by Sudhir Narasimhan

Digital economy proposal: The devil is in the details

Feb 01, 2017
BudgetingBusinessComputer Components

While the union budget 2017 proposed some highly ambitious digital initiatives, their implementation is ridden with numerous challenges.

There was a time when the union budget was an eagerly anticipated event within the IT industry. In those days the industry was mostly hardware driven with a fledgling software services sector making up for the rest. In those pre-liberalization days the industry would look for tax sops and import duty reductions on components. 

With liberalization and the entry of global players into India the focus shifted from hardware screwdriver assembly to software services. As the industry and the domestic market both grew by leaps and bounds the dependency on government policies decreased over the years and industry expectations from the government shifted to other issues like infrastructure and ease of doing business.

A few days ago, when we tried to understand the industry’s expectations from budget 2017 no one expected the government to dole out tax or other concessions. The expectations were more in terms of boosting technology and associated infrastructure. Now that the budget is out it’s apparent that the government too has been thinking along the same lines.  

[Related: Budget 2017 packs a massive digital push]

It seems digital is the flavor of the season as this budget aims for grass root level connectivity in a bid to transform India into a digital economy. The Aadhar Pay app to reach those without mobile phones and the common UPI app BHIM are highly ambitious initiatives considering the sheer scale and the number of people the government is targeting.  Equally ambitious is the BharatNet program which received a budget allocation of Rs.10,000 crore. With this the government plans to provide optic fiber based connectivity to 150,000 gram panchayats. The finance minister also announced DigiGaon, yet another tech driven initiative to impart education, skills and telemedicine to the masses. For the first time, the budget also proposed a cybersecurity initiative and the formation of a Computer Emergency Response Team. Apart from these the union budget proposed some common measures that would benefit all sectors including IT.  The shutting down of Foreign Investments Promotion Board should rid potential investors of one layer of bureaucratic red tape. On the overall this was a good budget that balanced the interests of the masses with those of economy.

But having said that we still need to see how all these initiatives will translate to fine print. Considering the scale, the digital initiatives are extremely ambitious. Given the penchant of our bureaucracy for planning and implementation one never knows how long these programs will take to get operational. The other issue is that of infrastructure. Already our telecom service providers are struggling to cater to existing customers due to bandwidth and other issues. It remains to be seen how they will overcome these challenges in a situation where they have to support an exponentially higher number of consumers in every nook and cranny of the country. While the budget 2017 is extremely positive in outlook, the government and the organizations that will be part of the digital initiatives have a daunting task on hand.