Digital India is an ambitious vision that has the potential to be an equaliser for Indians by driving inclusive growth for the economy. Connecting villages with broadband, the initiative brings better, more accessible, governance to the people. It also encompasses many other initiatives — India’s national financial inclusion plan that aims to connect every Indian to a bank account, building 100 Smart Cities, and the Make in India programme designed to spur local manufacturing and job creation.
- Digital India is not all new. It is an amalgam of three ongoing programmes: the National Optical Fibre Network (NOFN), the National Knowledge Network and the e-governance initiative. What’s different is the ambition and how quickly it is slated to get done. Digital India seeks to provide broadband access to all and deliver all manner of services to the citizen’s doorstep.
- If Digital India programme is implemented properly, India will enjoy the true benefits of historic economic growth. In fact, an American company has estimated that the adoption of key technologies and policies across sectors spurred by the Digital India initiative could help boost India’s gross domestic product (GDP) by $550 billion, propelling its GDP to $1 trillion by 2025.
- But, without a sound policy in place this would remain a dream. The programme must be paired with sound policy — the foundation on which innovation, economic growth, and social progress is built.
Challenges before the initiative:
- 85% of Indians still don’t have access to the Internet, and a majority of them live in rural India. This is far short of the near-universal access and connectivity envisaged by the Digital India mission. There are also significant gaps in last-mile connectivity.
- FDI in e-commerce sector remains restricted, meaning smaller Indian e-commerce companies cannot seek the capital they need to grow their business and hire more employees.
- Small- and medium-sized Indian manufacturers, who are vital to the Make in India programme, are held back by their lack of access to broader domestic and international consumer markets.
- In 2012, the Ministry of Communications and Information Technology issued a compulsory registration order to safeguard consumers from substandard electrical and electronic items. This move is understandable. However, under the order, new equipment cannot be imported into or sold in India unless it is tested and registered with the Bureau of Indian Standards’ approved testing labs in India — even if they have already been certified by international certification organisations. The requirements create another regulatory bottleneck in an already strained system. The cost of complying with these requirements is high, and is ultimately passed on to Indian consumers.
Policy changes required:
- In the spirit of promoting Digital India and innovation, e-commerce models should enable small- and medium-sized businesses across India to reach national and global consumers.
- The government should vigorously pursue the expansion of broadband and IT infrastructure throughout the country. Private sector collaboration should also be encouraged by the government.
- The Department of Industrial Policy and Promotion should allow at least 51% FDI in e-commerce — and ultimately 100%.
- There is also a need to revamp safety testing requirements for electronic products. The country should also consider aligning itself with international standards by accepting certifications from internationally accredited labs.
Please note that the above mentioned reforms do not require parliamentary action.
Role of private sector:
The true potential of the Digital India programme lies in the private sector’s ability to innovate new technologies that enhance and modernise the way business and civic life are carried out. For India to achieve its full potential, it is necessary to implement Digital India in collaboration with the private sector.
India is already a technology powerhouse with a $148-billion IT industry. It is ready to become a worldwide magnet for innovation. Digital India is an enterprise for the transformation of India on a scale unmatched in human history. From a policy standpoint, the means to achieving that transformation are challenging but doable. Now is the time for India to remove bureaucratic hurdles that impede entrepreneurship and growth, and enable Digital India to flourish.