India at 74 : Time for 2nd Digital Revolution

As I write this blog celebrations of India's 74th Independence are marked across the country and globally across homes of the Indian diaspora. Although the celebrations are muted on the ground due to the spread of the COVID-19 pandemic, there is no such restrictions online. From Whatsapp messages to social media posts enthusiastic Indians consumed massive amount of data to wish their near and dear ones on this day. The main attraction of the day was the speech by the Prime Minister of India from the historical Red Fort in which he announced the preparation of Health Card for 1.3 Billion people. The card would store health and medical history of individuals. This announcement must have brought smile for the Healthtech and Medical sector. Many of us instantly drew parallel with the Aadhaar ID card (Citizen ID) which stores biometrics information apart from the address of our homes. The time to unravel the 2nd Digital revolution is here.

Onset of Digital Journey in India: Flourishing back offices

Exactly 25 years back on 15th August 1995, VSNL launched internet in India. In those days prices were steep but still people were optimistic of its potential to democratize information dissemination. The spread of internet and economic development went hand in hand in the next two decades changing India from a socialist shy country to the Information Technology driven "back office" of the world.

The data below shows the sectoral composition of Indian GDP over the last 7 decades. It clearly shows the transition from an Agricultural based to a Services driven economy.

Source: Reserve Bank of India (RBI)

During this period there was a need felt to use Digital Technology for the upliftment of the marginalized sections of the society. Digital technology has the power to rapidly transform how countries provide services to their citizens. The public services of the future should be effective, efficient, fair, data-driven, and responsive to the needs of the individual. If managed wisely, Data can be the key in achieving the objective of quality health and education services for all which would help boosting social and economic inclusion. Alongside these exciting opportunities, countries must also anticipate and manage the associated risks of the digital revolution. To this end, India’s pioneering use of data and technology can be a model for other developing countries.

Digital Technology for public services: JAM Trinity

India has led the way in this regard, by intentionally making its new digital infrastructure a public good. For example, Aadhaar, India’s biometric unique identification system, shows how cutting-edge technology can solve the societal problem of establishing unique identities in a developing country of over a 1.3 billion people. The use of Aadhaar helps to prevent the abuse of various government schemes such as the cooking gas subsidy extended to each citizen only once in a given period. Aadhaar is also used by all citizens as proof of identity in key processes such as applying for and renewing passports, opening bank accounts, and accessing credit quickly and conveniently.

In subsequent years the Government opened bank accounts for the poor (Jan Dhan bank account) who were unbanked with the objective of directly transferring benefits to them without the involvement of middlemen. The Jan Dhan scheme was awarded a Guinness World Record for opening the most bank accounts in a single week (18 million during August 23-29, 2014). Jan Dhan bank account was linked with Aadhaar card and Mobile Phone and the trinity called JAM became the fulcrum of managing Government's scheme for the poor. The rapid use of online mobile payment in recent years is something which is now actively encouraged by the Government. According to data by the RBI, the total number of digital transactions in India, that are processed via any electronic mode, be it UPI, IMPS, debit and credit cards, etc., is expected to reach a daily average of 1.5 billion in the next 5 years. Consequently, the net value of digital payments in India will also increase from its current value of Rs. 5 trillion to Rs. 15 trillion by 2025. With an estimated 500 Million mobile phone internet users by 2023, it would be safe to assume that the mobile phone would be the key to implementation of welfare programs and preferred mode of financial transactions.

Source: Statista

Digital Technology Revolution 2.0 :

After establishing the JAM (Jan Dhan, Aadhaar and Mobile) trinity its time for the Government to focus on larger complex issues. A gradual evolutionary approach will not resolve large, complex societal problems. Too often, organizations believe they have the solution to a big social challenge – such as improving access to health care across rural India. Rather than searching for one perfect solution, India should instead build a digital infrastructure that empowers passionate innovators, nurturing an interconnected network that can simultaneously co-create thousands of solutions to hundreds of different problems. Instead of more and better siloes, we need more nimble and open innovation environments. New technology, institutions, and regulations can help to reimagine education and health, build human capital, and prepare young people for the jobs of tomorrow. India still has much to do in that regard.

Conclusion and Recommendation:

The following could be the things that could be done in the next level in the Digital Revolution in India to boost social inclusiveness and promote growth:

1. Universal Health Card:

The Aadhaar database can be used as the base for setting up the universal health card. The card would contain digital medical history of patients and can be very helpful when a person with ailments switches to a new hospital or doctor. This should also be tied to health insurance so that people can avail insurance benefits during the course of their medical visits and treatment.

2. Universal Public Distribution Scheme (PDS) Card:

The Government is planning to have One nation one ration card which is normally used by the poor to avail subsidies provided by the Government in food grain, cooking oil, gas etc. Currently it is marked to the state where the person is a native citizen or permanent resident. This severely affects migrant laborers who are losing out on Government subsidies marked for the poor. A digital PDS card would be the right step which would help migrant workers who are the backbone of the manufacturing industry.

3. Universal access to broadband internet :

The Government is pushing hard to provide high speed internet in the rural areas who currently have access to internet only through mobiles. The National Broadband Mission announced by the Government in 2019 aims to provide broadband access by 2022 to all villages in India. With an estimated 1 billion internet users by 2025, the mission will enable strengthening of technological infrastructure for education, health, entrepreneurship and development in rural areas.

Source: Statista

4. Access to quality education through online:

The Government should make it more feasible to have access to high quality education through online medium. It's not feasible to world class institutions such as IITs, IIMs, NITs etc in every cities in India but it's possible to make online classes for a wider audience. A public private partnership in this regard will be quite essential.

5. Access to online entrepreneurial mentorship:

The Government has made the flagship program of Startup India and many budding startups have come up in metros and urban centers. It will be prudent to take this to rural areas where budding entrepreneurs can see first hand the problems and device solutions. The access to mentorship through online would be good step to groom young minds in rural centers.