalakSanchalak-a trained -a trained farmer. The computer housed in the farmer. The computer housed in the sanchalak'ssanchalak's house is linked to the Internet house is linked to the Internet via phone lines or by a VSAT connection and via phone lines or by a VSAT connection and serves an average of 600 farmers in the serves an average of 600 farmers in the surrounding ten villages within about a 5 km surrounding ten villages within about a 5 km radius. radius.

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How is it useful to farmers?How is it useful to farmers? A local farmer acting as a coordinator or A local farmer acting as a coordinator or

'Sanchalak' runs this amenity ,e-choupal'Sanchalak' runs this amenity ,e-choupal He receives a small commission from farmers who He receives a small commission from farmers who

wish to use this facility.wish to use this facility.

Farmers use the computer to access daily closing Farmers use the computer to access daily closing prices of local mandis, international prices as well prices of local mandis, international prices as well as details about new farming techniques. as details about new farming techniques.

The computer at the e-Choupal may also be utilized The computer at the e-Choupal may also be utilized for ordering seed, fertilizers and other products for ordering seed, fertilizers and other products from ITC or its partners at discounted prices.from ITC or its partners at discounted prices.

During the harvest season, ITC proposes to buy the During the harvest season, ITC proposes to buy the crop directly from farmers at the previous day's crop directly from farmers at the previous day's closing price.closing price.

Each e-Choupal costs between US$3,000 and Each e-Choupal costs between US$3,000 and US$6,000 to set up and around US$100 annually for US$6,000 to set up and around US$100 annually for maintenance. They usually serve an average of 600 maintenance. They usually serve an average of 600 farmers within a five km radius. farmers within a five km radius.

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Development BenefitDevelopment Benefit The The e-Chaupale-Chaupal system gives farmers more control over their system gives farmers more control over their

choices,choices, a higher profit margin on their crops,a higher profit margin on their crops, and access to information that improves their productivity. and access to information that improves their productivity. provide more transparent process and empowering local provide more transparent process and empowering local

peoplepeople ITC increases trust and fairness. ITC increases trust and fairness. The increased efficiencies and potential for improving crop The increased efficiencies and potential for improving crop

quality quality making Indian agriculture more competitive. making Indian agriculture more competitive. Despite difficulties in electric power, infrastructure and Despite difficulties in electric power, infrastructure and

sometimes limit hours of use, the system also links farmers sometimes limit hours of use, the system also links farmers and their families to the world. and their families to the world.

Some Some sanchalaks sanchalaks track future prices on the national as well track future prices on the national as well as local as local mandimandi prices and prices and

village children have used the computers for schoolwork, village children have used the computers for schoolwork, games and to obtain and print out their academic test games and to obtain and print out their academic test results. results.

The result is a significant step toward rural development The result is a significant step toward rural development

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The principle of the e-The principle of the e-ChaupalChaupal The principle of the The principle of the e-Chaupale-Chaupal is to inform, is to inform,

empower and compete. At the same time ITC empower and compete. At the same time ITC Limited also has extracted value in four steps to Limited also has extracted value in four steps to make the model sustainable and scaleable:-make the model sustainable and scaleable:-

Elimination of non-value added activities Elimination of non-value added activities Differentiated product through identity preserved Differentiated product through identity preserved

supply chains supply chains Value added products traceable to farm practices Value added products traceable to farm practices e-market place for spot transactions and support e-market place for spot transactions and support

services to future exchange. services to future exchange.

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1 2 &3 of e-choupal1 2 &3 of e-choupal

• Version 1.0Version 1.0

The Start The Start IDEA: To give power of scale to small farmers by IDEA: To give power of scale to small farmers by aggregating them as sellers (of produce) and as buyers (of aggregating them as sellers (of produce) and as buyers (of farm inputs)farm inputs)

FARMERS’ GAIN: They get bargain and choice - the two key FARMERS’ GAIN: They get bargain and choice - the two key virtues of competitionvirtues of competition

ITC’S GAIN: Access to inputs for its agri business; offer the ITC’S GAIN: Access to inputs for its agri business; offer the use of network to other companiesuse of network to other companies

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1 2 &3 of e-choupal1 2 &3 of e-choupal contd…contd…

• Version 2.0Version 2.0 The Scale-up The Scale-up REACH: millions of farmers REACH: millions of farmers OFFERING: Network now offered five services:OFFERING: Network now offered five services:

• • Information: weather, price, etc.Information: weather, price, etc.• Knowledge: farming methods, soil testing, etc.• Knowledge: farming methods, soil testing, etc.• Purchase: Seed, fertiliser...to insurance• Purchase: Seed, fertiliser...to insurance• Sales: Farmers sell crops to ITC centres• Sales: Farmers sell crops to ITC centres• Other: Cattle care, water harvesting, women employment • Other: Cattle care, water harvesting, women employment etcetc

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1 2 &3 of e-choupal1 2 &3 of e-choupal contdcontd

• Version 3.0Version 3.0

The Deepening The Deepening NEW BUSINESSES: Add two new anchor NEW BUSINESSES: Add two new anchor businesses: businesses:

1) Rural jobs and employability and 1) Rural jobs and employability and 2) Personalised agri services. Plus strengthen existing 2) Personalised agri services. Plus strengthen existing

commodity sourcingcommodity sourcing MORE INTERACTION: Through Choupal Saagars and Haats MORE INTERACTION: Through Choupal Saagars and Haats

and via mobile phonesand via mobile phones NEW TECHNOLOGY: Use of especially enabled mobile NEW TECHNOLOGY: Use of especially enabled mobile

phones, in addition to PCs, for two-way interaction with phones, in addition to PCs, for two-way interaction with farmers; use of analytics; new partnersfarmers; use of analytics; new partners

The latest version also provides employment The latest version also provides employment opportunities to rural youths and has helped fill 1,200 job opportunities to rural youths and has helped fill 1,200 job openings from 52 companies.openings from 52 companies.

But Version 3 has gone beyond just helping rural India to But Version 3 has gone beyond just helping rural India to reduce its pressure on land.reduce its pressure on land.

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Version -3Version -3Under the new Under the new

version, ITC plans to version, ITC plans to address the address the sustainability angle of sustainability angle of the Indian agricultural the Indian agricultural sector by promoting sector by promoting the practice of the practice of green green farming.farming.

"The company is now "The company is now pushing farmers to pushing farmers to adopt organic farming adopt organic farming as well as reducing of as well as reducing of greenhouse gas greenhouse gas emissions,emissions,

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E-choupal:e-empowering indian E-choupal:e-empowering indian farmersfarmers

E-CHOUPALE-CHOUPAL NOWNOWSTATES COVEREDSTATES COVERED 1010VILLAGES COVEREDVILLAGES COVERED 4000040000NO OF E-CHOUPALNO OF E-CHOUPAL 65006500FARMERS FARMERS EMPOWEREDEMPOWERED

4 MILLION4 MILLION

e-Choupal leverages the Internet to empower small and marginal e-Choupal leverages the Internet to empower small and marginal farmers farmers

By providing them with farming knowledge, timely and relevant By providing them with farming knowledge, timely and relevant information, e-Choupal enabled economic capacity to proliferate at the information, e-Choupal enabled economic capacity to proliferate at the base of the rural economy base of the rural economy

Cited in the Government of India’s Economic Survey of 2006-07, Cited in the Government of India’s Economic Survey of 2006-07, for its transformational impact on rural livesfor its transformational impact on rural lives

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Nokia Partners with ITC e-Choupal Nokia Partners with ITC e-Choupal (Rural India):-(Rural India):-

As per the (MOU), Nokia and ITC will As per the (MOU), Nokia and ITC will collaborate to offer Nokia Life Tools to offer collaborate to offer Nokia Life Tools to offer updated information on the agriculture sectorupdated information on the agriculture sector

provides information on seeds, fertilizers, provides information on seeds, fertilizers, pesticides, market prices, and weather pesticides, market prices, and weather (temperature, rainfall, wind conditions) via (temperature, rainfall, wind conditions) via their mobile phones. their mobile phones.

aim to provide career and education aim to provide career and education services, including English language learning, services, including English language learning, General Knowledge, Exam preparations and General Knowledge, Exam preparations and results, as well as career information and results, as well as career information and tips.tips.

offers fun features, including astrology, news, offers fun features, including astrology, news, ringtones etc. ringtones etc.

NOKIA LIFE TOOLS

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farmer’s responsefarmer’s response As India’s ‘kissan’ Company, ITC has taken care to involve farmers in the As India’s ‘kissan’ Company, ITC has taken care to involve farmers in the

designing and management of the entire ‘e-Choupal’ initiative.designing and management of the entire ‘e-Choupal’ initiative.

The active participation of farmers make the ‘e-Choupal’ as the new age The active participation of farmers make the ‘e-Choupal’ as the new age cooperative for all practical purposes.cooperative for all practical purposes.

This enthusiastic response from farmers has encouraged ITC to plan for the This enthusiastic response from farmers has encouraged ITC to plan for the extension of the ‘e-Choupal’ initiative to altogether 15 states across India extension of the ‘e-Choupal’ initiative to altogether 15 states across India over the next few years.over the next few years.

On the anvil are plans to channelise other services related to micro-credit, On the anvil are plans to channelise other services related to micro-credit, health and education through the same 'e-Choupal' infrastructure.health and education through the same 'e-Choupal' infrastructure.

Another path-breaking initiative – the ‘Another path-breaking initiative – the ‘Choupal Pradarshan KhetChoupal Pradarshan Khet’, brings ’, brings the benefits of agricultural best practices to small and marginal farmersthe benefits of agricultural best practices to small and marginal farmers

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Envisioning a larger societal purpose has Envisioning a larger societal purpose has always been a hallmark of ITC. The always been a hallmark of ITC. The company sees no conflict between the company sees no conflict between the twin goals of shareholder value twin goals of shareholder value enhancement and societal value enhancement and societal value creation. The challenge lies in fashioning creation. The challenge lies in fashioning a corporate strategy that enables a corporate strategy that enables realisation of these goals in a mutually realisation of these goals in a mutually reinforcing and synergistic manner. reinforcing and synergistic manner.

As a corporate citizen with enduring As a corporate citizen with enduring relationships in rural India, ITC has a relationships in rural India, ITC has a history of collaboration with communities history of collaboration with communities and government institutions to enhance and government institutions to enhance farm productivity and the rural resource farm productivity and the rural resource base. ITC’s commitments in agricultural base. ITC’s commitments in agricultural R&D and knowledge sharing have R&D and knowledge sharing have spanned vital aspects of competitiveness spanned vital aspects of competitiveness – efficient farm practices, soil and water – efficient farm practices, soil and water management. management.

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AWARDS TO ITC:E-CHOUPALAWARDS TO ITC:E-CHOUPAL

The The Development Gateway Award:2005Development Gateway Award:2005 ITC is the ITC is the first Indian companyfirst Indian company and the and the second in the worldsecond in the world to win this prestigious award. to win this prestigious award.

The The 'Golden Peacock Global Award for Corporate Social 'Golden Peacock Global Award for Corporate Social Responsibility (CSR) in Emerging Economies :2005'Responsibility (CSR) in Emerging Economies :2005'. .

United Nations Industrial Development Organisation United Nations Industrial Development Organisation (UNIDO)Award:(UNIDO)Award: 20082008

The The Ashoka - Changemakers ‘Health For All’Ashoka - Changemakers ‘Health For All’ Award :2006 Award :2006 Innovation for India Award: 2006 Innovation for India Award: 2006 The Corporate Social Responsibility Award :2004The Corporate Social Responsibility Award :2004 from from The Energy and Resources Institute(TERI)The Energy and Resources Institute(TERI)

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e-Choupal: VisionYEAR:2005Kiosks: 5000Villages: 30,000Farmers: 3.5 million

YEAR:2010Kiosks: 15000+Villages:100,000Farmers:10million

There are 6,500 There are 6,500 e-Chaupalse-Chaupals today. ITC Limited plans to scale up today. ITC Limited plans to scale up to 20,000 to 20,000 e-Chaupals e-Chaupals by 2012 covering 100,000 villages in 15 by 2012 covering 100,000 villages in 15 states, servicing 15 million farmersstates, servicing 15 million farmers

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Choupal mahotsavChoupal mahotsav

ITC e-Choupal and Impact Communications launched Choupal ITC e-Choupal and Impact Communications launched Choupal Mahotsav, New Delhi, March 16, 2010Mahotsav, New Delhi, March 16, 2010

ITC e-Choupal, in association with Delhi based rural marketing ITC e-Choupal, in association with Delhi based rural marketing agency Impact Communications, launched Choupal Mahotsav, a agency Impact Communications, launched Choupal Mahotsav, a rural marketing initiative, in Uttar Pradesh.rural marketing initiative, in Uttar Pradesh.

It was held in 24 choupal saagars in u.pIt was held in 24 choupal saagars in u.p

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THANK YOUTHANK YOU

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Sources:-Sources:-www.echoupal.comwww.echoupal.comwww.marginalrevolution.comwww.marginalrevolution.comwww.govtech.comwww.govtech.comwwww.itc.comww.itc.com

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Presented by:-Presented by:-

Sachin guptaSachin guptasaching422@gmail.comsaching422@gmail.com

INDIAINDIA