Reaching the bottom of India’s digital pyramid
Digitization has received a significant policy push in India. There has been an emphasis on linking bank accounts and mobile number with Aadhaar, maintaining digital records, enforcing digital payments through demonetization or Aadhaar-enabled payments systems and making digitization as one of the core requirements in GST (goods and services tax) filings.
However, the policy push towards digitization is one leg of the story. Its success crucially depends also on its adoption by the majority of the population living in far-flung rural areas. Without that, the result could be islands of the unempowered communities at the bottom of the digital pyramid with vast skill gaps risking a digitally divided India. It is in this perspective that we revisit the challenges of digitization at the bottom of the digital pyramid.
Smartphones are expected to share the bulk of the workload in digital India. However, their share currently is around 33% of the mobile users (expected to reach around 40% by 2019). The mobile phone internet user penetration among Indian population is still about 24% and even by 2020 is expected to reach just 35%. These figures point to an opportunity for digital inclusion for sure, but there are issues galore that need concerted attention.
Despite targeted efforts by Indian policymakers, there are still snags in the outreach of Indian financial system where digitization is expected to play an enabling role. A recent study by Assocham and EY reports that 19% of the Indian population remains unbanked or financially excluded. If this is a reality, then digital India programme without addressing issues like this will only magnify the digital inequality in the country.
Uninterrupted access to power is an essential ingredient to fuel a digital economy. However, existing statistics look somewhat disappointing. Around 22% of rural households (roughly 40 million) across the country still do not have access to electricity. More than half of the rural households in states like Uttar Pradesh and Bihar are yet to have access to power. The distribution companies are already struggling to purchase enough electricity for the people they serve. Besides, there are other obstacles (thin usage, below-cost tariffs, slow repayment of subsidies, etc.) in supplying power to rural homes.
At the back of the government push to digital mode of payment, we explored the acceptance of a service like mobile-based payment through an informal countrywide survey. Our respondents were cellphone users in tier 1 and tier 2 cities, primarily in the age group of 18-40, using any cellphone for at least two years. Post demonetization, the subscribers in these cities had little choice but to adopt mobile-based payment services (mobile wallet). A large percentage of the respondents from tier 2 cities were occupational migrants in search of their livelihood. The survey was conducted between March and August. The inference drawn is worth highlighting in this context.
Users who had prior working knowledge of internet and smartphone applications seemed more likely to accept digitalization tools. It emphasizes the need for internet and mobile application training aimed at less educated and the low-income groups.
Subscribers opined that digitization tools and technology should meet their needs. Thus task-technology fit assumes significance for continual usage of new-age digital devices. It emphasizes the need to identify the requirements of people at the bottom of the digital pyramid which could get served by digitization, take it to them and incorporate their views to enhance its acceptance (co-creation to be precise).
The subscribers feel that the service charges should be commensurate with the benefits of digitization. They felt monetary value is positive when the perceived quality is higher than the personal sacrifice. It will continue to remain a challenge for people at the bottom of the digital pyramid who stay stretched to make both ends meet on a daily basis.
Existence of technological and legal institutions to ensure security would increase adaptability. Academic research provides empirical evidence on the significance of initial confidence in mobile-based banking secured through structural assurance. The right to privacy is possibly the first step in that direction. A beginning no doubt, but it will take time before India’s data protection regime comes on a par with standards set in jurisdictions like the European Union or the US.
Last but not the least, the aptitude to read, write, comprehend and communicate is a must to participate in the digitization movement. India’s current literacy rate is at 80%, and there are expectations of achieving 100% over the next five years. However, literacy would lead to participation and empowerment in a digital India only when it can ensure lifelong reading ability. Unfortunately, empirical evidence suggests that a sizeable section of these literates are unable to read at grade 2 level. Moreover, a significant portion of them also face a high probability of losing their already weak reading skills.
Given this background, there needs to be further thoughts, plans, programmes and actions to touch the population at the bottom of the digital pyramid on a continuous basis to make a unified, powerful and an empowered Digital India.
Parijat Upadhyay and Manas Paul are, respectively, assistant professor and professor at IMT Ghaziabad.
Comments are welcome at firstname.lastname@example.org