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The new fiscal year promises exciting opportunities for the Indian economy, which is scheduled to bring in a game-changing new reform in the form of the Goods & Services Tax. Expectations of wider economic reforms, new measures to improve the ease of doing business in India and higher infrastructure investments also augur well for the prospects of economic growth of India, which is the fastest growing major economy in the world today.
Signals emanating from the global economy are also positive. According to economists, 2017 is witnessing synchronous recovery in global growth for the first time since the recession in 2010. Emerging economies remain the main driver of the strengthening global outlook, as they continue to contribute more than three-quarters of total global GDP growth in 2017, according to the International Monetary Fund.
As conditions look favourable for the economy growing at a faster clip, it is time for India to revisit its aspirations of double-digit GDP growth. If we are really serious about achieving this growth pace, we need to focus on the mission of Digital India and leverage the transformative power of a technology-driven economy.
Digital India Can Transform Lives & Boost Growth
We all know that India suffers from a huge infrastructure deficit. It is estimated that India’s infrastructure could require an investment of up to US$1.7 trillion by the end of the decade, as per the World Bank report.
Investing heavily on infrastructure has time and again proved to be one of the most successful recipes for accelerated economic growth. However, we also know it requires huge capital investment and has a long gestation period. Nevertheless, it cannot be ignored for long. To leapfrog India’s traditional deficit in physical infrastructure, we need to urgently invest in building a strong Information & Communication Technology (ICT) backbone, which will present many unique opportunities by enabling businesses in the areas of financial services, education, healthcare, agriculture, retail etc. and will improve economic conditions in remote areas. Above all, digital infrastructure growth can empower the government to embrace and enable innovation, provide resources to help increase agricultural productivity as well as enable universal healthcare access. It can also bring financial services to the unbanked rural and underprivileged communities and help fulfil the country’s longstanding goal of ‘education for all’.
India, like the rest of the world, is witnessing a rapid adoption of digital payments. This is being driven by deeper mobile phone penetration, concerted policy action by the Reserve Bank of India and government initiatives like Aadhaar and Jan Dhan Yojana. Demonetisation has also given a decisive push to the adoption of digital payments.
As millions of these Indians adopt digital payment methods they will be able to connect to the formal financial sector as customers and suppliers.
A report published by the McKinsey Global Institute (MGI) says increased use of technology in the realm of Financial Services could give 300 million Indians access to banking services by 2025 and raise their incomes by up to 30% thanks to better access to credit and the ability to save and make remittances.
The McKinsey report also estimates that remote learning, massive open online courses (MOOCs) and other digital systems could have an economic impact of US$ 60 billion to US$ 90 billion a year by 2025 thanks to higher productivity among a larger number of skilled workers. India could have about 24 million more high-school and college-educated workers and 18 million to 33 million more vocationally trained workers by 2025 as a result of digitization in the education sector.
Disruptive technologies could transform the delivery of public health through remote health services and digitally enabled healthcare workers who can link specialists with patients in rural areas.
A modern ICT-based universal healthcare system will help leverage modern diagnostics in primary healthcare for early detection and treatment, and telemedicine to bridge the deficit of specialists at the primary care level. They can also be used for cloud based data collection to collate epidemiological and patient centric data to profile and map the disease burden at the level of the smallest administrative unit.
Comprehensive data bases and disease registries will enable better evaluation of the incidence and diversity of diseases at an epidemiological level and thereby allow for more effective healthcare interventions. This can, in turn, ensure equitable access to healthcare services of assured quality, safety, efficacy and cost effectiveness to all sections of the society.
An ICT-based health delivery model will need strong integration between primary and tertiary care providers. Also, linkages need to be established between health research and national health programs to ensure research findings are leveraged in decision making in public health.
By 2025, some 400 million of India's poor could get access to better healthcare through technologies that bring medical expertise to modestly skilled health workers in remote areas.
Technology applications in the area of agriculture, like the use of hybrid and GM crops, precision farming, and mobile Internet–based farm-extension and market-information services could raise the incomes of as many as 100 million farmers and bring better nutrition to 300 million to 400 million consumers by 2025.
In the area of energy, smart metering could save US$15-US$20 billion a year by 2025 in reduced transmission losses. Technology can also be used to address India’s infrastructure deficit, with McKinsey estimating these interventions could help India build 10 million more affordable homes by 2025.
Digital India has a huge role to play in spurring economic growth. India needs to embrace technology to deliver superior and sustainable solutions for a better life and a brighter future and ignite the entrepreneurial energy of today’s youth. If India can leverage the transformational power of technology through innovation, human ingenuity and, above all, effective leadership, it will be able to achieve sustainable double-digit economic growth.
Kiran Mazumdar - Shaw