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The credit crunch computer is set to arrive tomorrow in India when officials unveil the 500 rupee (£7.25) laptop. In an attempt to bridge the "digital divide" in the country between rich and poor, the government will show off the prototype, low-cost laptop as the centrepiece of an ambitious e-learning programme to link 18,000 colleges and 400 universities across the country.

India has a reputation for creating ultra-cheap technologies, a trend sparked last year by the Tata Nano, the world's cheapest car at Rs100,000 (£1,450).

The computer, known as Sakshat, which translates as "before your eyes", will be launched as part of a new Rs46bn "national mission for education". This envisages a network of laptops from which students can access lectures, coursework and specialist help from anywhere in India, triggering a revolution in education. A number of publishers have reportedly agreed to upload portions of their textbooks on to the system.

Prabhakar Rao, vice-chancellor of the university in Andhra Pradesh from where the Sakshat will be launched, said that India was "looking to get the hardware and software cheaper. In a developing country, costs have to be kept low so that the maximum number of students will benefit. That means cheap computers and cheap broadband access, so that students get access to ebooks and ejournals."

Although half of India's 1 billion people are aged below 25, the country has fallen behind in terms of university places, with only 11% of students enrolled, compared with double that in China. India's bigger northern neighbour already has 180 million internet users, five times India's total.