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Digital India Still Elusive, World Bank Report Shows

It is an amazing transformation that today 40 percent of the world's population is connected by the internet. While these achievements are to be celebrated, this is also occasion to be mindful that we do not create a new underclass. With nearly 20 percent of the world's population unable to read and write, the spread of digital technologies alone is unlikely to spell the end of the global knowledge divide - Kaushik Basu, World Bank Chief Economist

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The Government of India's flagship scheme Digital India received some sobering news from the World Banks recently released World Development report 2016, titled 'Digital Dividends'. The report finds globally that although digital technology is widespread its aggregate impact has fallen short and the benefits are unevenly distributed.

The report stresses that along with measuring connectivity countries must focus on digital dividends (the broader developmental benefits like employment and a better livelihood for the majority of the population) and the analog complements to digital investments; strengthening regulations that ensure competition among businesses, adapting workers' skills to the demands of the new economy, and ensuring that institutions are accountable.

The main issue right now seems to be that an overwhelming majority has no internet access. India specific data reveals that while almost 80 percent of the population owns a mobile phone almost 1 billion people in the country, or 83 percent of the population, does not have access to the internet. The report also highlights the potential of digital technologies to enhance growth, jobs and better access to public services. Digital access facilitates biometric registration, authentication, and payments in India's National Rural Employment Guarantee Scheme (NREGA), the world's largest workfare program. The benefits in respect of NREGA have been proven with reduction in time for paying beneficiaries going down by 29 percent and leakages by 35 percent.

According to the report, India is currently the largest exporter of ICT services and skilled manpower in the developing world. The Business Process Outsourcing (BPO) industry today employs more than 3.1 million workers, 30 percent of them are women. However, the country's early successes in becoming a global powerhouse for information services have slowed down especially when contrasted with China's achievements.

India had more than 200 million internet users, compared to 665 million in China. Fewer than two out of every five Indian businesses had an online presence compared to almost two-thirds of firms in China. Total spectrum allocated to mobile communications in India is 288 MHz as opposed to 630 MHz in China. The cost of residential broadband service in India is 6-10 times more expensive than in China.

The one area where India surpasses China is in the adoption of digital technology by government through the digital ID program Aadhaar. The Indian government has announced a slew of initiatives in addition to Digital India such as Make in India; Start-up India; and innovative applications of Aadhaar such as JAM (Jan-Dhan Yojana-Aadhaar-Mobile trinity) and Digital Lockers that seek to harness the capabilities of digital technology.

The World Development Report 2016: Digital Dividends is available at http://www.worldbank.org/wdr2016


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