CHAPTER - 10

INTERNET AND E-COMMERCE

INTRODUCTION

The Internet has revolutionized the computer and communications world like nothing before.
The invention of the telegraph, telephone, radio, and computer set the stage for this
unprecedented integration of capabilities. The Internet is at once a world-wide broadcasting
capability, a mechanism for information dissemination, and a medium for collaboration and
interaction between individuals and their computers without regard for geographic location.

The Internet represents one of the most successful examples of the benefits of sustained
investment and commitment to research and development of information infrastructure.
Beginning with the early research in packet switching, the government, industry and academia
have been partners in evolving and deploying this exciting new technology. Today, terms like
"pkgarg@yahoo.com" and "http://www.hotmail.com" trip lightly off the tongue of the random
person on the street. We shall be discussing about Internet, its services, utility and applications.

OBJECTIVE

At the end of this chapter, you would be able to understand:

• What is Internet
• Characteristics of Internet.
• Various services on the Internet
• Internet Communication Services
• Information Retrieval Services
• World Wide Web (WWW)
• Web Browsers
• Search Engines, Filters and Intranet
• Understand E-commerce and types of E-commerce
• Identify the requirements of E-commerce
• Appreciate E-commerce revolution in India
• Identify the costs and benefits of E-commerce
• Understand the Issues and challenges of E-commerce
• Understand the concept of E-governance
• Challenges and issues in E-governance
• Describe the priority areas for E-governance initiatives

WHAT IS INTERNET?

The Internet, which is also known as Net is the largest computer network in the world where
network is basically a set of computers hooked together to share the information. To be very
precise, the Internet is not really a network but network of networks sharing information freely.
However, the size and topology of network varies according to user’s setup. These networks
connected by high speed or dial-up exchange information by using same standard and
protocols. It is the transport vehicle for the information stored in files or documents on another
computer placed anywhere in the world. It is always misconception to say that the said

1
document found on Internet as Internet does not contain any information or document by itself
and therefore it is appropriate to say that the said document was found using internet.

The Internet was conceived in 1960s as an experiment by the U.S. Department of Defense. It
developed a system of connected computers in which the individual computers of the network
did not depend wholly of the main central computer and could communicated with each other
without the help of central computer. Therefore, if the central computer is destroyed,
communication can continue. Since that time, the Internet has grown exponentially in the global
network. In process, we may use one of the following services mentioned in the following pages.

Internet 2 has evolved in 1996 due to the limitation of transmission speed of information over
the Internet. This network i.e. Internet 2 is capable of transmitting gigabits of information per
second.

CHARACTERISTICS OF INTERNET

The Internet is unlike all the other communications media we have ever encountered. People of all
ages, colors, creeds, and countries freely share ideas, stories, data, opinions and products. The
major characteristics of Internet are:

• Open – Internet is unregulated and is available to everybody irrespective of the caste,

creed, age, etc.
• Untrusted – Since Internet is open, anybody can put any information on it. This makes
the contents unreliable or unauthenticated.
• Global – Internet has a global reach and is operative 24 hours a day, 365 days in a year.
• Inexpensive – Access to Internet is relatively cheap as compared to other corresponding
technologies.

One great thing about the Internet is that it's probably the most open network in the world.
Thousands of computers provide facilities that are available to anyone who has Net access. This
situation is unusual - as most networks are very restrictive in what they allow users to do and require
specific arrangements and passwords for each service. Although pay services exist (and more are
added every day), many Internet services are free for the taking. If you don't already have access to
the Internet through your company or your school, you probably have to pay for its access to one of
the Internet access providers.

Another great thing about the Internet is that it is what one might call "socially un-stratified." That is,
one computer is no better than any other, and no person is any better than any other. Who you are
on the Internet depends solely on how you present yourself through your keyboard. If what you say
makes you sound like an intelligent, interesting person, that's who you are. It doesn't matter how old
you are or what you look like or whether you're a student, a business executive, or a construction
worker. Physical disabilities don't matter - we correspond with people who are blind or deaf. If they
hadn't felt like telling us, we never would have known.

THE NET ADVANTAGE

More and more people are turning to the Net for information before they pick up the phone or go to
the library. Some of the things people use the Internet for are:

2
Finding people: If you have lost track of your childhood friend, now's your chance to find him or her
anywhere in the country. You can use one of the directory services to search the phone books of
the entire country.

Finding businesses, products, and services: New Yellow Page directory services enable you to
search by the type of company you're looking for. You can indicate area code or PIN code to help
specify the location. People are shopping for that hard-to-find special gift item.
Research: Law firms are finding that a great deal of information they formerly paid to find from
commercial services can be found for close to nothing when they go directly to the Net. Real estate
appraisers use demographic data available on the Net, including unemployment statistics, to help
assess property values. Genetics researchers and other scientists download up-to-date research
results from around the world. Businesses and potential businesses research their competition
over the Net.

Education: Schoolteachers coordinate projects with classrooms all over the globe. College students
and their families exchange e-mail to facilitate letter writing and keep the cost of phone calls down.
Students do research from their home computer. The latest encyclopedias are online.

Travel: Cities, towns, states, and countries are using the Web to put up tourist and event
information. Travelers find weather information, maps, transportation schedules, and museum
hours online.

Marketing and sales: Software companies are selling software and providing updates via the Net.
Companies are selling products over the Net. Online bookstores and music stores allow people to
browse online, choose titles, and pay for stuff over the Net.

Love: People are finding romance on the Net. Singles ads and matchmaking sites vie for users.

Healing: Patients and doctors keep up-to-date with the latest medical findings, share treatment
experience, and give one another support around medical problems.

Investing: People buy stock and invest money. Some companies are online and trade their own
shares. Investors are finding new ventures, and new ventures are finding capital.

Organizing events: Conference and trade-show organizers are finding that the best way to disseminate
information, call for papers, and do registration is to do it on the Web. Information can be updated regu-
larly, and paper and shipping costs are dramatically reduced. Registering online saves on-site registration
staff and on-site registration lines.

Nonprofit: Temples, Gurudwara, Churches and other community organizations put up pages telling
about themselves and inviting new people.

SERVICES PROVIDED BY INTERNET

When people talk about the Internet today, they are usually talking about what they can do on it.
The Internet’s capabilities are so expansive that we do not have sufficient room to mention the
complete list here. However, they can be classified into three broad categories namely:

• Communication Services
• Information Retrieval Services and

3
 • World Wide Web

Communications Services available over the Internet are giving greater scope of data access
amongst individuals and institutions. The commonly used communication services are:

E-Mail (Electronic Mail)

The desire to communicate is the essence of networking. People have always wanted to
correspond with each other in the fastest way possible, short of normal conversation. Electronic
mail (or email) is the most prevalent application of this in computer networking. It allows people
to write back and forth without having to spend much time worrying about how the message
actually gets delivered. As technology grows closer and closer to being a common part of daily
life, the need to understand the many ways it can be utilized and how it works, at least to some
level, is vital.

Email Addresses

Electronic mail is hinged around the concept of an address; the section on Networking Basics
made some reference to it while introducing domains. Your email address provides all of the
information required to get a message to you from anywhere in the world. An address doesn't
necessarily have to go to a human being. Cases are the exception to the norm---human beings
read mail to most addresses.

Email addresses usually appear in one of two forms---using the Internet format which contains
@, an ``at''-sign, or using the UUCP format which contains !, an exclamation point, also called a
``bang.'' The latter of the two, UUCP ``bang'' paths, is more restrictive, yet it more clearly
dictates how the mail will travel.

To reach Sanjay Jain on the system south.america.org, one would address the mail as
jain@south.america.org. But if Jain's account was on a UUCP site named brazil, then his
address would be brazil!jain. If it's possible (and one exists), try to use the Internet form of an
address; bang paths can fail if an intermediate site in the path happens to be down. There is a
growing trend for UUCP sites to register Internet domain names, to help alleviate the problem of
path failures.

Another symbol that enters the fray is %--it acts as an extra ``routing'' method. For example, if
the UUCP site dream is connected to south.america.org, but doesn't have an Internet domain
name of its own, a user pkg on dream can be reached by writing to the address

pkg%dream@south.america.org

This form is significant. This address says that the local system should first send the mail to
south.america.org. There the address pkg%dream will turn into pkg@dream, which will
hopefully be a valid address. Then south.america.org will handle getting the mail to the host
dream, where it will be delivered locally to pkg.

Domain Name System & Server

The Domain Name System (DNS) is a method by which all the separate and diverse computers
and networks linked to the Internet are "addressed". Every time you connect to a computer over
the Internet or send e-mail to a colleague, you will be making use of the DNS like:

4
vsnl.com, iiml.ac and microsoft.com.

As you know that a computer does not understand English and therefore the computer cannot
understand addresses written in English, as above. Each server connected to the Internet
therefore has a numerical Internet Protocol (IP) address. For the server del2.vsnl.net.in, the IP
address is 202.54.1.30. The domain name system makes it possible for us to think in terms of
names in English, whereas, computers think in terms of numeric IP addresses. A computer that
keeps track of all the English names and their numeric IP addresses is called the domain name
server. Whenever, we send an e-mail to a computer at other end of the globe, the domain name
server translates the address in English into the numeric IP address necessary to make the
connection.

IP Addresses

Every host computer connected to the Internet has an address similar to the one above, which
is unique and used by computer in communication. Since, human beings can remember names
better than numbers, therefore besides the numeric IP addresses, the computers are also given
English like names (known as domain names), such as: del2.vsnl.net.in. This permits to use
English like addresses by human beings while the computers can use IP addresses. The two
names must be linked or cross-referenced and DNS takes care of this cross-referencing.

When you specify an e-mail or IP address using the "English" domain name, your ISP's
computer will first access a database, known as a DNS nameserver which contains both the
English and numerical addresses of all computers connected to the Internet. If it finds the
domain name you specify, it will lookup the corresponding numerical address and use that to
carry out the requested function. The DNS also imposes a uniform naming system on to an
otherwise chaotic network of networks. To allow the diverse computer networks that make up
the Internet to act cohesively, they must all recognize each other's existence and be able to
pass information between each other without any confusion as to where the information is
going. For this reason, every machine on the Internet must have a unique address.

Domain name tell you the name of the organization that runs a given e-mail site and what kind
of site it is and the country it's located in. Large organizations may have more than one
computer or gateway tied to the Internet, so you will often see a two-part domain names; and
sometimes even three- or four-part domain names. For example, a domain name is
del2.vsnl.net.in. In this name, each portion of the domain name is called a domain. The domains
are del2, vsnl, net and in.

Top level domains: In a domain name vsnl.net.in, the top-level domains are net and in. The two
letter top-level domain is a country code, e.g., ‘in’ stands for India. If an Internet address does
not have a two-letter country code, then the site is in U.S.A.

Several top-level domains are listed below:

Name Description
com/co Companies or Commercial Organisation
edu/ac Educational or Academic Institutions
org Non Profit Private Organisation
net Network usually connected to Internet via Gateway

5
gov Non-military government institutions
mil Military government institution
int International organisation

As the Internet grew across the globe, new top-level domains are reserved for every country. A
two-letter abbreviation became a standard for every country in the world. For example,

at Austria
au Australia
ca Canada
ch Switzerland
de Germany
fi Finland
fr France
in India
my Malaysia
nl Netherland
uk United Kingdom

In India, top-level domains are maintained by National Center for Software Technology (NCST),
as they were the first Internet nodes in India. The domains under ‘in’ are net, ernet and co.

Subdomains or second-level domains: Top-level domains have second level domain that are
called as subdomains. Second-level domain names are usually assigned to entire
organizations. For example, vsnl.net.in is a second-level domain. We can easily make out that
vsnl.net.in is a computer in the India; it is a network connected to Internet via a gateway and it
belongs to an institution called vsnl (VSNL).

An Internet user will never deal with a DNS nameserver or worry about how domain names and
IP addresses are assigned, but it is very useful to know that the naming conventions exist for a
reason.

Internet Addresses

While using the World Wide Web, the users can move from one page to another page using the
hyperlinks. These pages may be either on the same web site or some other site. The hyperlinks
contains reference to the web site. Another way of going directly to a web site is by typing its
address or its Uniform Resource Locator (URL). You must have seen the research articles or
other reference materials refer to the URLs. Each page on the web has its unique URL. Some
examples of URLs are: www.mail.yahoo.com, www.cbseresults.nic.in, www.msn.com

Interpreting e-mail addresses

As the post office needs your house address containing house number, locality, city, district and
pin code to deliver mail in a reasonable time to a right place, an e-mail address has some
information about the country, organization, etc. Internet e-mail addresses usually look like this:

userid@domain.name.country, e.g. pkgarg@yahoo.com , utinzo@vsnl.com

6
It is to be seen that above address is all in lower case. There are few exceptions. The best way
to read e-mail addresses is from right to left. As with IP addresses, the segments of the domain
name are separated by periods ("."). The part of the e-mail address to the right of the @ is
called the domain name. This is simply the name of the machine on which the user has an
account. These details (vsnl.com) are sufficient to let any computer connected to the Internet
find a particular computer. The part to the left of @ is called the userid. This is the user's
account name. Normally it is derived from their actual or user selected name. In the example,
userid is pkgarg or utinzo.

Usenet News

Usenet is the set of machines that exchange articles tagged with one or more universally
recognized labels, called newsgroups (or ``groups'' for short). Usenet encompasses government
agencies, large universities, high schools, businesses of all sizes, home computers of all
descriptions, etc. Every administrator controls his own site. No one has any real control over
any site but his own. The administrator gets his power from the owner of the system he
administers. As long as the owner is happy with the job the administrator is doing, he can do
whatever he pleases, up to and including cutting off Usenet entirely.

Usenet allows creating groups of like-minded users. Nevertheless, currently the most popular
way to create a new newsgroup involves a ``vote'' to determine popular support for (and
opposition to) a proposed newsgroup. Some newsgroups insist that the discussion remain
focused and on-target; to serve their need thereby giving rise to moderated groups. All articles
posted to a moderated group get mailed to the group's moderator. He or she periodically
reviews the posts and then either posts them individually to Usenet, or posts a composite digest
of the articles for the past day or two.

Telnet (Remote Computing)

Telnet is the main Internet protocol for creating a connection with a remote machine. It gives the
user the opportunity to be on one computer system and do work on another, which may be
across the street or thousands of miles away. The actual command for negotiating a Telnet
connection varies from system to system. The most common is Telnet itself. For example:

telnet somewhere.domain

To open the connection, type: telnet your.system.name

For example, if the system name is uti.co.in, , the command would look like
telnet uti.co.in

The system will respond with something similar to:

Trying 128.30.10.1...
Connected to uti.co.in.
Escape character is '^]'.

The escape character, in this example ^] (Control-]), is the character that will let you go back to
the local system to close the connection, suspend it, etc. To close this connection, the user
would type ^], and respond to the telnet> prompt with the command close.

7
Many telnet clients also include a third option, the port on which the connection should take
place. Normally, port 23 is the default telnet port; the user never has to think about it. But
sometimes it's desirable to telnet to a different port on a system, where there may be a service
available, or to aid in debugging a problem. For example:

telnet somewhere.domain port

will connect the user to the given port on the system somewhere.domain. Many libraries use this
port method to offer their facilities to the general Internet community.

Internet Telephony

Internet telephony also referred to as Voice over the Net (VON) is one in which the principal
transmission network is the Internet. Internet Telephony enables a user to talk over Internet to
any personal computer equipped with the attachments to receive or transmit the voice call
around the world for a normal Internet connection price. It could be PC-to-PC or PC-to-Phone or
Phone-to-Phone. In the last application, local dial-up numbers are used to route long distance
calls over a packed-switched backbone network.

Games and Chat

Internet provides a facility to play computer games, download games and other entertainment
shows. Internet Relay Chat (IRC) is a party line over which you can have more or less
interesting conversations with other people all over the place Although IRC seems to be
frequented primarily by bored college students, you never know whom you will encounter. Many
Internet providers have facilities for "chatting" that enable you to have online conversations with
a bunch of people at the same time.

Internet Fax

Internet Fax application shifts analog communication to packet-switched Internet. This

application reduces the cost of the fax transmission as it is charged on a local telephone call
rate even if it is an international or long distance fax.

Streaming Audio and Video

Streaming Audio and Video allows Internet users to see and hear data as it is transmitted from
the host server itself without waiting the total download of the file.

Real-Time Audio and Video

Real-Time Audio and Video allows the transmission from the source live and in this application
communication could be one-to-one or one-to-many or many-to-many.

INFORNATION RETRIEVAL SERVICES

FTP (File Transfer Protocol)

FTP (File Transfer Protocol) is the primary method of transferring files over the Internet. On
many systems, it's also the name of the program that implements the protocol. Given proper
permission, it's possible to copy a file from a computer in Mumbai to one in Los Angeles at very

8
fast speeds (on the order of 5--10K per second). This normally requires either a user-id on both
systems or a special configuration set up by the system administrator(s). The basic objectives of
FTP are:

• to give flexibility and promote sharing of computer programs, files and data
• to transfer data reliably and more efficiently over network
• to encourage implicit or indirect use of remote computers using Internet
• to shield a user from variations in file storage systems among hosts

Transferring files through FTP require two participants : a FTP client program and FTP server
program. The FTP client program, we run on our computers. The FTP server program runs on
the mainframe and stores a large number of files. The FTP server is similar to an online library
of files. The FTP client can upload files to the FTP server or download files from FTP server.

Archie
Archie is a search system on the Internet that continuously connects to FTP Servers and
indexes all the available files in a database. Special software (the shareware program WS-
Archie) makes it easy to access an Archie-Server and is a great facility for finding a specific file
on the Internet.

Gophers

Gophers is the term used for a special information service on the Internet. It is coined from "go"
and "for". A gopher is a computer client tool that enables users to locate information stored on
Internet gopher servers through series of hierarchical menus. It is a menu controlled retrieval
program that helps you access large data on the Internet, without having to know the respective
Internet address. With the help of Gopher, one can load other files through FTP and can query
databases through WAIS. However, Gopher has now been replaced by intelligent search systems
like Lycos, Google, Altavista and Yahoo.

Veronica

Veronica (Very Easy Rodent Oriented Netwide Index to Computer Archives) is an extension to
Gopher and it provides the capability of searching for text that appears in gopher. Veronica is the very
powerful text oriented search tool used in the Internet and if one wants to search for information on
various subjects then Veronica is a good choice.

WAIS

WAIS (Wide Area Information Server) is software in the Internet that was conceived for getting
information from databases that are distributed across the entire Internet. WAIS programs are
available for all important operating systems.

Electronic Journals

The Association of Research Libraries (ARL), USA publishes a hard-copy directory of electronic
journals, newsletters, and scholarly discussion lists. It is a compilation of entries for hundreds of
scholarly lists, dozens of journals and newsletters, and a many ``other'' titles, including
newsletter-digests, into one reference source. Each entry includes instructions on how to
access the referenced publication or list.

9
WORLD WIDE WEB (WWW)

The World Wide Web is a phenomenon of the early nineties but its popularity has increased
exponentially in the recent times because it is simple and easy to use and rich in content. It is a
series of documents connected through hyperlinks stored on various web sites thereby forming
a web like picture. It provides a global, seamless environment in which all information (text,
images, audio, video, computational services) on the Internet can be accessed in a consistent
and simple way by using a standard set of naming and access conventions.

Tim Berners-Lee and others initially conceived the Web in 1991 at Swiss Research Laboratory
CERN. The scientists at CERN needed access to a wide variety of information on many
different, distributed, computers. Berners-Lee had this idea of universal readership, which is that
any client should be able to read any information. Berners-Lee developed the basic ideas, which
others have since added to. Then those involved agreed to work by a common set of principles:

• There would be no central control. The Web works because people work within the
agreed-to guidelines. As part of this the Web ethic is that anyone can publish, and
anyone (who is authorized) can read information.

• All Web servers would use the same protocols/mechanisms....

 http, a fast, stateless, extensible transport mechanism would be used to

communicate within the Web
 httpd, or http daemons, would be the base Web server - receiving messages and
providing data as requested
 URLs (Universal Resource Locator) would be used for network-wide addressing
 all Web browsers would use the same basic language - HyperText Markup
Language HTML

• Built into the mechanism is support for format negotiation. Web clients tell servers what
formats they can handle, and Web viewers allow basic browsers to use different formats.

The Internet and World Wide Web

World Wide Web has become so much popular that some people believe that it is the Internet.
Actually this is not true. The Internet is the physical aspect i.e. computers, networks, services. It
allows us to connect to thousands of other computers across the world. But it doesn't mean that
those systems users' can look at, and understand, the information there.

The Web is built on the Internet, and makes use of many of the mechanisms the Internet
provides. The Web is an abstraction and common set of services on top of the Internet. It is the
set of protocols and tools that let us share information with each other. The older internet
services such as Telnet, FTP, Gopher, etc, are all integrated into the web although you can
access them separately also.

When we visit a web site, we first view a document called a home page. A home page is the first
page in a web site and provides link to other pages or information in the web site. This page
gives the name of the organization to which this site pertains along with the sponsors name, site
developers details, viewing guidelines, etc. It also contains highlighted buttons and pictures,

10
which are hyper links, and clicking on any of these buttons or pictures will take you to the
corresponding linked document. Each link contains the address of another document thereby
taking you to different sites in different parts of the world.

The Web was developed with the concept of "universal readership" where any participating
system should be able to read the information on any connected system using a common set of
tools, browsers, servers/gateways, addressing schemes, common protocols and format
negotiation. Your system, which has a unique number assigned to it (an IP address) is
connected to an Internet Service Provider, possibly through a dial-in modem, or by a direct
connection. There are currently so many ISPs in the India, most of which run local networks of
their own with multiple Points of Presences (POPs), allowing you to dial in to a local number,
even if your ISP is not located nearby. The ISP in turn is connected to other providers, and
eventually to one of the big carriers, who have huge networks. At the other end there is probably
an ISP who gets a request you made to a specific web address, and who will route it to the
server at that address, which then does its magic, and sends you back what you asked for -
again using the various pieces of the network we just went through.

Web Browsers

Web browsers are powerful tools, performing many different functions, as shown in the picture
below. There is no standard way of viewing or navigating the Web. A variety of Web browsers
exist. Most browsers have most of the functionality shown in the diagram, although there are
some differences in levels of support and overall performance. Most browsers are still being
updated and improved, with new releases every two or three months. Each computing platform
will have a number of browsers available on them, including character cell browsers like Lynx
for terminal-based users (without the graphics support, of course).

Figure 10.1: Functions of Web Browser

11
One of the key concepts behind the Web is that the user should be able to control the
presentation, so most browsers provide ways to tailor the interface (e.g. size, color and type of
fonts, whether images are always shown, whether traversed links are highlighted, and so on).

The most used browser today are: Microsoft Internet Explorer and the Netscape Navigator
which are used by an estimated 75-80% of the current user base.

Netscape Communicator

It is not just browser but a multipurpose suite that handles email, news, audio and video
conferencing and many more application. The suite includes Navigator, Composer, Instant
Messenger and Net2Phone with the strategy to make browser a core of a suite of applications
for users.

It's no accident that Netscape is the most popular browser on the Web. There is certain HTML
code that is only interpreted by Netscape's browser. For example, if you use Netscape you can
see colored backgrounds; most other browsers don't support the viewing of colored
backgrounds. Also, Netscape supports tables, text color, Java and more. Other details can be
seen at Netscape's home page by visiting the site http://www.netscape.com

Microsoft Internet Explorer

Internet Explorer makes it easier to get the most from the World Wide Web, whether you are
searching for new information or browsing your favorite web sites. And built-in IntelliSense
technology can save you time completing routine web tasks, such as automatically completing
web addresses and forms for you, and automatically detecting your network and connection
status. Following are the features in Microsoft Internet Explorer:

12
 • The easiest way to get around the Web
• A customizable browser
• Safety in browsing the Web

For more details, you can visit the Microsoft web site: http://www.msn.com

Offline Browsers

Generally we do web browsing or surfing by clicking the hyperlinks or typing the addresses of
web sites. There are programs that transmit information from a web site to your computer
without your doing anything. The program needs to be setup for this. These are called ‘Offline
browsers’ as they enable a user to retrieve the desired pages from web sites automatically at
pre-defined times. This model is called ‘Pull model’ as they pull information from the internet.
Examples are Web Whacker and WebEx.

Push Model of information Access is developed with the growth of information over the Internet.
Unlike pull model of information access where web user seek information by specifying a page
to be pulled down to the PC after mentioning its URL, following a hotlink or using a search result
from a web search sites, automatically supply information to the user by pushing to the desktop
by means of a process running on either user’s Pc or a network server.

13
SEARCH ENGINES

Special tools known as search engines, directories, and indices help you find information on the
Internet. Lots of people are trying to make the fastest, smartest search engine and the most
complete Net index. Two of the most useful are AltaVista and Yahoo.

The biggest problem that most people have with the search engines is a failure to understand
what the Search Engines are going to do with each page they have designed. Unlike a
directory, the search engines only allow you to enter a url for submission to their system. How a
search engine indexes and summarizes your web page is entirely up to you and have more than
one method, which you will need to employ to accomplish this.

Search Engine And Directory System

This issue confuses a lot of people and therefore it would be relevant to define the primary
differences here.

Search Engine - A search engine is a database system designed to index internet addresses
(urls, usenet, ftp, image locations etc). The typical search engine contains a special program
often called a spider (also sometimes called a "bot" or "crawler" or “ant” or “agent”), the spider
accepts a URL, it then goes to that website and retrieves a copy of the file found there.
Sometime later, it the search engine will process that copy of the file, distilling it down to the
bare essential data it needs for the database. While most search engines request both a URL
and an email address, the search engine makes the determination as to what data ends up in
the database. In short, given a URL, an automated process occurs which results in your site
being included into the index. Metasearch engines enter search queries into number of search
engines automatically and return result to the users.

Directories - A directory is basically a manual entry database system. You, as the end user
submitting your URL, will supply the directory with all of the needed information during the
submission process. At a minimum, this information includes, URL, title and a short summary of
your website. Rarely will the directory have any program capable of visiting your website,
although a few directories do have a simple spider capable of verifying that the URL you
provided was a valid URL.

While both classes of systems have elements in common, such as the ability to search the data
base, boolean expressions, and advanced features. The primary distinction lies in how the two
systems obtain their data. One does it automatically (search engines) and the other does it
manually (directories).

Filters. We get lot of information over the Internet, which may be relevant or irrelevant or may
be mixture of both. Information filters are an automated method to sort out the relevant and
irrelevant information separately thereby helps user to get precise information without spending
excessive time. Examples are: Net Nanny, Surf Watch etc.

Personalised Web services are able to generate personalized web contents to an individual
web visitor as per the information gathered by his previous visit to the web site.

INTRANETS

14
Businesses are using e-mail and web technologies on their own internal networks and calling
them intranets. An intranet is a bunch of services, such as Web pages, that are accessible only
within an organization i.e. an Intranet is a private network that uses Internet software and
TCP/IP protocols. An intranet is sort of private www – an Organization Wide Web. The
communication is restricted within the organization but may be extended to organisation’s
dealer network or supplier network or business partners. This extended Intranet is named as
Extranet.

INTERNET CHALLENGES

Although the Internet is used extensively and its capabilities are too vast as explained above, it
faces number of challenges ahead like rapid advancement of technology and adoption of these
new technologies by users, Internet regulation and its legal aspects and an explosion in Internet
traffic over the network causing congestion and slowdown in the available bandwidth. Besides
these challenges, Internet privacy is also to be considered an important challenge ahead as
Web sites collects personal information during the time of registration without knowledge of an
individual. Normally, website collects information about the users through “Click-stream” data by
using cookies. A cookie is a small data file placed on users hard disk during their first visit to
website and thereafter used to exchange information between a server and a browser
automatically without the knowledge of the users. It tracks user’s action and preferences to be
used later.

APPLICATIONS OF INTERNET IN E-COMMERCE

The state of the art Internet technologies like Electronic Data Interchange (EDI), Electronic Fund
Transfer (EFT), Smart cards, etc. are transforming the key business processes. The Internet is
revolutionizing commerce. It provides the first affordable and secure way to link people and
computers spontaneously across organizational boundaries. This has given rise to innovative
enterprises - virtual companies, markets, and trading communities. The effective use of these
technologies and the easy availability of Internet provide a boost making Electronic Commerce
(E-Commerce) a reality.

WHAT IS ELECTRONIC COMMERCE

Electronic Commerce popularly called E-Commerce is often used interchangeably with the term
"E-Business". In reality, E-business carries a much broader sense rather than just the shopping.
Some people also use the term “Internet Commerce” to mean electronic commerce that
specifically uses the Internet or the web for data transmission. In its simplest form, it refers to
shopping on the part of the Internet called the World Wide Web or the Web. But web shopping
is only a small part of the E-Commerce picture. The term also includes online stock
transactions, downloading software without going near a store, etc. For most businesses, it's not
really about selling at all but about improving relationships among suppliers, distributors and
customers. Electronic Commerce can be defined as any form of computerised buying and
selling, both by consumers and from company to company, which facilitates choosing the
goods, ordering, delivery, after sales support and payment". E-Commerce refers to the
paperless exchange of business information using a suite of technologies such as Electronic
Data Interchange (EDI), Electronic Mail, Electronic Funds Transfer (EFT), Credit cards,
Facsimile (FAX), Electronic Bulletin Boards (BBS) and Database services, etc. It can also be
defined as the process of two or more parties making business transactions via computer and
some type of network, e.g. Internet or some private network.

15
TYPES OF E-COMMERCE

E-Commerce can broadly be divided into three categories:

Inter-organizational: between different business entities. This could take place either on the
Internet or on the Extranet, which lets only a select few to participate in the transaction. e.g.
supply chain management, payment management.

Intra-organizational: within an organisation or a business entity. The goal is to link the

constituents together and increase the flow of information within the organization. Examples of it
include human resource or department web sites that disseminate information and services
through an Intranet.

Retail: directed at the consumer. e.g. for selling , buying and payments.

Year 1998 Year 2002

B to C
B to C
23%
34%

B to C B to C

B to B B to B

B to B
66% B to B
77%

Figure 10.2: Distribution of E-Commerce

However at micro-level of operations, the classification could be of the following types:

• Business-to-Business (B2B)
• Business-to-Consumer (B2C)
• Consumer-to-Business (C2B)
• Consumer-to-Consumer(C2C)

Currently other types of interfaces are also being added to above classification such as:

• Government-to-Citizen (G2C)
• Citizen-to-Government (C2G)
• Government-to-Business (G2B)
• Business-to-Government (B2G)

INTERNET and WEB – An Integral part of E-Commerce

The Internet is a worldwide network of thousands of computer networks. Using Internet, we can
communicate with other people throughout the world via e-mail, read online version of
newspapers, magazines, academic books and journals, join the discussion groups on almost
any conceivable topic, participate in games and obtain free computer software. The Internet

16
provides an inexpensive and information-rich, shared network interconnecting very large
number of people and computers across the world.

World Wide Web (www) also called the Web, is a series of interconnected documents stored on
computer sites or web sites. When we use a computer and computer software called browser to
visit a site on the web, we get a display of home page. A home page generally gives the name
of the organisation or individuals sponsoring the site having a list of highlighted words, buttons
or pictures which provides a link to a number of interconnected documents. People use the web
for many reasons, They use it to locate product information, share research, exchange e-mail,
get news, financial information, do trading of shares, do research, look for jobs, chat with others,
transact business, take courses and pursue social and political agendas, etc. Today all kinds of
businesses provide information about their products and services on the Internet. Many of these
organisations use the Internet to market and sell their products and services. The potential is
enormous.

The use of Internet for E-commerce is on account of the following benefits:

• Customization
• Interactiveness
• Attention
• Timeliness
• Market Coverage
• Scalability
• Low transaction Cost for User

The Internet is favoured over other alternative means of communication due to the following
features of Internet:

• Ubiquitous
• Open To Everybody
• Easy To Use
• Inexpensive As Compared To Other Technologies
• Flexible To Handle Wide Array Of Applications
• Global Reach

Internet is defining the way we communicate with each other, live, play, work and conduct
business. It s challenging he set norms of doing business. Today, a person just needs a
computer, a browser and access to the Internet and he can buy flowers, computers, airline
tickets, a book of his choice and even jeans specially cut out for him. The recent development of
Wireless Application Protocol (WAP) promises to make the Internet mobile i.e. it is accessible
through the cell phones and can browse the WAP enabled sites.

The predominant language on the web is English although sites in other languages are
appearing with increasing frequency. Once the language barrier is overcome, the technology
exists for any business to conduct e-commerce with any other business or consumer anywhere
in the world. The sky is the limit.

REQUIREMENTS FOR ELECTRONIC COMMERCE

17
In order to conduct E-Commerce or E-Business, the essential requirements are different for
different participants. A consumer, who wants to buy some goods electronically, requires: the
Internet connectivity and a national or International Credit Card for Payment i.e. a fast and
reliable payment system. A business on the other hand requires: a web site providing interactive
access to the consumers for selecting and ordering the products. For this he must have an
updated catalogue of goods with Items codes, names, expected delivery times, rates, pictures,
and a host of other features. He should also have some foolproof system for authentication of
credit card payments. Apart from this, he should also have Logistics and Shipping systems for
delivery of goods to the consumer. However for all these cyber transactions, the Cyber Laws,
Taxation Laws, etc should be well in place.

TRADITIONAL COMMERCE TO E-COMMERCE: CHANGING SCENARIO

The use of electronic data communication technologies primarily those that are part of the
Internet and the web shall improve existing business processes and identify new business
opportunities. In certain cases, business processes use traditional commerce activities very
effectively and those processes cannot be improved upon through technology. Products that
buyers prefer to touch smell or examine closely are difficult to sell using electronic commerce
e.g. perishable food products, high fashion clothing, etc. Branded merchandise and products
such as books or CDs can be easily sold using e-commerce. Therefore the situation varies from
business to business and we have to study the specific business under consideration.
E-commerce alters the traditional concept of time and space. The company can access new
customers all over the world very efficiently, around the clock, seven days a week. This expands
the market address and potential for higher sales. It also gives customers the opportunity to
browse and shop at their convenience and at their own pace.

E-Commerce through Internet is likely to result in new industrial order or economy, which can
be, referred as Paperless Economy. The Net Economy is using Internet as a backbone i.e.
Internet is used for conducting critical activities of the company such as sell, buy, market,
exchange data and information, etc. The basic tool i.e. the Internet is not just another marketing
channel or advertising media. It is not just another way to speed up transactions. It will rather
result in changing the relationship between consumer and producer in a number of ways. This
has given rise to another area called electronic Customer Relationship Management (eCRM).
Some of the changes brought about by the adoption of e-commerce are:

Virtual Corporation - Opportunity for the use of external business partnership - might have no
physical location. Two or more parties can create a partnership that relies completely on
electronic transactions.

Global Market Access by Smaller vendor - global markets, traditionally open only to large
companies, will be accessible to smaller vendors due to lower need of resources to operate
aboard. E-Commerce breaks the geographical boundaries. These boundaries will no longer
bind a company's aspirations to be a global player or in restricting the scope of its market.

Transformation of the retail store - growth of Home Shopping and direct-from-manufacturer

sales causing lower prices by reducing commission, rent etc.

Pressure on Customer Service, Development Cycle and Costs - stronger need for rapid,
direct delivery. The value chain will become less and less tolerant of the need for inventory and
storage. Greater competition will be unavoidable. Might cause stronger need for electronic cash.

18
New Standards - lead to many new formal & defacto standards for Components, Packaging,
interfaces, documentation etc.

Unhindered Growth of business – business can grow to any limits with least resource inputs.
The need to increase the sales staff or hire commercial space to grow is no longer
required.

The organizations should not blindly follow the trends and join the e-commerce bandwagon. It
must first analyse whether its business activities are suitable for such adoption of electronic
means. Some businesses are highly suitable for e-commerce while some may never lend
themselves to e-commerce. Business Processes, which are suitable for various types of
commerce, are given in Table:10.1.

Table 10.1: Comparison of E-Commerce and Traditional Commerce

S.No. Electronic Commerce Traditional Commerce Combination of E-commerce

and Traditional Commerce
1. Sale/Purchase of Sale/Purchase of High Sale Purchase of
Books, CDs, Music clothing Automobiles
2. Online Delivery of Sale/Purchase of Online Banking
Software perishable food products
3. Advertising and Small-Denomination Matching services
promotion of Travel transactions
services
4. Online tracking of Sale of expensive jewelry Sale/Purchase of Investment
shipments and antiques and Insurance products

INFRASTRUCTURE FOR ELECTRONIC COMMERCE IN INDIA

E-Commerce requires easy and inexpensive availability of Internet. VSNL which had the
monopoly of providing Internet connectivity had about 45000 Internet subscribers in 1997 which
has grown to over 5 lakh mark till 1999 and is projected to touch 30 lakhs by 2002. According to
third Annual PC industry analysis carried out by Skoch Consulting Service, a Delhi based
research firm, the total number of installed PCs in the country will grow at 70%.

This number is minuscule compared to the US where around 40% of the population is on the
Internet. Despite such a growth in the users, the services are far from satisfactory. This
penetration will reach a standstill if we do not promote other modes like cable and even Internet
through mobile phones (WAP), which has already entered the market. The cable system has
been tried successfully in Orissa and most of the cable service operators are eyeing to harness
the rich potential by bringing the middle-class on the net through the existing cables.

19
 100
90

CONNECTIONS(in
80
70
INTERNET

Lakhs)
60
50
40 30
30
20 5 13
10 0.45 3
0
1997 1998 1999 2000 2002
YEAR

Figure 10.3: Internet Connections in India

The NICNET and ERNET were setup in the early 80s, so as to form an information highway that
would link the various parts of the country and form single web of information. Presently India
has networks like NICnet, ERNET, VSNL, Banknet, SAILnet, BHELnet, ONGCs network and so
on most of which are built around a single organisation. These networks were not able to
communicate with one another thereby making the communication across various networks
highly expensive.

The other pre-requisite for E-Commerce, the payment mechanism still needs to be evolved fully.
With the banks also moving into the networking with the setting up of BankNet, the scenario
appears to be quite encouraging.

In order to take the E-Commerce to the lowest level of population, Government of India has
taken a number of decisions to boost and strengthen the information infrastructure in the
country. Some of these are:

• DOT to focus on building additional capacities for the National Information Infrastructure.
• Tariff for both Internet and other data services have been lowered for faster dissemination.
• Aim to help users get Net connection immediately anywhere in the country.
• DOT to continue to provide Internet service but focus increasingly on providing the national
backbone to enable interconnectivity among private ISPs.

The government of India is busy chalking out plans and measures to strengthen the e-
commerce boom in all possible ways. It is necessary for them to first create an environment and
setup necessary infra-structure for a smooth trade through the worldwide web and promote it to
replace the age-old documentation system and time consuming transaction, before thinking of
any controlling measures.

NEED FOR ELECTRONIC COMMERCE

20
E-Commerce is shrinking the world. Distant markets suddenly are within easy reach, saving
business time and money, prospecting and presenting new business opportunities based on
better, more thorough information. A Company that incorporates electronic commerce as a
major component of its marketing strategy stays at least in line with, if not ahead, of the
competition.

What really pushes a business organization to move to a paperless environment? There can be
numerous reasons to place the organization on the e-commerce bandwagon. Although these
reasons are specific to every organization but some of the common ones are listed below:

• Competition – The organization is either forced by the competition or it can pre-empt the
competition by moving ahead of others in joining e-commerce. An excellent example is Dell
Computers that was the first to start sale of computers through the Internet thereby reducing
cost. It also provided a facility to the customers to assemble the computer choosing different
hardware components such as Memory, Hard Disk, CD Drive, Monitor, etc. IBM, Compaq
and other manufacturer’s had to change their marketing strategy to find ways to reduce
operational costs by adopting the e-business model of sale through Internet.
• Global Reach – The Internet has crashed the geographical boundaries and the entire world
has shrieked to a global village. This permits the customers to make purchases from any
part of the world without actually visiting the place. This widens the reach of the companies
to the entire globe. This further translates into 24 hour, seven days a week and 365 days in
a year business for the company. For example, books can be purchased from amazon.com
from any part of the world, AT&T allows the customer to receive the bill and authorise
payment electronically from any part of the world.
• Customer Service – Personalised and Customised services through Internet is one of the
greatest advantages e-commerce offers. The customers can customise the product
according to their own taste such as: online newspaper. The customers can be updated on
the status of order placed by them when it goes through various stages of processing such
as pacing, shipping, etc. Pre-sale and Post-sale support is an important ingredient of the e-
commerce package.
• Value Addition - A product has to go through various stages of value addition from
manufacturers to the consumers and at each stage the cost is added up making the product
expensive for the consumer. This business chain can be shortened through the adoption of
e-commerce thereby making the product cheaply available to the consumers.
• Nettish Products – The products which are more suitable for purchase through the Internet
as their delivery takes place through the Net are referred to as Nettish Products, e.g. E-mail,
E-Greetings, Software, Chat Software, etc.

The fall in operational costs, higher quality, integration of supply and distribution chain,
improvements in efficiency levels and etc. are too attractive for any business to ignore. Business
is increasing on the Internet because it provides cost-effective alternative. According to a study
in France, it has been established that use of EDI alone could lead to net savings ranging from
20 to 80 percent.

ADVANTAGES OF E-COMMERCE

The advantages of E-Commerce for business-to-business are:

• Lower purchasing costs

• Reduced Inventory Control

21
• Lower cycle time
• Efficient customer service
• Lower sales and marketing costs
• New Markets (Sales opportunities)
• Smooth business operations and
• Reduced Document processing costs

COSTS OF ELECTRONIC COMMERCE

Some of the more important costs and benefits especially as they relate Electronic Commerce
activities on the Net are as follows:

a. The Web Hosting Cost - The first-cost, a company face when it decides that it wants a web
presence, is the hosting cost. Hosting determines where the files and images associated
with the web site are going to reside. Large companies or those who want that total control
tend to perform this function in-house while small businesses or those who do not consider
this function a core competency will out-source the service with an Internet Service Provider
(ISP). It is hard to break down hosting costs for companies that perform the services in-
house because a lot of the costs get absorbed into general overhead. In any event we have
to account for such things as the salaries of the staff that run the operation, the connection
to the Internet, domain registration & equipment. The costs for out-source hosting will be
high compared to the in-house hosting.

b. Design and Development Costs - Once we have found a place to host our web site, the next
task is to design & develop it. Again this can be performed in-house or contracted out. The
costs involved in both will vary depending on size & complexity of the web site.

c. Maintenance Costs – This cost relates to maintaining the web site.

d. Opportunity costs - There are also opportunity costs. This is especially true for small
business if they put up the web site themselves. Resources (time and money) are scarce
and decision-markers need to ask if they could be better used elsewhere. Consumer or
end-users of web sites also face costs. There is a lot of misinformation on the web.

CHALLENGES OF E-COMMERCE

India needs a framework to encourage and stimulate the growth of e-commerce in all its forms.
The good news is that these all are getting fixed. Cyber laws governing e-commerce
transactions are now getting in place with the passage of “IT Bill”. The Information Technology
Act 2000 is expected to provide security of the transactions on the Internet. The potential
inhibitors to the widespread adoption of E-Commerce in India are:

LEGAL BARRIERS: The major legal barriers to EDI implementation are the admissibility of EDI
generated documents and their acceptability as evidence in court. The Government has setup a
committee to study the legal requirements for EDI, review the current laws in India, identify
those that need to be amended and recommend legal policies, amendments and administrative
regulations that may be required to legalize EDI transactions. For example: Indian Evidence Act,
Intellectual Proprietary Act, etc.

22
RELIABLE ELECTRONIC PAYMENT SYSTEM: For purchases made on the Internet, they must
be paid. This requires on the part of an e-business organization to offer flexible payment options
to the customers that are safe, convenient and widely accepted. Electronic Payment System
(EPS) is a method of paying for an on-line purchase (tangible or intangible) of goods or services
in a paperless mode i.e. without actually holding cash or issuing a cheque. Electronic payments
are an efficient means of payment, offering improved security, assurance of value, require
lesser manual intervention, and offer reduced cost and easier record storage and handling. The
business has to therefore find out (identify) which choice among various options works the best
for the company and for the customers. The four technologies or payment systems that are
used on web-sites offering shopping facility are- Electronic Cash, Software wallets, Smart Cards
and Credit/Debit cards. Each of these systems has unique properties, costs, advantages and
disadvantages. Some of these are already popular and widely accepted for payment while
others are still growing and are in the evolving stage and their future is unclear. For an
organization, they must understand the merits and de-merits of each method before making a
wise decision on payment system to be adopted by them.

Electronic cash distribution and payments can be handled by e-wallets, smart cards or through
proprietary; limited use scrip (e.g. flooz). Electronic cheques are the encrypted representation
that resembles e-cash. This mode for online payments though small at present but is growing
quite rapidly. Credit & debit cards are the most popular forms of e-payments. A recent survey
indicates that over 80% of the Internet purchases are paid for with credit or Debit cards. Debit
cards draw the payment directly from the bank account in the same way as cheques do.

All Electronic Payment Systems have some issues that must be resolved to allay customer
fears and give them confidence. Some concerns about electronic payment methods include -
Privacy & Security, Independence, Portability, Divisibility and convenience. Of these issues,
privacy and security are primary concerns to be addressed. A customer wants to know “Is the
transaction not private and secure. Can the electronic currency be copied, reused or forged”? If
the answer is ‘Yes’, the customer will not use the system.

SECURITY CONCERNS: Since Internet is 'Open', ‘untrusted’ and ‘global network’, security of
data sent over the public networks is a primary concern. In general, the businesses and
individuals interested in E-Commerce face four primary issues in terms of security:

I) Privacy: Assurance that the transaction is private between sender and the receiver and
the transaction can be read only by the intended receivers. This can be achieved by
using data encryption techniques. The resolution of this issue is likely to be market
driven: If individual privacy remains a major consumer concern, E-Commerce will not
flourish as predicted.
II) Authentication: Verification of both the sender and the receiver's identity with proof of
transactions and receipt of messages are done. It ensures that the transactions have
been generated by a specific known source.
III) Integrity: Assurance that the transaction received is identical to the one that was sent by
the sender. It can be ensured by end-to-end message authentication.
IV) Non-Repudiation: Proof that a transaction actually took place between identified parties
and the message has not been modified en-route.

The Internet as a media does not support any of the above issues; hence technologies are
being developed to permit sharing of information on above four counts. Some of the solutions
ensuring security of the transactions are: Firewalls, Tunnels, Encryption (Public and Secret

23
keys), Digital Signatures, Digital Certification, etc. The Secured Socket Layer (SSL) designed by
Netscape, is the most commonly used security design protocol. It has become a standard and is
being supported by large number of Web Servers and Web Browsers.

TAX FRAMEWORK: As e-Commerce in general and business in cyberspace in particular

grows, tax administration faces new complexities. It is therefore imperative that Indian tax
authorities must address themselves to the implications of this development. This requires tax-
sharing agreement between various countries. A number of multi-lateral organizations and trade
bodies like World Trade Organizations are involved in deep discussion on the global framework
adopted for taxation of cyber transactions involving huge sums of money.

ELECTRONIC GOVERNANCE

E-governance or electronic governance may be defined as delivery of government services and

information to the public using electronic methods. Electronic Governance is the application of
Information Technology to the processes of Government functioning to bring about

• Simple
• Moral
• Accessible and Accountable
• Responsive and
• Transparent Governance.

This is referred as SMART governance. The e-governance is much more than mere
computerization of the activities of the government departments or operations. This extended
scope demands change in the mindsets of the legislature, executive and citizens. E-governance
will mean nothing if its benefits are not felt by the citizens or users of services.

Governance and the Information Technology

The information technology has contributed in a big way in the development of society as well
as the industry by providing timely information. IT has changed almost all walks of life and has
streamlined the operation and management of organizations with its enormous power, speed
and accuracy. IT is a very essential tool or means to ensure that the government reaches out to
the people and that the people are able to reach the government with ease. Internet, which is a
product of ICT, has enabled many governments to ensure transparency by providing information
to citizens through websites and helping them to interact with the government effectively.

E-governance and The Internet

The Internet offers huge advantages for governance to turn around and create a special
relationship with the people. With the wide acceptance of Internet and Internet expanding wings,
government and local bodies across the whole world have started initiating steps to modernize
their operations using various IT tools. Like many corporate bodies, they are also facing key
challenges i.e. people demanding high quality service, more transparency, faster and quicker
response. To meet the expectations of the citizens, the government/local bodies have started
assuring people as well as foreign investors to provide single window processing of their
requests offering 24-hour service, seven days a week services to the people. It is transforming
the way public services are delivered. The Internet has enabled many governments to ensure

24
transparency by providing information to citizens through websites and helping them to interact
with the government effectively. Though many European and Western countries in this direction
took the lead, India could not remain exception to this. The government of India took the
initiative in this direction and has already promulgated Information Technology Act, privatized
the Internet services and have established a full-fledged Ministry of Information Technology.
With central govt. taking an active interest in the IT sector which is India’s big hope, e-
governance-the IT enabling of govt. functions is on the fast track.

Challenges & Issues in E-governance

Despite some progress in the e-governance area, not much has been achieved in India despite
the fact that year 2001 was declared as the year of e-governance by the Union government. In
order to materialise the dreams of electronic governance in the country, basic issues like
privacy, usage have to be sorted out. The laws in the present form are incomplete and several
issues like privacy, taxation, and protection of children from obscenity on the Net do not have
their deserved mention in the laws. There is a strong need of a joint role between the
government and the private sector to leverage expertise and plugging gaps of each other.
According to Central Vigilance Commissioner, e-governance will not succeed in India until the
four inbuilt cultures of administration -- confidentiality, corruption, seniority and lethargy -- are
not done away with. E-governance has become a fashionable buzzword in India since the last
couple of years.

Despite several development initiatives, the infra-structure for e-governance in India is still far
from satisfactory in comparison to many developing countries in the world. Some of these are:

• Congestion in Bandwidth
• Poor tele-density (2.75)
• Low accessibility of the new technology
• Insufficient growth of Cyber cafes
• Low penetration of computers due to high cost
• Slow growth of Information Kiosks

Apart from this the attitudinal issues are:

• Trained manpower
• Increased awareness of computers among public
• Empowerment of people
• Changes in mindsets and Attitudes
• Increased use of IT in routine operations

Some of the areas where government needs to focus are:

1. Lack of a proper National, State and Local Information Infrastructure (NII, SII and LII) is
highlighted as the real bottleneck in the successful and speedy implementation of e-
governance in a cost effective manner. More importance should be give to see that a
very good II is implemented at the earliest to speed up the successful proliferation of e-
governance. Since this involves huge investment, Government can explore the
possibilities of entrusting the installation and maintenance of II through BOT, system with
necessary protection of Government information.

25
 2. It is high time that the Government realizes the importance of outsourcing in key areas.
Wherever possible outsourcing should be promoted.

3. Importance should be given to develop the software needed for various Governmental
works in local language. For example, In Kerala, Malayalam being the official language
should be used. Vernacular software development should be promoted as far as
possible.

4. For e-Governance to be successful a very good HR development policy should be made

available. Training and Retraining is very much needed for the successful
implementation and maintenance of e-governance. Suitable strategies should be
decided upon the sufficient and timely HR development.

5. For sustainable growth of State economy, an IT based planning system shall be

introduced. Technologies like Geographic Information System (GIS) should be utilized to
harness the maximum potential. This planning approach should be introduced from
Panchayat, District and State level.

6. IT implementation strategy of the State should be formulated through a time bound

action plan and monitoring system.

7. Simplify the Official procedures. Make available all the Acts, rules and circulars in digital
form

Priority Areas for e-Governance Initiatives

The departments or activities, which have maximum citizen interface, must be identified for the
use of information technology. Some of the priority departments and their specific applications
are:

Public Grievances: Electricity, Water, Telephone, Ration Card, Sanitation, Public Transport

Rural Services: Land Records, Below Poverty Line (BPL) /EWS Families

Police: FIR Registration, Lost and Found (Valuables, Persons, Dead Bodies)

Social Services: Pension, Old Age, Widows, Exgratia Scheme, Rehabilitation & Compensation
Registration of Licences and Certificates

Ration Cards, Birth Certificates, Death Certificate, Domicile Certificate, Caste/

Tribe Certificate, Arms Renewal, Registration of Documents, School Registration,
University Registration, Motor Vehicle Registration, Driving License

Public Information: Employment Exchange Registration, Employment Opportunities, Examination

Results, Hospitals / Beds Availability / Services, Railway Time Tables, Airline
Time Tables, Road Transport Time Tables, Charitable Trusts, Government
Notifications, Government Forms, Government Schemes

EWS Services: Civil supplies, Old Age Pension, Widow Pension, Handicapped Pension /
Services, Ex Gratia Payment

26
Agriculture Sector: Speeds Information, Pesticides, Fertilizers, Crop disease, Weather Forecast -
short range / District wise, Market Price

Utility Payments/Billing: Electricity, Water, Telephone

Commercial: Taxation & Return Filing, Income Tax, Corporate Tax, Custom Duty, Central /
State Excise Duty, Sales Tax, House Tax, Property Tax, Octroi, Road Tax,
Company Returns

Government: Electronic Procurement, Education University Model for E-Governance

SUMMARY

Although still in the embryonic stage, e-commerce is big potential world-wide for Business-to-
Business and Business-to-Consumer sector and this is true in India too. By encouraging e-
commerce we will gain, besides lower prices and better quality of information without cost and
responsibility of maintaining it. E-Commerce is unaffected by time zones, geography or location,
language barriers and business hours which offers real benefits. Although India has to go a long
way to realise the true potential of Internet for conducting E-Commerce, a lot depends on the
initiative of the government to build the necessary infrastructure, but it can surely be said that E-
Commerce is the way to a better future. E-governance will mean nothing if its benefits are not
felt by the citizens or users of services. The speed breaker on the e-governance road such as
red tapism and employee resistance should not affect such initiatives. One thing is there that e-
governance has definitely caught on, and the results are there for everyone to see.

SELF ASSESSMENT EXERCISES

Short Answer Questions

1. What is Internet? Distinguish between Internet and World Wide Web.

2. List and explain any three services of Internet.
3. Describe characteristics of Internet.
4. Define DNS with example.
5. How is an Internet address determined? Who assigns these addresses?
6. What is URL?
7. What are the hardware and software requirements for an Internet connection?
8. What is FTP and what are its basic objectives?
9. What are the protocols used on the Internet?
10. What is a web browser? What features will you compare in selecting a browser?
11. Why is using the Internet called ‘surfing’?
12. What is the difference between Leased connection and Dialup connection?

27
 13. What is the role of html in world wide web?
14. What is a search engine? Name some popular search engines and explain their utility.
15. Distinguish between ‘Search Engine’ and ‘Directory’.
16. Explain the different parts of the following: http://www.pclabs.com/downloads/vrm.htm
17. What is an Intranet? What role does it play in an organization?
18. Distinguish between Internet and Intranet.
19. Explain in brief
a) TCP/IP
b) Domain Name
c) Telnet
d) Internet Security
20. What is Electronic Commerce? List its various types.

21. How E-commerce is different from traditional commerce?

22. Why is Internet considered the most preferred media for conducting e-commerce?

23. List the features of Internet that support e-commerce.

24. What are the major hurdles in conducting E-commerce transactions in India?

25. What costs are involved for an organization in setting up presence on the web?

26. Distinguish between a ‘Portal’ and a ‘Vortal’.

27. List some of the organizational and consumer benefits from e-commerce?

28. What is an electronic payment system? What are its different modes?

29. What are the primary security concerns for e-commerce?

30. List the security requirements for conducting e-commerce. Discuss briefly the methods
available for ensuring security of e-commerce transactions?

31. What is EFT? How is it useful in enterprise integration?

32. Discuss the major issues involved in the conduct of E-commerce activities in India.
33. Explain the terms: Digital Signatures and Digital Certification.
34. What is e-governance? How IT is relevant in e-governance?

Critical Thinking Questions/Projects

1. Visit the Internet, scan business magazines, company’s annual reports and other
relevant sources and prepare a report on at least three organizations that have successfully
used the e-commerce.

28
2. Prepare a small report on how Internet Advertising is being used by organizations. What
benefits do they derive from it?

3. Identify the innovative ideas the organizations are employing to attract

consumers/visitors to their web sites. Explain them using specific example.

4. Visit the stock exchange in your area. Study its operations and see how electronic
trading is done. Identify its benefits over traditional methods.

5. Identify at least five real world cases of B2B commerce. Profile their operations and find
similarities and dissimilarities in their operations.

6. Visit some e-commerce site on the Internet and find what and how they are conducting
business on the Internet.

7. Visit the web site of Ministry of Information Technology, Govt. of India and the state
government to which you belong. Find out what activities have been adopted for e-
governance and discuss any one of them.

8. Prepare a list of various Internet Service Providers operating in your city. Make a
comparative chart showing the features, tariffs, etc.

9. Subscribe to a newsgroup and test how you can send reply to articles using Internet
Explorer.

29