India’s Digital Revolution And Governance

Digital technology— mobile internet, artificial intelligence, blockchain— and big data have changed not only the drivers of economic growth but also how we live. This revolution is taking place at a much faster pace in India. India’s digital connectivity has increased from being a low digital connectivity economy in 2014 to become the second most connected nation in the world today. 

Digital connectivity has been enabled by the increase in the number of smartphones that has enabled India to leap-frog and access long-distance communications, without making costly investments in landlines and hard infrastructure. This has accelerated the pace of structural transformation that has sustained a fast pace of economic growth and made India a formidable global exporter of modern services. 

The digital revolution changed the city of Gurgaon from being an agricultural wasteland into becoming a sea of skyscrapers for digital enterprises. It attracts the global tech giants such as Google, Facebook and local IT businesses. It has quickly emerged as a hub for numerous modern services, from IT software and finance to consulting.  

The digital revolution has changed the composition of foreign direct inflows in India. India has experienced a strong shift in the composition of the FDI inflows towards digital services, which now account for more than half of the inflow. India is ranked third in the world in terms of attracting investment for technology transactions. The export of services has increased at a much faster pace compared to the export of goods.  

Digitalisation is rapidly transforming healthcare, education, financial services, agriculture, manufacturing and government services. It has improved the delivery of social protection programs for those in need and expanded financial inclusion.

However, there remains a huge potential for improving India’s digital governance framework and using digital solutions to increase the quality of government services and enhance accountability by providing new channels for public engagement and reducing opportunities for corruption.  

Digital governance  

India’s governance framework was built for the tangible world and laws and regulations need to be adapted for the digital world to build an equitable digital economy. India now needs to focus on improving its digital governance framework. 

To improve digital governance, India needs to reduce the digital divide that currently exists, improve digital platforms and digital enablers and scale up digital safeguards and data protection. Improving digital governance is important, as our economic and social lives have increasingly moved online and the digital and physical domains have become increasingly more integrated than ever. 

Policymakers cannot leave digital governance and digital data protection in the hands of enterprises that designed it. The big tech companies now have a huge and unfair advantage, as they make a huge gain from intangible assets such as data, algorithms and intellectual property, compared to their tangible assets such as physical labour or goods and services. They have taken advantage of weak digital governance to avoid paying taxes.  

And now more than ever, data protection has become important. The digital revolution provides data inputs to enterprises, which transcend other inputs— like labour and capital— and data inputs can also create downside risks. 

Data collected for one purpose have the potential to generate economic and social value in applications far beyond those originally anticipated. This runs the downside risk of data being used for other purposes that can harm individuals and societies.  

The more data are reused, the greater the risk of data misuse. This risk is growing in cybercrimes and the potential for politically or commercially motivated surveillance. The scope for discrimination based on ethnicity, religion, race, gender, disability status, or sexual orientation may be further exacerbated by the growing use of algorithms. 

Addressing these concerns calls for the regulation of personal data grounded in a human rights framework, supported by policies that secure both people and the data systems on which they depend.  

India has been preparing for years a regulatory framework to promote data protection. This has three pillars--protect personal data as an essential facet of informational privacy, expand the growth of the digital economy to enable the use of data as a critical means of communication between persons and create a collective culture that fosters a free and fair digital economy, respecting the informational privacy of individuals and ensuring empowerment, progress and innovation through digital governance and inclusion. 

However, a rising concern in this regulatory framework is governance, as a big regulatory vacuum exists around surveillance law in India which will not adequately protect citizen privacy, as there are no clear rules that govern government use of data. India can easily rebalance and reset the rules of the game for data governance, implementation of this vision needs to allow the flow of data among a wide array of users in a way that facilitates the safe use and reuse of data.  

Improved digital governance has the potential to vastly improve the delivery of government services. In many countries, citizens can vote, pay taxes, check their medical records, apply for loans, or register new businesses online in a matter of minutes. India is still much further behind.

The digital divide between leading and lagging regions within India remains huge to improve the delivery of government services. Data systems for public and private intent data alike tend to exclude poor people and statistical capacity and data literacy remain limited in the lagging regions. 

To reduce the digital divide and improve digital governance, India needs to scale up investments in digital infrastructure. How will one million community health workers in India provide health care to rural areas and how can India improve the skills of 100 million young people seeking better jobs?  

India has the potential to become a global leader in improving digital government services. To achieve it, India needs a stronger strategy to align digital technology with sustainable development, especially how the government can use electronic IDs to secure personal data, rationalise online navigation, boost financial inclusion and expand public service delivery. 

India has the potential to benefit from an integrated and improved national data system with the development of a data governance framework.