India’s growth story is on the other side of Digital Divide bridge

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By Manish Sinha, Chief Marketing Officer, STL

Let me share a great story! Tejaswi Kamble, a resident of Chandur, Akola district, in Maharashtra, had been trying to apply for POCRA (Project on Climate Resilient Agriculture) to avail the subsidy on the recently purchased sprinklers. Despite making several trips to Akola, he had not been able to successfully apply for it. One fine day, digital services were launched in Chandur and fortunes changed for him. Not only his application got approved within 10 days, he was also able to save resources on travelling afar.

Large population brings large opportunities
India is home to the world’s second-largest Internet user base, consisting of more than 630 million subscribers. That is more than the total population of the United States, the United Kingdom, South Africa, and Russia put together. It also has the lowest mobile data prices, which has allowed a large population to use the Internet.

While all of this is very exciting, it is tempered by the sobering reality of India’s continuing digital divide between those who have access to the Internet and other digital technologies and those who do not. The initiatives for expanding and strengthening infrastructure are grounded in improving economic conditions in remote, rural, and hard-to-reach areas and creating a strong digital foundation for socio-economic welfare.

Digital Leaders are Growth Leaders
There are numerous examples to validate that digitally connected economies witness a much higher growth rate. The wealth creation in the digital economy is highly concentrated in the United States and China, with the rest of the world – especially African and Latin American countries – lagging behind. A few global firms from the United States as well as China account for 90% of the market capitalization value of the world’s 70 largest digital platforms. The share of Europe is 4% and the share of Africa and Latin America together is 1%. This is corroborated by the findings of the Network Readiness Index Report 2020, according to which the United States, China, Denmark, Sweden and Singapore represent some of the most future-ready societies of the world – all of which are also high-income advanced economies.
This reflects that a country that is ready with its digital network is also ready to see greater productivity in its human capital. Therefore, achieving high network readiness is a calibration of our drive towards bridging the digital divide in India.

Bridging the digital divide is crucial for economic success
Even though 66% of the country’s population lives in villages, the rural Internet density is just around 25. On the other hand, urban areas have a significantly higher density of over 95. In order for us to grow and develop as a digitally connected India, we need Universal Internet Access. In fact, the COVID-19 pandemic has further emphasized the need for a strong digital backbone, powered by fibre, owing to the rapid shift to digital across industrial sectors. The fibre network needs to be able to make deeper inroads into the country – as thoroughly as the road or rail network. Realizing this fact, the government launched BharatNet – or the Bharat Broadband Network – an initiative started in 2012 to provide broadband in rural India. In the last five years, 1.5 lakh village panchayats have been connected with optical fibre cable; and in the next 3 years, all villages in the country will be connected with optical fibre.

BharatNet has set a strong foundation
BharatNet is a critical lynchpin that has the potential to fuel the economic growth of the country by digitally bridging the gap that physical infrastructure will take longer to cover. Not only is the digital infrastructure easier and faster to build, but is also equipped to provide a much higher return on investment (RoI) – and much faster. This is because it works at the most fundamental layer of citizen impact through education, healthcare and employment, thereby tackling fundamental problems like migration to cities. Additionally, digital Infrastructure will generate 60–65 million jobs over the next five years, and help India become Atmanirbhar in the true sense. It can actually be a springboard for India to leverage ‘Make in India’, increase economic activity, and realise the $5 trillion economy vision at an accelerated pace.

Therefore, it is critical to understand that equitable access to digital services is at the heart of bringing transformative change. With BharatNet serving as the solid foundation, it is now possible to make real positive difference in rural lives by bringing the benefit of digital services, such as telemedicine, e-tutoring and assisted e-commerce to the people. This technology revolution in galvanizing rural digitization is one of the most crucial steps towards bridging the divide in India’s digital journey ahead.

India has the potential to create a digital economy at a valuation of $800 billion to $1 trillion by 2025. The existing digital ecosystem could contribute as much as $500 billion of economic value. But the potential economic value could reach almost $1 trillion if digital technologies are used to unlock productivity and efficiency across sectors, such as agriculture, education, energy, financial services, government services, healthcare and manufacturing. The country will also socially benefit by having better informed and empowered citizenry, higher literacy rates, reduced mortalities (especially in rural areas), and greater job opportunities.

The government needs to accelerate the pace
While the government is already in the midst of infrastructure rollout to make India truly digital, there is a lot more that needs to be done.

• Global digital infrastructure benchmarks need to be studied and where possible replicated or revised to address India’s unique requirements. We recommend a hybrid of the two models for India. We can plan an initial rollout for 1-2 states, depending on its population density, topography, ease-of-deployment, and economic potential of broadband, followed by districts with a higher per capita income. Starting with these ‘higher potential’ regions will result in early revenue generation that can be reinvested for network rollout expansion within the country.
• There is also a need to re-calibrate the budget allocation for the telecom sector. While other infrastructure sectors are expected to receive an investment of ~17 lakh crores over the next five years, telecom is expected to receive only ~3.2 lakh crores. The government can also explore other sources to fund digital infrastructure, such as government-issued bonds, multilateral agencies, and international banking institutions.
• Public-Private Partnership (PPP): The wholesale entity model has the potential to accelerate digital adoption in India. An entity formed as per this model will consist of the central and state government, as well as numerous private telecom service providers. However, the ownership of the entity is retained by the government to ensure compliance with the core vision. The structure of the entity ensures private players are able to lease fiber to earn revenue and there is equitable access to digital services across the country.

Time to build Digital India is now!
The importance of a digital infrastructure cannot be emphasized enough, owing to its role in accelerating economic growth, buffering national security, and even as a critical determinant of international competitiveness. Hence, there is a need to build a strong, secure digital infrastructure that connects the length and breadth of the country, bridges the rural and urban divide, helps in overcoming the challenge of linguistic and geographical diversities, and provides access to governance at the grassroots level.

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digital divideManish SinhaSTL
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