Business Today

Digital India: Beyond an aspiration to an imperative

In 2015, India crossed a new Internet milestone of 375 million Internet users, which exceeds the population of the US, making it the world's second largest country by the number of Internet users after China.  More than half of these users access the Internet through a mobile phone.

Rekha M. Menon        Last Updated: February 26, 2016  | 17:39 IST

Rekha M. Menon, Chairman, Accenture in India
Just a decade ago, in India, monthly bank visits were routine. We would never buy clothes without trying them on. And, we certainly never thought social networking sites that helped reconnect with long-lost friends would become engines of commerce. Yet, here we are.

In 2015, India crossed a new Internet milestone of 375 million Internet users, which exceeds the population of the US, making it the world's second largest country by the number of Internet users after China.  More than half of these users access the Internet through a mobile phone.

The important critical mass to sustain a digital economy is now a foregone conclusion. Yet, India was ranked 131 out of 167 countries in the recent Information and Communications Technology (ICT) Development Index. The ICT Development Index is based on three indicators: access, use and skills in ICT. So, what's missing?

According to Accenture Strategy research, there is a clear link between the increased use of digital technologies and greater productivity. Our research quantified the resulting impact on competitiveness and economic growth. A country's "digital density" is determined by a scorecard comprising over 50 indicators, such as the volume of transactions conducted online, the use of cloud or other technologies to streamline processes, the pervasiveness of technology skills in a company, or an economy's acceptance of new digitally driven business models. According to the analysis, increased use of digital technology could potentially add as much as $101 billion to India's GDP by 2020.

To fully realize the benefits of digitalization, the government and enterprises recognize the need to create the right ecosystem requiring huge investments in infrastructure.

But, investment alone is unlikely to usher in the digital transformation our country aspires. Neither can the government alone steer this transformation at the required pace. co-creation by industry and the government can create the ecosystem by fostering digital marketplaces, digital sourcing, digital governance and the creation of truly digital enterprises.

Here are some priority areas that need even greater stimulus and impetus, if India is to move rapidly towards a truly digital economy where cloud and mobile first business models become the status quo.

  • Facilitate the growth of digital markets and payment processing environments

Increasingly, businesses are using digital to provide products and services to their customers, sell to new audiences and collaborate with other firms. This means that virtual transactions that enable these marketplaces need to not just exist as an alternative, but thrive as the primary processing platform.

Indians are increasingly using virtual payment gateways for all monetary transactions.  According to the RBI, electronic payment systems registered high volumes in 2014-15.In all, 928 million National Electronic Funds Transfers (NEFT) transactions worth Rs 60 trillion were made in 2014-15 as against 661 million transactions worth Rs 44 trillion the previous year.

The 615 million credit card transactions valued at around Rs 1.9 trillion made during the year, too, reflect this trend. During the same period, there were 808 million debit card transactions valued at Rs 1.2 trillion.

Newer concepts like mobile banking and digital wallets are catching on quickly.  While there were 171 million mobile banking transactions valued at Rs 1 trillion during the year, digital wallets options are inspiring start-ups in a big way.

As markets move towards a true cash-less environment, more seamless integration of third-party payment wallets and other newer payments technologies need to be seamlessly enabled. Alongside, the country needs to address the challenges of financial inclusion as well as authentication and reconciliation with traditional banking systems.


  • Use digital to improve enterprise and inter-agency efficiencies:

Using digital to improve enterprise efficiencies and collaboration between government and corporate organizations is a given. This requires not just automating processes but reinventing them. And, it applies to multiple functions, from supply chains and the shop floor to R&D and citizen-government relationships.


The country has made progress in adopting technology in day-to-day operations. This is evident in the adoption of technology in departments like taxation, passports, and railways. According to World Bank estimates, the ambitious Aadhar card initiative is already saving the government $1 billion (nearly Rs 6,704 crore) annually in fuel subsidy alone. But, we still have miles to go. Some of the more daunting tasks remain in digitizing land records, judiciary, law and order, licensing etc.


  • Fast-track and implement forward-looking legislature:

In the last few years, the country has seen positive steps in drafting appropriate policies that foster a technology and knowledge-driven society.  The Digital India initiative aims to deliver good governance by synchronizing the work done by Central and State governments.  In 2015, the Government unveiled the 'GI Cloud' and IOT Policies which hinge on the use of ICT-enabled services to stimulate growth in manufacturing and digital enablement.


Indian manufacturing still lags behind in the adoption of technology to bring in efficiencies. Making key factors of production such as land, capital, talent, plant, and property accessible via digital technology improves productivity and reduces costs. Taking a step further, the adoption of the Industrial Internet of Things, will mean the intersection of people, data and intelligent machines impacting productivity and efficiency.

To truly capture new growth in manufacturing and from the Industrial Internet of Things (IIoT), companies should follow three approaches: boost revenues by increasing production, create new product-service hybrid business models and exploit intelligent technologies to fuel innovation and transform their workforce.

There are numerous challenges that confront India and its vision of peak operational efficiencies through digital transformation. While the digital India dream is achievable, there are harsh ground realities to tackle such as a spectrum crunch, excessive duties, complex tax structures that discourage manufacturing and the greatest challenge - changing workforce mindsets.

The success of Digital India will primarily depend on meticulous planning and its well-thought-out, phased implementation. India must embrace disruptive new digital business models and stop protecting outdated industry boundaries and policies. Perhaps, it's time to constitute and monitor a Digital Competitive Index for the country.

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