The idea of a Digital India draws initial scepticism. India has nearly a billion people without internet access, while 37 per cent of all adult Indians are illiterate. Despite the mobile boom, poor network infrastructure means there is no significant difference between 2G and 3G speeds. A realistic digital India would be one with a robust digital infrastructure, supplemented by homegrown electronic manufacturing and institutionalised e-governance.
The national optical fibre network (NOFN), a vital component of Digital India, has been flailing, with its projects behind schedule and unlikely to be completed before December 2016. With a purported plan for expanding the optical fibre network to one lakh gram panchayats (GPs), the reality is grim – just 20,000 GPs were actually covered.
Disputes over right of way predominate, despite agreements at a state level. The lack of specialised contractors and the non-availability of PLB ducts at various sites strain deadlines further. Laying the optical fibre cables is not the end all either. More than 67 per cent of NOFN points are non-functional, even during their pilot stage.
Much remains to be done. Mobile internet penetration in India hovers around eight-ten per cent, with around 100 million users, far below our 50 per cent 2025 target. Just eight per cent of all small and medium enterprises (SMEs) have a significant web presence, while cloud based e-governance initiatives remain paltry in number. The number of retail establishments accepting digital payments is confined to 0.6m, six per cent of the total, while one per cent of all transactions are linked to a digital identity. Less than one per cent of our electricity grid is smart, while only five Indian cities have experimented with some smart transportation. Even GIS satellites, launched by the ISRO, are trivially used by state governments, offering just basic imaging of forests, groundwater, soil and mineral content.
Last mile connectivity needs to be improved rapidly. Instead of a centralised NOFN scheme, local initiatives as Andhra Pradesh’s state-focused rollout, or Argentina’s community telecommunication cooperatives (CTCs) should be explored for faster rollout. The total cost of ownership needs to be reduced significantly through regulatory changes, tariff reductions and subsidies. A different approach based on the BSNL’s mass deployment of WiFi hotspots across the country, could yield better results. The BSNL can be encouraged to deploy one WiFi hotspot in every village, creating national impact.
Pushing for net zero imports in electronics in India would also create the foundation for an electronics industry. Global mobile phone players like Foxconn are considering India as a sourcing destination, but are put off by labour troubles and inconsistent duty regimes. The removal of the vital 11.5 per cent excise duty concession by the central board of excise and customs (CBEC) on March 1, combined with the SC verdict, has hindered the government’s plans to provide a 11.5 per cent advantage to local manufacturers. Modified special incentive package scheme (MSIPS) like production-linked subsidies, as the government has offered for the semiconductors and microprocessors should be expanded to cover the whole gamut. Even a booming e-commerce sector is beset with regulation. India currently permits 100 per cent FDI in B2B e-commerce activities but not in B2C companies. B2C companies like Flipkart and Amazon have adopted the market-place model, taking orders that are filled by other domestic retailers.
A separate policy framework for investments in e-commerce that relies on a functionality-based treatment of e-commerce platforms should be considered. Encouraging financial and strategic investments through a provider edge (PE) route, over a three-four-year period can be considered, subject to strict restraints on offline retail trading, 40 per cent sourcing from SME/MSMEs and no sale of food/agriculture/processed food on such platforms. The government has experimented with various e-governance initiatives, most of which have failed to materialise, given poor cyber security and significant privacy and data protection risk. E-governance has more examples. Britain has launched a pilot “Tell us once” service, allowing citizens to inform public authorities about birth, death or significant life events just once. Cities like San Francisco have taken this further (DataSF.org), allowing developers to build programs to display public transportation arrival and departure times, recycle zones and crime patterns. Service requests for pothole repairs can now be tweeted.
Sweden established an e-government delegation, to make public administration simple. Now, enterprises and entrepreneurs simply go to a website for business needs, while citizens use theme based portals (healthcare, taxation, employment, social insurance etc). All procurement and invoicing is conducted electronically restricting corruption opportunities.
Digitising the land registration market, along with increasing transparency and registering brokers, would cut down long search times and high costs in acquiring real estate. A less cumbersome process of accessing land records through the department of registration would increase usage, while helping to reflect actual transaction prices. Furthermore, mapping of land inventory needs to be carried out comprehensively, while providing accessibility to buyers.
Globally, many countries offer streamlined online processes and incentives to facilitate affordable housing – these can include tax deductions, density bonuses, direct subsidies, land grants, land use changes etc. Many countries, like Malaysia and Canada, have revamped their administrative requirements through fee waivers and fast-tracking procedures.
A Digital India is a one where empowering technologies, in fields ranging from education, healthcare, e-governance to agribusiness, can add economic value of one trillion dollars per year by 2025, creating millions of well-paying productive jobs and bring a decent standard of living to millions of Indians. India is ripe for a rapid diffusion of enabling technologies. The mobile internet could reach 900 million Indians by 2025. Combined with cloud-based services, a digital identity and secure digital payment schemes, such technologies can provide the foundation for the scale up of remote healthcare, rapid advancements in agriculture and distance based learning.
About 20 million SMEs could use cloud-based digital business tools instead of running them in-house at a higher cost. Over 100 million farmers could use real time market information, bolstering their marginal product and precision farming. A digital India could create a nation of micro-entrepreneurs, operating from their kirana store or garage. If we can get the fibre in place.