Abstract:
Technology has come a long way in the booming economy of India, but there still remains a large section of people to be introduced to the interconnected world of gadgets. Through this study, an attempt has been made to map out the journey of digital transformation of India throughout the years, and how technology has made life so much easier for the citizens of the country. The concept of power has significantly changed in recent years, and he who now has information the earliest is proclaimed to be the most powerful, whereas he who does not have access to information is disregarded. The concept of Digital Inclusion has gained prevalence in the 21st Century, with technology creating millions of jobs and being used in all spheres, all the way from banking to farming to defense. This study aims at highlighting the journey of Digital Inclusion in India, and how the Indian economy has massively benefited from a concept whose hindrances made it solely reserved for the upper classes merely 25 years ago.
I. HISTORY
It was a historic moment for India on 31st July 1995 when the first mobile phone call was made by then West Bengal Chief Minister, Jyoti Basu and then Union Telecom Minister, Sukh Ram. During those times only the rich could afford phone services which cost an enormous amount of Rs. 24 for every call. The introduction of digital devices in our times has made the flow of information much faster and easier compared to the past.
Digital Inclusion refers to the ability of individuals and groups to access and use information and communication technologies. People have been connected for a long time now, but it is only in the most recent 200 years that we have started using technology to connect with people. Almost 30 years ago, we started to computerize processes and implement digital activities in our organizations.
The journey towards a digital world started with the advent of the Telegraph in 1832. Since the departure of IBM launched smartphone “Simon”, there has been an exponential advancement in the level of technology in virtually every country in the world. In the early 2000s, the world saw the rise of technology to unexpected heights, with the fad of websites leading to the Dot-Com Crash of 2001. Below is a flowchart to depict the progress of digitization over the ages:
At first, digital channels or websites connected companies and their customers. After that, digital processes emerged to support customer interactions. As companies’ digital ambitions quickly grew, they soon needed dedicated digital teams to manage new social and mobile channels. This enabled organizations to leverage digital data on their activities and interactions. Connected to customers, suppliers, and other stakeholders, companies realized that they operated in digital networks. To make better use of the vast amounts of information, companies started to connect all processes and devices into networks. Seeing potential in connectivity, organizations focused on digital platforms connecting all system players rather than the traditional method of doing business through intermediaries. Companies began to experiment with new digital ways of doing business, trying to leverage data more effectively, create greater agility, and retain talent.
II. ECONOMIES OF DIGITAL INCLUSION
Earlier, the high prices of smartphones and internet connections restricted its availability to upper-middle and upper-class people only. With the launch of the first iPhone in 2007, new standards for a smartphone was set. However, the revolutionary iPhone quickly gained popularity although it was highly-priced. Looking at the lucrative prospects ahead, it incited other players to introduce cheaper phones into the market and make it available to the majorities that were left without a smart device due to the then high prices.
Gradually, India saw the rise of low-cost smartphone brands gaining traction among the masses, the peak of which was in 2015. Micromax, Lava, Intex and Karbonn were the Indian brands offering quality feature phones at sub-7000 ranges. Then with the entry of Xiaomi offering flagship-level features at 1/3rd the price of top-notch brands, the smartphone market began expanding aggressively. Handsets were available in the hands of people who previously could not think of affording a smartphone, and everybody was connected to the network.
In the early 2000s, the economic condition of Indians was not too great, with the GDP of the country being around $480 Billion. With time, the GDP of India has grown at an average rate of 6.51% for the past 20 years. This is seen as a positive sign for the citizens of the country, as a high GDP growth rate generally indicates an increase in the standard of living as well as literacy rates. In a span of 20 years, we have seen a meteoric rise in these figures, and India’s GDP currently stands at $2.7 Trillion, a 563% rise in absolute amounts.
The purchasing power of the poorer sections of the society has increased greatly, and they are now able to afford much more than they could back in the early 2000s. This positive change is reflected in the rush for Digital Inclusion in India, as a higher purchasing power along with a decrease in costs of the internet to an all-time low, along with cheaper mobile devices available in the country has enabled more people to be connected to the network.
The introduction of Wi-Fi for the masses was also a major advancement, making the internet much more affordable to people at a time when mobile data prices were sky high at Rs.250-400/GB. This offered better connectivity at cheaper rates to the citizens of India, and it gained popularity among people who had high-data requirements for their work or leisure. The launch of the 4G VoLTE technology also acted as a catalyst, reducing disruptions in network connections over call and improving connectivity quality.
Mobile data prices have also tanked through the years as telecom operators started focusing on economies of scale and expanded their horizon by reducing their prices to harvest the untapped potential of the millions of Indians without access to the internet. The following graph demonstrates the fall of data prices per gigabyte throughout the years.
III. RACE BETWEEN CORPORATES TO WIN THE DIGITAL MARKET
Companies that innovate and digitize rapidly will be in a better position to take advantage of India’s large market and so is the case of Jio.
When Jio launched its 4G services in India in 2016, it practically demolished the remaining businesses which thrived on offering 2G and 3G services. Reliance Jio’s debut may have made telecom firms edgy but consumers aren’t complaining. The intense price war before RJio’s debut has unleashed attractive internet data offers by telecom providers who are now doing everything to ensure their customers don’t switch.
Bharti Airtel acquired Telenor India and Tata Teleservices Ltd. In 2017, Reliance Communications had to shut down its operations after a failed merger with Aircel Ltd. Vodafone and Idea Cellular completed their merger in 2018, post which the Indian Mobile Market has turned into a four-player market, which Jio leads, followed by Airtel, Vodafone-Idea and BSNL.
In the meantime, various CSR activities taken up by big organizations have assisted in connecting the farmers of our country to a larger network, like the E-Choupal initiative by ITC Ltd. Village internet kiosks – E-Choupals – made real-time, up-to-date, relevant information on weather, price discovery, Agri knowhow and best practices, etc. readily available to the farmers of a village. The kiosks are managed by trained local farmers who help the local agricultural community to access the information in their local language.
Through this initiative, farmers have been able to raise productivity, improve quality, manage risk and earn better prices, as well as reduce transaction costs.
IV. INITIATIVES TAKEN BY GOVERNMENT
The digital reset of the Indian economy has seeped into almost every aspect of life. Almost every Indian now has the digitally authenticated Aadhar identification number. A disruptive combination of technology and business model resulted in the ‘JAM’ trinity. This is an acronym for Jan Dhan Yojna, Aadhaar and Mobile.
Although people have started adapting to technology to get their work done, there is still a major gap between the old generation and the new process of how things are done. As of date, over 35% of the Indian population is above the age of 35, and the current technology was introduced in the late 2000s, well after a big chunk of their lives had passed. This evokes a concern for the section of the population which is not as fluent as the current generation in matters of tech, and increases the divide which the current run for digital inclusion aims to shut down.
With the advent of fintech, a major chunk of the operations which were carried out by manual labour in the earlier days has been omitted from the process, and the entire industry has adapted to a self-help nature, with customer service aiding the people in adverse cases. The whole nature and objective of Fintech is to integrate technology into finances for faster working of the entire system, and make it more convenient and user friendly, and certain measures were taken by the Indian Government to ensure ease of business through digital measures.
With this, India pursued the digital trail and brought to its citizens payment options like BHIM (Bharat Interface for Money) and RuPay scheme, which opened up the fintech revolution. RBI data shows that India is now clocking around 100 million digital transactions a day with a volume of 5 trillion rupees ($67 billion), about a five-times jump from 2016. RBI expects this to further grow five-fold to 1.5 billion transactions a day worth 15 trillion rupees ($200 billion). Much of this is powered by the United Payment Interface (UPI), a real-time payment system developed by the National Payments Corporation of India and monitored by RBI.
All these measures have helped in uplifting the society as a whole, empowering every section to live and lead a better life, while simultaneously being connected in real-time to the world. In many parts of the country, ordinary people can now read the news online, order food via an app, stream movies online, video chat, shop virtually and send money online. Thus, digitalization and technology are playing a crucial role in ensuring the efficient last-mile delivery of services to citizens.
The Department of Science and Technology (DST) and the Department of Electronics and Information Technology (DeitY) are working together to make India one of the world leaders in supercomputing. The aim is to enhance India’s capability in solving challenges of national and global relevance by pouring over Rs 4,500 crore over the next seven years. India’s goal is to ensure not only it benefits from the next wave of innovation, but leads it.
The fifth generation of mobile network communication technology or 5G holds the promise of applications with high social and economic value, leading to a ‘hyper-connected society’ with exponentially high network data speeds. Government of India envisions to put forth India as a globally synchronized participant in the design, development and manufacturing of 5G based technologies, products and applications. A multi-disciplinary high-level forum has been constituted by the government to suggest vision, mission and goals for 5G India 2020 along with action plan and roadmap. It will add a new dimension to projects like Digital India and Smart Cities. Many mobile companies are preparing to launch 5G phones in the country.
V. PRIVATE SECTOR INNOVATION REVOLUTIONIZING THE DIGITAL SECTOR
India is on its way to becoming a digitally advanced country. With more than half a billion internet subscribers, India is one of the largest and fastest-growing markets for digital consumers.
Digital is uplifting our country towards advancement and filling gaps owing to physical infrastructure. The Facebook-Jio deal aims to empower nearly three crores Kirana shops by bringing them into e-commerce fold through the collaboration of JioMart and WhatsApp.
Private sector innovation has made online usage more accessible by bringing internet-enabled services to millions of consumers. According to telecom gear maker Ericsson, Indians used about 12 GB data per month on average in 2019, the highest consumption globally, and this is expected to more than double over the next five years to 25 GB data per month. Looking at the potential of the market, Reliance Jio and Google has entered into a smartphone deal which has paved the way for low-cost smartphones combined with affordable data, and world-class telecom infrastructure.
Data costs have dropped by more than 95 per cent since 2013, and fixed-line download speeds quadrupled between 2014 and 2017. As a result, mobile data consumption per user grew by 152 per cent annually, which is more than twice the rates in the US and China. In the context of rapidly improving technology and falling data costs, technology-enabled business models could become pervasive over the next decade. That will likely create significant economic value which could include up to 700 million smartphone users and 840 million internet users by 2023.
There’s no doubt that we are facing a difficult moment today, in India and around the world. The dual challenges to our health and our economies have forced us to rethink how we work and how we live. But times of challenge can lead to incredible moments of innovation. Artificial intelligence (AI), machine learning (ML), Internet of Things (IoT) and robotic process automation (RPA) are among the technologies that will make the fourth Industrial Revolution i.e. Industry 4.0.
VI. CONCLUSION
Despite these advances, India has a lot of potential to grow. Only about 40 per cent of the population has an active internet connection and 4 percent of Indian households have a fixed broadband. Still, 90 per cent of all retail transactions in India are made with cash, although many people have digital bank accounts. E-commerce revenue is growing by more than 25 to 30 per cent per year, yet only 5 percent of trade in India is done online. Looking ahead, India’s digital consumers are self-assured for robust growth.
For a long time, India’s development in the digital segment was unjust and erratic. Although, India has ensured digital access, digital infrastructure, digital empowerment and bridging of digital divide with the common thread of digital inclusion, but still it has a long way to go. By 2025, India has the potential to become a trillion-dollar digital economy, and as a result, India’s digital footprint is one of the fastest-growing in the world. The country is transforming into a knowledge-based economy and digitally empowered society based on technology that is inclusive, affordable and sustainable. However, these technological advancements have also brought innumerable social challenges in front of us which can be dealt with the union of administrative humility and entrepreneurial determination and by working together, we can ensure that our best days are still ahead.
Contributed by: Ronit Bala & Mudit Somani
(Ronit Bala is a second year student pursuing Bachelor of Commerce(H) at St. Xavier’s College (Autonomous), Kolkata and a Junior Associate of the Xavier’s Finance Community.)
(Mudit Somani is a second year student pursuing Bachelor of Commerce(H) at St. Xavier’s College (Autonomous), Kolkata and a Junior Associate of the Xavier’s Finance Community.)