Mumbai: Going by the slew of measures announced in the Union budget on Wednesday, such as targeting digital transformation while discouraging cash transactions, it’s easy to be lulled into believing that India is well on its way to becoming a digital powerhouse.
And why not? After all, finance minister Arun Jaitley did unveil a series of post-demonetisation digital reforms, including a Rs3 lakh cap on cash transactions, which he said were aimed at fetching the government Rs2,500 crore in revenue.
While the initiatives to build a digital India are undoubtedly important, we cannot ignore the fact that India has a long way to go becoming digital.
Here are a few reasons:
For one, India still ranks a poor 91 on the Networked Readiness Index (NRI) 2016—a key component of the World Economic Forum’s ‘The Global Information Technology Report 2016’.
The report assesses the state of networked readiness of 139 economies using the NRI and examines the role of information and communication technologies (ICT) in driving innovation. It is thus a key tool in assessing a country’s preparedness to reap the benefits of emerging technologies and capitalize on the opportunities presented by the digital transformation.
The 2016 edition of the NRI placed Singapore at the top of the list of countries when it comes to networked readiness. Finland, which topped the ranking in 2014, came second for the second year in a row, followed by Sweden, Norway and the US, which climbed two places. The remaining top 10 comprised the Netherlands, Switzerland, the UK, Luxembourg and Japan. Networked readiness, therefore, is correlated to per-capita income.
Not only was India ranked 91 among 138 countries in 2016, but WEF’s figures also showed that India had actually fallen 23 places in the NRI ranking in the last four years. In 2013, when the Congress-led United Progressive Alliance (UPA) government was in power, India was ranked 68 on the index out of 144 countries. When the Narendra Modi-led National Democratic Alliance (NDA) government took over in May 2014, the ranking slipped to 83 out of 148 countries.
In 2015, India’s ranking fell to 89 out of 143 countries. And in 2016, it slipped two places to 91 out of 138 countries.
While India’s absolute score has changed only marginally in recent years, other countries are racing ahead at faster speeds. Lack of infrastructure and low levels of skills among the population remain the key bottlenecks to widespread ICT adoption, especially in terms of individual usage—issues that governments have attempted to address over the last 10 years.
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As the WEF report pointed out in its 2016 edition, a deep divide persists between well-connected metropolitan hubs and remote rural areas, which lack even the most basic infrastructure. This implies that BharatNet’s implementation track record needs to significantly improve for the benefits to reach rural India.
Second, India’s spirited talk about becoming a cashless economy happened when the Indian government invalidated high-value banknotes on the night of 8 November, taking out 86% of the currency in circulation by value. It was supposed to be a war on unaccounted and untaxed wealth, counterfeit notes and terror financing. Instead, as serpentine queues formed outside bank branches and automated teller machines (ATMs) went dry for days and weeks together, the slogan changed. It became all about promoting a cashless or at least a less-cash culture in an economy where almost 90% of transactions are paid for in cash.
Indians can boast about technologies such as mobile wallets, crypto-currencies such as bitcoin, mobile peer-to-peer payments, blockchain technology, payment banks and architecture such as the unified payments interface (UPI) and the recently-launched Bharat Interface for Money (BHIM) app.
But the government is yet to devise a police on online security. The Indian IT Act (2008) alone will not suffice.
Third, Digital India’s Rs1.3 trillion programme—which envisages a plethora of e-governance services across sectors like healthcare, education and banking, and promises to introduce transparency in the system, reduce corruption and achieve inclusive growth—was only given the green light in 2015. And while the Modi government was simply building on the National e-Governance Plan (NeGP) that was approved in 2006 under the previous government, it is obvious that digital programmes do not bear fruit overnight.
Smart cities are a case in point. It takes 30-40 years to build a city. Programs like Smart Cities and Make in India will require considerable investments in terms of manpower, technological upgrades, skill development, digital literacy and, most importantly, a plethora of standards to be laid out and adhered to.
The Internet of Things (IoT) which entails hundreds of thousands of sensors will need interoperability of standards and security policies in place so that our smart devices, smart homes, smart grids and smart cities are not paralysed by smart cybercriminals.
Fourth, while one can see tangibles like the government’s Digital Locker and other e-services ride on a robust GI Cloud, also known as Meghraj, Internet speeds are poor in India despite the spread of fourth generation (4G) technology. Mobile calls still drop routinely in Digital India. Not to mention that many people in villages still do not have an Internet connection or enough local language content.
Fifth is the power of online education. In a bid to bridge the digital divide through online education, Jaitley on Wednesday also announced that the government’s Swayam platform, which has been developed by the ministry of human resource development and All India Council for Technical Education with the help of Microsoft Corp., will start offering 350 online courses.
Swayam “would be ultimately capable of hosting 2,000 courses and 80,000 hours of learning, covering school, under-graduate, post-graduate, engineering, law and other professional courses”, according to its website.
While online courses are definitely the need of the hour, they again will be dependent on high-speed broadband connectivity, a digital mindset, and more importantly, government recognition for online course certificates without which there will be few takers.
“India is at the cusp of a massive digital transformation,” said Jaitley as he listed ‘digital’ as one of the 10 key themes in Union Budget 2017. This will indeed be the case if the government does not ignore the hurdles too.