Investments in Digital Technology Crucial for Digital India

Aug 14, 2018 | 4 months ago | Read Time: 3 minutes | By CA Sandeep Vinod Kanoi

India is a breeding ground for the digital start-ups, with a conservative estimate showing 4,000 plus players. As PM Narendra Modi’s government promotes actively the Digital India initiative for transforming India into a digitally invested economy and a knowledgeable society, growth, and investment in digital technology would surge ahead.

The number of VCs (Venture Capitalists) investing in the start-ups has grown multi-folds and is likely to become more prevalent in coming near future. As more number of Venture Capitalists looking to benefit from the investment boom, start-ups would look for the investors offering more than just financial support. 

The digital economy is a new productivity platform which according to some experts is the third industrial revolution. The digital revolution, also known as “IoE (Internet of Everything) or ‘The Internet Economy’, is projected to create new growth opportunities, jobs and become one of the biggest business opportunity in coming 30-40 years.

The Indian Department of Electronics & Information Technology estimated that IoT industry in the country is likely to grow and become INR 940 billion, by the year 2020. The areas of focus include health, agriculture, natural disasters, water quality, security, transportation, supply chain management, automobile, automated metering, smart cities, monitoring of utilities, oil and gas and waste management. Goldman Sachs has predicted that India which comprises15 percent of the world population, with a growth rate of 7-8 percent could be the 2nd largest economy by the year 2030. Country’s new leadership considers that digital economy would be the major growth enabler for India. When the Indian PM listed “Digital India” among other the top priorities, he gave a loud nod to the digital economy’s opportunities.

Factors driving the growth of the digital economy in India

  • Growing start-up ecosystem
  • Engineering talent is abundant
  • Rising internet penetration and 4G drive increased by 200%
  • Increasing government focus such as Digital India, e-governance, and citizen empowerment
  • Favorable demographics – More than half of the Indian population is between 15-45 years of age

A Pro-active and Understanding Government

The Indian government understands that millions of its countrymen are looking to it to deliver on the promises and meet the expectations for the country for taking as a position as the fastest-growing economies in the world. With the limelight on India, there’s a sense of national urgency for strategic investment in digital technology which would be crucial to creating new paths for the future.

The work which the existing government has already done in laying the groundwork for the transformation with Digital India initiative that calls for the development of digitally-enabled government services, large-scale digital infrastructure and better digital literacy among Indians, is commendable. While a program of this scale is extraordinary, the experts believe that it’s a risk worth taking, as opportunities which it would bring would also be huge. With the right amount of investment in digital technology, the country could entirely transform how the businesses, the government, and citizens interact, potentially adding $1 trillion as economic value for India.

The time is now for the businesses for taking the initiative on transformational projects which would harness the power of digitization.

 The Bottom Line

The level of online governance mechanisms like Aadhaar and GST have backed to the requirement for digital transformation in India. It has also led the Indian government for pitching to incentivize private players supporting digital transformation and also the option for establishing private-public partnerships.

In the meantime, both the public agencies as well as the private sector are investing heavily in improving connectivity, accessibility, and technological improvement, especially in STPs and SEZs. With the aim of meeting global standards by the year 2020, these investments would prove to be advantageous for the foreign firms willing to set up digital infrastructure in the country.


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