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Pranjal Sharma

Pranjal Sharma has been analysing, commenting and writing on economic and development policy in India for 25 years. He has worked in print, TV and digital media in leadership positions and guided teams to interpret economic change and India’s engagement with the world

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Connectivity Is Cash For SMEs And Farmers

The next phase of growth in the post Covid world will be fuelled by digital platforms and high bandwidth connectivity. To reinforce its position as a rapidly growing emerging market, India must strengthen its foundations of digital infrastructure.

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In the 80 and 90s connectivity was a luxury. In the subsequent decade of 2000s, it became an important facility which we came to rely on. 

Today, in the second decade of the current century, it is an essential service. As basic as road, energy, water and dwelling. Connectivity is no longer just about voice or data. It is about delivering services, sharing information and informed decision making. A large percentage of government services at the national and state level are now increasingly relying on digital and connectivity infrastructure 

Connectivity and consumption of data was predominantly in the business districts of large cities. Now data consumption has spread to residential areas in metros, cities, towns and even villages. The egalitarian nature of data consumption means that a few leased lines in central business districts can serve the needs of a data hunger country. 

Global data traffic is likely to reach 10ZB annually by 2025 according to International Data Corporation. (One ZB equals 1 trillion GB). Similar trend is seen in India. Average data consumption by India consumers is likely to double to 25 GB per month per user by 2025, according to the Mobility Report by Ericsson. Most of the access to the internet will be through phones though residential areas are witnessing a 20-100% hike in data usage. India has the highest data consumption per user in the world. India will continue to be the leading consumer of data with over 410 million smartphone users likely to be added by 2025. 

The mobile phone infrastructure can help, though it is close to saturation usage. Covid has highlighted the digital divide in the country. This divide is not just about smart devices. It is mostly about poor connectivity in most parts of the country. 

Roads and highways to remote areas brought development. Connectivity to the digitally marginalised brings livelihood. Small businesses and self-employed professionals like electricians and plumbers can earn a livelihood with connected phones. Restaurants listed on food delivery apps; product manufacturers listed on ecommerce sites find a sharp rise in their business queries. 

A systematic effort is underway to on-board small and medium business on ecommerce portals. Global giants like Amazon and Flipkart are connecting with thousands of retailers and producers. 

Bangalore based start-up has created a thriving platform for B2B trade for small enterprises. With over a million retailers and 30,000 sellers, the company describes itself as the “largest national distribution platform of its kind enabling retailers and businesses to source merchandise from manufacturers, brands, white labels, importers etc. on a single platform. Udaan brings to users the power of technology to grow their business.”

Another good example is the state-run GEM portal for government procurement. Over 90 public sector companies are procuring at least a third of their requirements from GEM. The government is encouraging small business and start-ups to register on the GEM portal to get orders directly in an open transparent manner. More than 500 sellers are registered on the portal and more than half the sales on the portal is with small and medium enterprises. 

As the popularity of the portal grows, small enterprises in all parts of the country can possibly be part of the national procurement mainstream. However, if the connectivity in small towns and industrial areas is poor, these small enterprises will be at a huge disadvantage. 

Denying them high quality connectivity hurts their ability to survive and thrive. Cheap data driven connectivity can spark a million new ideas by new entrepreneurs. Over 90% of India’s workforce is in the informal sector. For micro, small and medium enterprises, affordable and efficient data connectivity is as critical as easy access to capital. Even as the new labour code frees enterprises to manage human capital, India’s growth will be influenced by how the self-employed earn their livelihoods. They can thrive as professionals or as business creators once they have equal access to national marketplaces. 

A series of reforms have been initiated to enable farm to fork linkages. As food producers begin to establish direct linkage with buyers and consumers, technology-based online market platforms will be critical to their success. Farmer Producer Organisations will require trading portals to present their produce. The Electronic National Agriculture Market (ENAM) has made a good start. Launched in 2016 with just 21 mandis (Agri markets), over 1000 are connected on the platform. Over 16.6 million farmers and 128,000 traders are registered on the ENAM portal already. Additionally, about 1000 farmer producer organisations (FPOs) are also registered on this. 

After the new agri laws which allow the farmers to choose their markets, more and more of the 150 million growers are expected to form FPOs and join ENAM. 

Realtime market price data will be critical for farmers to sell their produce. Poor connectivity and delays will hurt and undermine all efforts to create a transparent trading system in agriculture sector. 

Even though the importance of a connectivity driven economy is well established, India has not moved rapidly enough to boost its capabilities on this front. 

Is our digital infrastructure ready for the millions of farmers to trade efficiently from remote locations? Do we have enough connectivity to offer equal access to traders, producers and small businesses? 

Without adequate investment in digital infrastructure and connectivity, all efforts to ensure inclusion of the marginalised will suffer and fail. 

Leading economies of the world like China, Japan and US invest 1-2% of the GDP on digital infrastructure. However, India’s spend is 0.5 % of its GDP. To meet the target of being an inclusive, dynamic $5 trillion economy, India should invest $35 billion every year in connectivity and digital infrastructure. While government is the leading investor in most infrastructure projects, it lags the private sector in telecom connectivity. 

The next phase of growth in the post Covid world will be fuelled by digital platforms and high bandwidth connectivity. To reinforce its position as a rapidly growing emerging market, India must strengthen its foundations of digital infrastructure.

For those seeking and creating livelihoods, connectivity is cash. 

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