Digitization And The Changing Rural Landscape Economy Is Undergoing Through A Sea-Change


The Digital India Programme has been launched with an aim of transforming the country into a digitally empowered society and knowledge economy. The Digital India would ensure that Government services are available to citizens electronically. It would also bring in public accountability through mandated delivery of government’s services electronically; a Unique ID and e-Pramaan based on authentic and standard based interoperable and integrated government applications and data basis.

In the wake of demonetization, Digital India no longer seems like such a distant dream. Prashanto Roy, VP and Head, NASSCOM Internet Mobile and E-commerce, said that India before demonetization had 78 percent of cash transactions by gross revenue and the remaining 22 percent came from RTGS, IMPS, and mobile wallets. A data shows that in the three weeks since demonetization, the number has come down to just 20 percent, with an increasing number of people using mobile wallets for payments.

However, accessibility is still a huge challenge in digital India because although a billion users are online, only a small fraction is actually online in a meaningful way. Out of a billion mobile subscribers, 350 million are internet users, of which 90 percent use a mobile device. The top three apps in India by monthly average download are WhatsApp, Facebook, and Messenger. 

Radius of Digitalization of India

Radius of digital India is a core concept of the developmental aspects. Though the initiative has great impact, the path doesn’t seem to be a cakewalk. Despite of a population of 125 crores, only 30 crore people have access to smartphones. Only very few of the rest 90 crore people have access to digital world. Unlike rural areas, large percentage of urban areas have high access to digital world. Rural areas fall short both in access and understanding of the digital world. Government is launching various policies and programmes with digital access.

Yet, in doing it is quite hard to for Digitalization of India to the extent we imagine. In 2013, India stood at 68th position in readiness digitized market. Currently we stand at 91st position. These statistics prove our mission of digitalization is not going as per our planned. Amidst these conditions, the government has to step up and further steps. Most of the citizens are unaware of the Government policies and programmes of digitalization.

To note a few:

  • Soil health card for farmers
  • SMS based mid-day meal app for government schools
  • e-Pathshala for students
  • Nirbhaya app for safety of women
  • Though these are one of the significant steps of the government, not many are aware of these apps. The awareness of these apps in the society is very low.
  • Promoting and providing easy and affordable access to the digital world would one of the best.

How India is alleviating the country’s digital divide.

Once upon a time internet connectivity was a luxury for a nation. Today, in order to become economically stronger, countries need Wi-Fi, training and equipment. While India is a leader in IT, the country has a steep digital divide, due mainly to lack of internet penetration in rural areas. Without connectivity, farmers and small business owners in rural India don’t have access to proper healthcare, education or financial inclusion. For this reason, leaders of India are calling for a digital revolution.

In 2014, less than 20% of India’s 1.2 billion population used the Internet. A major obstacle to access is cost. However, thanks to a new program, The Indian market is set to explode over the next few years as the country enters a new digitization phase the Indian market is set to explode over the next few years as the country enters a new digitization phase. In July of 2015 the government of India launched the national “Digital India” initiative to make government services available to citizens electronically by bolstering internet connectivity and improving online infrastructure. A top priority of the administration of Prime Minister Narendra Modi, the plan aims to connect rural areas with high-speed networks and promote digital literacy.

How will Digital India be achieved?

Dinesh Malkani, President, Cisco India & SAARC said that The Digital India program is focusing on the development of broadband highways that will cover 250,000 local governments by December 2016 the Digital India program is focusing on the development of broadband highways that will cover 250,000 local governments by December 2016 and that this penetration will allow technology-enabled services to reach remote parts of the country. The government is also concentrating on mobile connectivity. Malkani said that by 2018, more than 40,000 villages are likely to be under the banner of mobile technology.

Facebook is helping push the program forward by partnering with an Indian state-owned telecommunications company, Bharat Sanchar Nigam Ltd. (BSNL) to create 100 Wi-Fi hotspots in rural India. The company has selected 100 villages to provide these hotspots on a revenue sharing model. The Times of India reported that during the West Zone Vice-Chancellors Conference, former director of BITS Pilani engineering college, G Raghuram, said the Digital India initiative can be accomplished through higher education and social media. “We need an online platform to design courses effectively, and social media to make teaching an easier and effective practice,” he said.

Association of Indian Universities General Secretary Furqan Qamar, in his presidential address, said that online courses at universities will help the cause, making it “compulsory” for teachers to be equipped with new technology.

Blueprint of a Digital India

The next billion consumers in India will be driven by:

  1. Broadband in every home
  2. Rapid adoption of mobility
  3. Citizen services
  4. Young workforce
  5. The App economy
  6. Social media
  7. Learning and education
  8. Digital entertainment

Through digital economies and digital identities the economy will be far more transparent, opening up new opportunities in the areas of:

  1. New Government infrastructure
  2. Smart cities
  3. E-government & citizen services
  4. National broadband
  5. Cable digitization
  6. Mobility (4G/LTE)
  7. Tier III town & rural expansion
  8. Public Safety & IoT
  9. WIFI to schools & connected classrooms

Through the government’s Digital India program, infrastructure will be offered as a utility to every citizen, governance and services will be on demand and citizens will be digitally empowered. Industry estimates suggest that by 2020 there will be 140 million Indians who don’t currently use banks that will have access to mobile financial services, and 75 million children with online access to education. The government’s National Optical Fiber Network program has gathered momentum and Cisco India believes that with the right services and applications, broadband to villages can transform the delivery and consumption of citizen services.

Digitization of Economy

When it comes to payments, the secure way of transacting digitally is through smartphones and not feature phones because SMS is very unsafe. Now when it comes to connectivity, it triggered one question: how will the smartphones connect? If it is via 4G, then there should be enough spectrum for the same. But if one looks at the social pyramid of a billion mobile users, there is a huge section of illiterate masses on the way down the structure.

Though the adoption of digital payments has witnessed a rise, the payments themselves remain an issue. According to Priya Karnik, ‎Vice President — Business, at Paytm, digital payments have various aspects like connectivity, serving customers digitally, and digital literacy.

She said, “In financial services, we have to be very cognizant in terms of what have we achieved so far. We have more than a billion people with Aadhaar as an identity. India Stack is the foundation for us to launch financial services digitally and the Jan-Dhan Yojana. By mobile banking we don’t mean that we are accessing the banking interface via mobile, mobile payment goes beyond where we can use it commerce.”

Paytm currently has over 150 million registered wallet users and one billion offline merchants and performs seven million transactions a day. Priya emphasized that today, everyone from the chaiwala and kirana stores to the tender coconut water guy is accepting payment digitally. This revolution is creating a lot of opportunities for financial services providers which offer various financial services like micro lending, micro insurance, etc.

Addressing the issue of local languages has also become crucial in terms of reaching the rural and semi-urban areas. Therefore, Paytm recently launched a multilingual interface in 10 languages to overcome language barriers, enabling people to shop and pay in regional languages. The user interface will be available on Android in 10 different regional languages like Hindi, Tamil, Telugu, Gujarati, Marathi, Bengali, Kannada, Malayalam, Oriya, and Punjabi.

Challenges in Digital Transactions

The key to the Digital India initiative is accessibility, which can be divided into two verticals — wired and wireless connectivity. The delivery of internet has to be seamless, affordable, and widely available. India’s position in the world of broadband services has been elevated with consumers’ changing preferences towards internet adoption.

Bala Malladi, CEO, ACT Fibernet, said,If you want people to come on the digital bandwagon, you need to give a good experience, which comes from trial and adaptation. The trial is something we need to generate at both the government level and private level. The best way to make people experience something that they haven’t done earlier is through Wi-Fi. If you go to any Wi-Fi hotspot zone assuming that the backend technology is robust enough, this is a wonderful experience. The trial should be done with a little bit of adaptation and there is no other option but to have the backhaul network. I don’t see any alternative other than connecting and getting a reach to every village.”

Rural India and Digitization

The Indian economy is predominantly rural with over two-thirds of its population and workforce residing in rural areas. Rural India contributes a substantial part of the total net value added in many sectors, with an overall 46% contribution to our national income. With a population of 833 million people (which incidentally is larger than rural China) residing in 640,867 villages, it is projected that, by 2050, more than half of India’s population will still be rural, despite rising urbanization. Thus, the growth and development of the rural economy is imperative for inclusive development and overall growth of the country.

With increasing contribution to development and exposure to needs, the buying capacity of rural Indians has taken a sharp upward turn. However, rural consumers have a strong value-for-money orientation, significant local cultural affinity, and a more conservative financial outlook. Their purchasing aspirations are often constrained by easy availability. Digitization and technology can facilitate access and availability of more and more services and products be made available to meet the rising aspirations of the underserved and unreached rural India. This is being driven strongly through the government’s Digital India programme. One of the key enablers is the growing internet penetration, expected to grow from 25% in 2016 to 55% by 2025.

Rural India is expected to leapfrog urban India and constitute nearly half of all Indian internet users by 2020. Digitization can facilitate some of the key needs of rural India including e-governance services, banking and financial services, educational and healthcare services, mobile/DTH recharge, e-ticketing services, online shopping, etc. Over 10 years ago, the government, through its flagship National e-Governance Plan, envisaged to empower rural citizens by making available various government services to them via electronic media and created access points, i.e. common service centres run by village-level entrepreneurs (VLEs) at the village and gram panchayat level.

These ‘brick and click’ centres act as one-stop digital outlets providing both government and business services to rural citizens. Keeping in mind the evolving needs of rural citizens, the service portfolio available at these centres has gradually expanded beyond government services to banking, financial services, mobile top-ups, electricity payments, railway bookings, e-learning and e-commerce. Financial inclusion is an important priority of the government. Only 38% of the 117,200 branches of scheduled commercial banks are working in rural areas, and a meagre 40% of the households have bank accounts. Thus, India is home to 19% of the world’s unbanked population.

This gap at the last-mile is being filled by banks through a combination of finance and technology enabled by business correspondent agents at these Kendras where customers can open accounts and do normal banking transactions. To further enable mass transactions, AePS (Aadhaar-enabled Payment System) has been launched wherein rural citizens can perform simple banking transactions like deposit and withdrawal through their biometric ID and Aadhaar number at any of the AePS Kendra. Adoption of financial services like life, motor and health insurance by rural consumers is a challenge, considering their difficulty in understanding the need and importance of such an insurance cover; it is also time-consuming.

But with technology and processes becoming easier online, common service centres are playing an important role in furthering the adoption of financial services. Digital payment is another basic need—for mobile phones, DTH or electricity bills. With options being available at their doorstep through common service centres, villagers can do top-ups or pay bills at the click of a button. Besides, with growing awareness of e-commerce, rural consumers are seeking such online shopping options that are currently available only to their urban counterparts.

E-commerce portals with a focused approach to cater to the needs of rural population are gaining popularity. This is only the beginning of a new wave that is impacting the bottom of the pyramid. While on one hand demonetization paved the path for quicker adoption of digital payments, on the other there are several start-ups with novel solutions in digital learning and tele-medicine knocking on the doors of the rural consumer. This rural awakening is also creating fresh opportunities for rural entrepreneurship, wherein the rural youth are seen providing digital services to their brethren, ensuring quicker adoption of such services.

How will Digital India affect social change?

As Digital India becomes a reality, the next one billion consumers will drive unprecedented technological, social and economic transformation in the country. New digital infrastructure will enable digital inclusion for people, create a society with minimal digital divide and unleash a tremendous amount of entrepreneurship, innovation and creativity. In addition to aiding education and business, the proliferation of ICT is creating pathways for open government, or e-governance, in India. In other words, technology and connectivity can help the government become more transparent and accountable.

The E-Governance plan of India was created to make all government services available to citizens through electronic media. Digital India aims to develop this plan by designing e-governance applications that make all the information and services accessible in real-time across multiple devices. To enhance this program and foster participation, the Department of Electronics and Information Technology launched a national platform named myGov. With 1.6 million members on board so far, it looks like India is indeed ready for a digital revolution.

The changes that have and are to come

To change that scenario, the current government bodies are focusing on providing digital access to the rural people. In doing so, Digitalization of India would be much easier to achieve. The success lies in passing digital vibes to the grass root levels. For which the citizens and the government must work hand in hand.

The recent scenario of Demonetization has moved huge crowds towards digitalization. People who had access to digital platform did it see as a major burden. Because, they were able to go through day-to-day transactions with apps like Paytm and e-banking’s. It brought unavoidable situation for people to switch to digital world. Despite many hurdles, India is on a great pace towards its digital destination.

If this journey continues, the DIGITAL India is only few miles away. The responsibility also lies in the hands of young Indians and entrepreneurs. They must show carry forward our dream of Digitalization of India to future generations.

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