Let’s get digital

The Digital India Mission launched recently by the Prime Minister is a decisive step towards digital transformation of the Indian economy. Until now, the country has benefited indirectly from the information and communication technology (ICT) revolution. While the IT sector has created a large volume of skilled jobs and shored up of foreign exchange reserves, the economy did not take full advantage of its potential to enhance productivity in other sectors. For instance, in the US, the non-farm business sector witnessed an annual average productivity growth of 2.5 per cent between 1991 and 2007 vis-a-vis the trend of 1.5 per cent in the 15 years preceding it. ICT was indeed the dominant contributor to this transformation.

Digital India (DI) is a much needed complement for the success of the Make in India campaign and the Smart Cities programme. While the country has built a vast reservoir of information technology talent, it has not been able to trigger its multiplier effects in the economy primarily due to infrastructural constraints. On the Networked Readiness Index 2015 of the World Economic Forum, India ranks 89, a good 27 points below China. Our score in digital infrastructure is 2.6 out of 10.

The heartening part of the Digital India campaign is the investment commitment, made by both the government and private sector, amounting to over ₹5.5 lakh crore.

Timely completion of the ongoing National Optic Fibre Network (NOFN) project will be one of the most critical requirements for not only connecting the 2,50,000 gram panchayats but also to provide the massive information super highways needed for meeting the phenomenal increase in data flows. The shift from voice to data and from analog to digital, and the unprecedented explosion in visual communications, are already placing huge demands on the network. The emerging internet proliferation will only add to this demand.

NOFN is still riddled with uncertainties, particularly in the case of the Right of Way (RoW) issue, which is in the hands of State Governments. How do we insulate the project from political and business uncertainties?

No doubt, innovations in network technologies such as 4G is helping push ten times more data through the same limited spectrum. Even so, the zettabytes of data that will flow out of digital transformation cannot be handled without a substantial step-up in the network capacities. Even 4G transmission will require upgraded mobile infrastructure. Another critical requirement of digitalisation is the interconnection infrastructure. Data integration is what defines digitalisation: we would now need to move massive volumes of data seamlessly across all types of communication networks.

Costs and consumption

Creating network capacities and interconnection infrastructure is just one part of the story. Indeed, robust cloud data centres are absolutely inevitable for facilitating the efficient use of the information super highways. In fact, when Google established its data centre recently in Singapore, users in India reportedly experienced about 30 per cent increased access speeds. However, data centres can cost anywhere between $100 million to a billion in investments. Another notable feature is the consumption of massive amounts of energy. The cost of electricity is a critical success factor for data centres.

While the Digital India project focuses more on supply-side issues, there are significant challenges on the demand side too. How do we address the issue of an ecosystem that is not mature enough and which may result in low uptake? How do we infuse parameters of speed, efficiency and good governance into the project?

Digital India is a mission with great promise. It can certainly rev up productivity levels and bring down transaction costs. The plan for building easy, effective and economical governance services can, indeed, be a game-changer for the economy.

The writer is the director-general of Infrastructure Industry and Logistics Federation of India

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