Perspectives on Digital India

India and the United Kingdom share a modern partnership bound by strong historical ties. During the last visit of PM Modi to UK, the relationship was given a boost with renewed focus on technology and increasing cooperation in trade, investment and finance. UK is India’s 15th largest goods trading partner and the 4th largest investor in India, while India is the third largest investor in the UK and emerged as the second largest international job creator with Indian companies having created over 110,000 jobs in the UK in recent months.  Education is an important plank of the India-UK bilateral relationship, while Science and Technology sector is the fastest growing element of our bilateral relationship.
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We share old cultural and historical links and value democratic principles. Indian culture is now mainstream in UK and the Indian origin community here is an integral part of the new multi-cultural Britain  numbering approximately 1.5 million - almost 1.8 percent of the population and contributing 6% of the country’s GDP. 

It is most appropriate that I speak about a new Digital India today at the Asia House- the veritable centre of Asian studies in UK. The old India represented resources and business opportunities for the old Britain. A new India again beckons UK with a host of business opportunities, especially in the digital arena. UK and the world at large need to understand the transformations that technology is bringing about in India and the ways it will change the commerce, security and the entire global governance system.

This was a new paradigm of technology led growth for sustainable development of an economy powered by 1.3 billion people and reinforced by demographic dividend where 65% of them are below the age of 35.
 
From this vision was born the Digital India Programme to transform India through the power of technology and bridge the digital divide. Other programmes like Start-up India, Stand-up India and Skill India were designed to become an important adjunct to this larger narrative.

Digital India has enabled us to build holistic capabilities across the entire ICT spectrum- infrastructure, electronics manufacturing, software services and delivery platforms, IT skill sets and job creation, which in turn are transforming India into a digitally empowered society and knowledge economy. The focus is on providing easy access to services to the citizens anytime from anywhere. A few key development aspects of Digital India include the following:

• Promoting investments through improving ease of doing business
• Creation of IT jobs and capacity building
• Encouraging entrepreneurship across the country by leveraging information technology
• Strengthening financial inclusion by using mobile banking, micro ATMs and through public outlets
• Promoting literacy through easy accessibility to e-books and other digital content
• Faster services and dissemination of information to promote growth in all sectors, e.g. growth in agriculture by providing real time information to farmers, growth in healthcare through online consultation, etc. 
• Use of information technology to bring more women’s participation in the professional, economic and social arena

Four years down the line, empirical evidence suggests that Digital India is not only creating empowerment but also generating employment opportunities and promoting entrepreneurship. Laying down of 2,74,246 km of optic fibre connecting 117,000 gram panchayats under BharatNet, speaks volumes about the speed with which we have created digital infrastructure that is reflected inIndia’s digital profile today

• 1.21 billion phone users
• 1.21 billion users with unique Digital identity- Aadhaar
• 478 million internet users
• 456 million smartphone users and growing
• 3rd largest Startup Ecosystem
• One of the biggest digital ecosystems in the world creating huge amount of data.

Access to technology is the first key step for its adoption and eventual empowerment. Access must be easy and affordable. India under the leadership of Prime Minister Narendra Modi has understood this. We under took some path-breaking initiatives to provide easy and affordable access to technology to 1.3 billion people of India:

• Bharat Net to connect all the 250,000 village clusters by high speed optical fiber internet. More than 117,000 village clusters have been connected in last than three years.
• Digital Literacy to make 60 million adults digitally literate under Pradhan Mantri Grameen Digital Saksharta Abhiyan
• Aadhaar- world’s largest biometric based digital identity system for resident Indians that has been given to 1.21 billion Indians.  
• Common Services Centers- more than 300,000 of these digital services delivery kiosks were created across the country to provide access to digital services in rural areas at affordable cost. It has also created a new breed of rural entrepreneurs.

Not only easy and affordable access was important but also simple services tailor made to the needs of the diverse population was critical for the success of Digital India. India’s young and innovative minds have played a key role in this. India being the third largest Startup ecosystem of the world is creating innovative solutions to some of its unique problems. This necessitated the government to come up with innovative digital solutions for citizens such as:

• eNAM: An online national agriculture market so that farmers can get the best prices for their produce. 9.3 million farmers registered.
• eHospital: So that patients can get easy access to doctors. Implemented in 248 hospitals.
• National Scholarship Portal so that students can get their scholarship easily. 18.4 million students registered.
• eVisa facility has been extended to citizens of 161 countries so that visiting India becomes easy for foreigners. 1.9 million visitors used this facility in 2017.
• MyGov: world’s largest digital democracy platform for easy and online participation of citizens in governance. 5.5 million registered users.
• BHIM-Aadhaar and UPI: Innovative and simple fin tech solutions that have contributed to the growing digital economy of India. Using BHIM Aadhaar even a person who does not have a mobile phone make digital payments at merchant outlets using his biometric authentication.
• UMANG: A single mobile app that is offering more than 250 government services on a single platform. In the next three years this platform will offer more than 1200 digital services on a single mobile app. More than 6.6 million users have downloaded this app till date.
• BPOs in Small Towns: To spread the digital industry in smaller towns and create employment for local youth BPO promotion schemes were introduced by our government. I am delighted to share with you all the success of this initiative. Today 91 BPO units have come up in 27 states and Union Territories.

The winds of digital change sweeping across India are changing not only the way Indian access and consume information, but the very way we live, study, do business and work.

The size and scope of India’s Digital Sector is now well established. It is a matter of great pride that 200 IT companies of India are working in 80 countries of the world and providing service to one third of the Fortune 500 companies. It is a matter of great assurance that despite global uncertainties, India’s IT exports are growing.

• Contributed almost 8% of India’s GDP and 45% of our service sector exports in 2017-18.
• Largest market share (56%) in global services sourcing industry
• The sector is the largest employer within the private sector, employing almost 4 million people directly and 12 million people indirectly.
• More than 16,000 firms, of which over 1,000 are large firms with muli-national presence. Several are major investors in the UK.
• Cost competitiveness in providing IT services, approximately 3-4 times more cost-effective than the US
• Domestic tech-market is the fastest growing in Asia-Pacific, witnessing growth of over 11% in 2016-17.
• India’s IT exports in 2015-16 stood at $107 billion, which has increased to $ 125 billion in 2017-18.  
• Growth in revenues of Indian IT companies is also very satisfying. Total revenues of Indian IT companies in 2015-16 were $ 129 billion, which increased to $ 167 billion in 2017-18.
• Information Technology and Business Process Management (IT and BPM) sector’s revenue estimated to reach USD 350 bn by 2025.
• Even in face of global slowdown, the sector continued to expand in India and added almost 1000,000 jobs in FY 2017-18. According to Randstad, the Indian IT sector is poised to grow at a cumulative growth rate of 9% next year.
• Our special incentive and promotional policies including the National Cyber Security Policy, the National e-Governance Plan (NeGP), the Software Technology Parks (STP) Scheme etc. make available various exemptions and concessions by the state and union governments to this sector.

Electronics Manufacturing- As part of the larger Make in India vision, my ministry has actively promoted electronics manufacturing. Mobile phone manufacturing units in the country increased from just 2 in 2014 to 120 in 2018. In the same period, annual production of mobile handsets increased from 60 million units to 225 million units. It has created 100,000 direct and 350,000 indirect jobs. Similarly, TV and LED products manufacturing have grown significantly, with more than 50 units set up in the last 4 years.

• Policy initiatives like Modified Special Incentive Scheme, Electronics Manufacturing Clusters and Electronics Development Fund have helped boosting investments in electronics sector.  
• Measures like correction in inverted duty structure, rationalisation of domestic and import duties and phased manufacturing program have made India’s electronics industry globally competitive.

Another area of strong growth is the e-commerce sector, which grew at 19% year-on-year in 2017-18, mainly driven by growing rural aspirations and increasing digital penetration. Apart from generating employment in direct activities related to e-commerce platforms, this growth has a positive impact on the micro, small and medium enterprises (MSMEs) and has a favourable cascading effect on other industries, creating increased employment opportunities.

Innovative India- nurturing the Startup culture- Since 2014, our Government has encouraged startups through concerted policy measures. Prime Minister Modi saw the potential of startups and took a comprehensive policy initiative to promote the startup through Startup India. Today, India is world’s third largest startup ecosystem in the world after USA and UK. More than 5000 startups have come up in last four years. Nearly 10 startups have acquired unicorn status having worth more than $ 1 billion. Average funding per startup in India touched $ 6.2 million.

Future Drivers of Growth- With such an extensive digital profile India is uniquely poised to take a leap into the next era of digital growth and development by tapping the potential of emerging technologies like Internet of Things, Big Data, Artificial Intelligence, Blockchain and Robotics.

• Number of IoT devices in India is expected to increase from 200 million currently, to 2.7 billion by 2020, showing exponential growth.
• According to industry estimates, the jobs in Robotics and Artificial Intelligence have increased by 50% during current year, indicating growth of demand by industry in these segments.
• The huge digital profile of India is creating unprecedented amounts of data. The rise of Data Centre industry is inevitable.  We expect this sector to reach $4.7Billion by next year.

• The traditionally cash-driven Indian economy has responded well to the Fintech opportunity, primarily triggered by a surge in e-commerce, and smart phone penetration.
• Government has given a strong push to the digital payment sector. Promoting digital economy in the country and which itself is inducing a change in consumer behaviour. Buoyed by the successful acceptance of demonetization, Indians are increasingly adopting digital transactions. This has created tremendous opportunities in Fintech Sector.
• Unified Payment Interface (UPI), Bharat Interface for Money - BHIM app, the RuPay Card or the Aadhar based payment systems which does not even require one to have a phone for carrying out the transactions are fascinating story of great innovation.
• The transaction value of the Indian Fintech sector is forecast to reach USD 73 billion in 2020 growing at a five-year CAGR of 22%.
• GST Ushers an Era of Digital Taxation: Introduction of Goods and Services Tax has given a new impetus to digitization. GST is a fully digital tax. GST Network has created the digital backbone for administering GST. It has been only one year of rolling out of GST but the following numbers show the impact on digitization it has made:
  • 3.5 billion invoices processed digitally
  • 110 million GST returns filed digitally
  • 100 million eWay Bills generated digitally
  • Rs. 11 Lakh Core- annualised tax collection of GST, yielding 11.2% growth in indirect tax collections, which is historic given the continuous reduction in tax rates.
• Technology to Boost Tax Compliance: Effective use of digital technology has made it easy to pay taxes. Direct tax collections have increased significantly:
  • No. of Income Tax Payers who filed returns grew from 38 million in 2012-13 to 68 million in 2017-18:
  • Increase of Income Tax Collections increased by 64.6% in the same time frame.  
  • Tax to GDP ratio increased by 1.5% despite large number of tax sops in last four years.
  • Use of data analytics after demonetization helped in identifying abnormal financial transactions:
    • 1.77 million suspicious cases (PAN holders) were identified where the cash transactions did not match with the tax profile of the PAN holders.
    • 2.24 lakh shell companies were struck off.
    • About 1.5 lakh (1,48,165) people deposited a total of around 5 lakh crore (Rs 4,92,207 crore) which is almost 1/3rd of total currency deposited.
• Technology to Boost Ease of Doing Business:
  • eBiz online portal has been developed as a single window system for all investors.
  • Enactment of the Insolvency and Bankruptcy Code.
  • Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act was enacted for speedy and time-bound disposal of commercial disputes.
  • Foreign Investment Promotion Board (FIPB) was abolished; henceforth, almost all FDI will be through direct route.
  • Time taken for environment/forest approvals brought down from 600 days to 180 days.
  • Reduced number of mandatory documents needed to do trade - from 7 to 3 for exports, and 10 to 3 for imports.
  • Launch of Shram Suvidha Portal: One-stop shop for labour law compliance bringing in transparency and accountability in inspections, where employers can submit a single compliance report for 16 labour laws. Labour inspectors disallowed from swooping down on companies; instead, a computerised system put in place to randomly send them on inspections, based on data trends and objective criteria.
  • Application for Importer Exporter Code (IEC) simplified - only two documents required to be uploaded along with digital photograph; eIEC introduced doing away with issuance of physical copy of IEC.
  • ePAN: Recently ePAN service has been issued where by digital PAN number will be issued using Aadhaar eKYC within few minutes of receiving online PAN application.
  • Legislative measures like Insolvency and Bankruptcy Code, revision of Commercial Courts laws, Institutional Arbitration etc. Have boosted India’s ease of doing rankings by 42 places in a year and make it a more attractive destination for investors.

Technologies like AI to Augment Jobs and Not to Replace Jobs- Every new technology brings about changes in the job market. Computers are the biggest example of this. When computers came in India, many conventional jobs gave way to new jobs. There were apprehensions that computers will take away jobs but today computers have become the biggest job creators. I see Artificial Intelligence in the same way. It is true that AI will alter job nature on many fronts but it is equally true that it will open up opportunities for new type of jobs. Therefore, India’s approach will be augment jobs using Artificial Intelligence rather than merely replacing human beings from job space. Only this will create a sustainable job market in future. 

Policies to manage change- We have instituted a comprehensive policy to anticipate and encourage technological changes in India.

• National Data Sharing and Accessibility Policy 2017: To promote innovation using government data, an Open Government Data Platform was created. 105 Ministries (81 Centeral Ministries and 24 state Ministries) are on this platform. In February 2017, we notified the National Data Sharing and Accessibility Policy. These efforts have led to promotion of open data in Government. In 2014-15 only 19,652 resources were available on open data platform, which has increased to 175,000 resources in 2018-19.
• Artificial Intelligence: A strategy has already been developed to use AI in governance. My Ministry is finalizing detailed plans that would develop the framework- legal, ethical and technological for encouraging the adaptation of a range of emerging technologies across public and private sector.

We have also undertaken steps for skilling and re-skilling of our technical workforce.

• The programme- Skills for Future Initiative launched by the Prime Minister is aimed at developing manpower trained to meet the requirements of emerging technologies. It is a very good mechanism to coordinate among industry and government to boost capacity building in the emerging technologies.
• India is emerging as the hub for “Digital Skills” with spending of USD 1.6 billion annually on training workforce in the sector.
• In order to meet the growing demand for human resources to cater to the growing electronics and software industry, Government has encouraged Electronics System Design and Manufacturing (ESDM) training to upgrade skills as well as a Ph.D. scheme to boost high end research and development.

Respect for Data Accuracy and Data Privacy- Data is essential for growth of new technologies.

• This data must be accurate to ensure that the decisions taken by the machines are correct. It is essential that systems developed on new technologies must inculcate trust among the users.
• Our Supreme Court has ruled in a landmark judgment that privacy is a fundamental right. We are working on bringing out a new data protection and privacy regime. India’s data protection law will be a robust law which can become a benchmark in the case of data security globally. But privacy cannot be a shield of the corrupt and the terrorist.
• We took a strong stand on the issue of reported misuse of Facebook data of Indians by Cambridge Analytica. Platforms will never be allowed to abuse our election process for extraneous means. The purity of the elections will never be compromised.
• Our government has conveyed its concerns to social media companies and they must ensure that their platforms are not used to defame people, promote terrorism or extremism.
• We must have a fine balance between data availability, data innovation, data anonymity and data privacy. We need data to improve business but the data must be anonymous, objective, and taken with consent. There is a need for striking a balance among data utility, data innovation, data anonymity and data privacy.

Attractive destination- India offers a great promise for investors. The future is very promising because India’s digital economy, large size of our market, demographic dividend and passion for technology is creating enormous demand. Our digital economy also includes emerging areas like AI and IoT, the growing start-up movement and low cost, effective cyber security solutions. While we work out the details, no one doubts the potential to make India’s digital economy worth $1 trillion, employing 5-7 million people in the next 5-7 years.

It has been said that economic growth will be underwritten for the next generation by both green innovation and secure digital networks. India offers massive scope in both the areas for investors from UK.

The Digital future of the world- inclusive, affordable, transformative and growth oriented is being written in India today. No firm that has a stake in the future can afford to sit out the digital revolution taking place in India. Digital India beckons- make it a part of your digital future.

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