With the second largest online market in the world, cheapest data rates, and the fastest growing fintech landscape, India is in the midst of a massive digital transformation. This is the good news. But not the whole story.
India’s digital acceleration has also created the potential for new divides. For instance, inequitable access to technology has exacerbated the divide in the ability to work from home, as well as in learning outcomes for children during the pandemic. Recent surveys have pointed out the systemic lacunae with Aadhaar-based digitisation of social security programmes — biometric mismatches or non-possession of Aadhaar can result in denial of benefits.
Poor access to smart devices and internet services can worsen inequalities in income and opportunities.
The State of India’s Digital Economy Report had highlighted the role of missing analogue foundations that support and drive the digital economy. This includes physical and social infrastructure. For instance, poor power supply impacts the quality of internet access. Usage gap on the other hand, is driven by poor levels of literacy, affordability and lack of digital skills. These challenges have not gone unnoticed.
The Indian government has set a target to provide 4G network to all uncovered villages by 2024. Digital literacy initiatives are being strengthened for various target groups to skill, upskill and reskill users through training, internships and apprenticeship programmes. The government is also working towards addressing the weakness of the ecosystem exposed through rising cyber crimes and financial frauds by raising awareness and building technical security. The recent launch of Sanchar Saathi is one such initiative.
With India Stack, the country has established itself as a trailblazer for Digital Public Infrastructure, deploying technology at population scale to manage identity verification, make payments and exchange data. However, the metrics of digital ambition must not be restricted to the number of new technologies or programmes and their users, but the impact it has on the lives of people. As is often said, technology is the easy part, making it work for people is the bigger challenge. Chasing targets on the number of users and network participants must expand to include outcomes on financial security, health benefits and better living.
As India approaches its 100th year of independence, digital ecosystems will become inseparable from economic growth. Policies and digital strategies of today will have long lasting impact. There are four principles that policy makers could consider.
One, not everything needs a digital solution, especially when the building blocks are not ready. A software is available for everything, but why and what we are building needs careful examination. The preoccupation with “digital only” must be challenged.
Second is the need for consultative policy making that keeps beneficiaries at the centre of the process. Despite the government’s efforts, very often those who are impacted by technology are unable to participate effectively. Efforts should be made to strengthen the consultation process, moving towards a ground-up approach to policy formulation.
Third, focus on adaptive policy and agile regulatory frameworks. Policy makers and regulators have been playing catch up with rapidly evolving technologies and changes in business models. The paradigmatic shift in economic thinking on competition regulation of digital markets and its interaction with other areas of consumer protection and data privacy suggests that regulatory innovation is imperative. Emerging trends in regulatory sandboxing, participative or co-regulation, are instruments that governments need to foster.
Finally, policy should be grounded in evidence. Data on the digital economy is inadequate for any meaningful analysis or assessment of the digital ecosystem. Even basic data on internet users or smartphone users is available intermittently through government surveys. One has to rely on private sector sources and scattered surveys to arrive at guesstimates. The success of any transformative process rests on transparency, regular monitoring and impact assessments, which must be institutionalised. Building accountability for such transformational changes can help establish trust and long-term sustainability.
The writer is Senior Fellow, IPCIDE and ICRIER. Views are personal. This article is part of an ongoing series, which began on August 15, by women who have made a mark, across sectors