Going digital is not an option, but a necessity to realise growth potential. However, it must be backed by proper infrastructure, according to key players in the sector
Prime Minister Narendra Modi is banking heavily on the ‘Digital India’ initiative that aims to make optimum use of technology to improve governance. The BJP-led government also intends to boost digital literacy in the country by providing broadband connectivity to remote areas at affordable rates. It wants citizens to have easy access to government services on their mobile platforms.
As part of the second season of the Forbes India CEO Dialogues: The Leadership Agenda, Himanshu Kapania, managing director of Idea Cellular, Sunil Mathur, MD and CEO of Siemens India, Bazmi Husain, MD of ABB India, CP Gurnani, MD and CEO of Tech Mahindra, and R Chandrasekaran, executive vice chairman of Cognizant India, discuss the challenges in implementing this ambitious plan. They believe Digital India can be a reality only if basic infrastructure is in place and regulatory issues are swiftly addressed. Excerpts from the discussion moderated by R Jagannathan, Forbes India’s editor-in-chief:
R Jagannathan: Mr Husain, what does Digital India mean to you and what should be the government’s priority in connection with that?
Bazmi Husain: Digital India should mean more growth. It should also mean that the ease of doing business improves and gets streamlined.
Sunil Mathur: As part of the ‘Make in India’ campaign, the prime minister talks of inclusive growth and improving the share of manufacturing from 16 percent to 25 percent of the GDP. This would mean about Rs 500 billion to a trillion of expenditure in the manufacturing sector. If this has to happen, India will have to become the world’s manufacturing hub at some point. It can only happen with digitisation, but we will have to provide high quality, precision equipment. The ‘power for all’ vision cannot happen without digitisation. It is the underlying foundation even for the smart cities programmes.
Jagannathan: Mr Kapania, what should be the government’s priority for Digital India in terms of a policy thrust?
Himanshu Kapania: There have been long discussions about what has failed in India and very little regarding what has succeeded. Take mobility and its impact on Indian society: From an era of unconnected India, we have moved to one of a connected India; now we move from the era of a connected India to that of a broadband India where we are discussing internet and equality of internet for all. There are 6-7 million Indians who use broadband services. I was in China recently where I met their government officials and four top telecom operators. They said they had spent $35 billion in 2014 to build mobile broadband infrastructure for 4G services. India had spent $32 billion. But they spent this money on capital equipment to roll out 4G, while India spent $29 billion to buy spectrum and $3 billion towards capex. So the furore in India is regarding call drops and the ability to stay connected.
The challenge in India is that somebody in the ecosystem is sucking away the money to not allow the supply to build up. But it is only a matter of time before infrastructure catches up in the broadband space.
In three to four years, at least 700-800 million people in India will see high-speed broadband of 5 to 10 Mbps. It will be a reality. But the transition from one technology to another will be painful. Once the broadband services and devices are available, there will be dormant penetration. A World Bank estimate says with 10 percent dormant penetration, GDP levels will improve at an average of 2.5 percent. Once broadband connectivity improves, IT services will become more important. The large innovation will be the arrival of broadband and payments [solutions].
The banking system largely serves only high net worth individuals; 600 million Indians are unbanked. If India has to have a big digital programme which is successful, the entire payment system has to be transitioned and a massive micro-payment system has to evolve.
Husain: The impression should not be that there is something against digitisation. We should not just jump on the train and be left behind. We have to understand that first the country needs basics to be put in place, which includes physical infrastructure and regulatory issues. We have to understand that digitisation becomes an enabler of a better quality of life not a giver. The problem is that this country has no privacy policy. The government can do what it wants relating to data and there is nobody to stop it. We should be concerned that all this information will be available to be hacked into by anyone.
(This story appears in the 04 September, 2015 issue of Forbes India. To visit our Archives, click here.)