Are these initiatives enough for Narendra Modi government’s target of turning India into a US$5 trillion economy by 2025?
The Union Budget 2020 presented by Finance Minister Nirmala Sitharaman made a quantum leap, calling data as the new oil and allocating a substantial sum for development of quantum technology in the country. In her address, Sitharaman said the new economy is based on innovations that disrupt established business models.
“AI, IoT, 3D, printing, drones, data storage, quantum computing etc are all rewriting the world economic order,” she said.
Are these initiatives enough for Narendra Modi government’s target of turning India into a US$5 trillion economy by 2025? Tech experts and analysts look somewhat optimistic.
Making a Quantum jump
One of the most significant announcements was the Rs 80 billion outlay over the next five years for the National Mission of Quantum Technology and Application.
Nishant Singh, Head of Technology and Telecoms Data at GlobalData, says: “The announcement is significant as the scale of investments necessary to make headway in quantum computing is not possible without the support of the government or large corporations. The quantum computing race already has stiff competition, with companies like Amazon, Google and IBM in the fray; the Indian government’s move should boost the attempts of domestic technology providers, who have been keen to enter this field, but so far did not have the necessary scale or resources.
“From the government’s perspective, quantum computing and its related applications will have significant implications for India’s digital citizen initiatives in healthcare, smart cities and research. For the wider technology sector within India, it would mean attaining indigenous capabilities in quantum technologies, which they can leverage commercially.”
Read more: 2010-2019: No Solace for Quantum Computing
According to Sundar Sampath, CFO, CSS Corp., “Quantum computing is a field with tremendous potential applications to accelerate complex problem solving, with far-reaching benefits to humankind. Early movers can gain a strong head start and dominate in the times ahead. It is encouraging to see that the government has set aside an allocation of Rs 8,000 crore for the National Mission on Quantum Computing and Technology. We hope this will help India gain a strong foothold in this fast evolving space. Also, the focus on data center parks, improved connectivity, and emerging technologies is a step in the right direction to make India a digital economy.”
“The initiative will spur development of new breakthroughs in promoting indigenous science and technology at a global level,” added Ramesh Mamgain, Area VP for Sales India and SAARC at Commvault.
After all ‘Data is the new oil’
The other significant announcement was building of data center parks throughout the country with the support of the private sector. Building data center parks will be necessary to cope up with the volume of data that would be generated if the government is to continue its digital initiatives for its citizens. Significantly, this move will also pave the way for better privacy regulations within India, such as the European Union’s EU General Data Protection Regulation (GDPR).
“Data center parks within India coupled with better privacy regulation will ensure the privacy of the data of Indian citizens, and provide a legal framework for the protection of data by ensuring that the data stays within the boundaries of the Union of India,” said Singh.
Anjani Kommisetti, Country Manager – India & SAARC, Raritan & Servertech (brands of Legrand), said, “The government’s initiative of setting up data centers will bring in an advantage, especially in tier two cities. With internet connectivity and digitalization in smaller parts of the nation, we are sure to see an economic growth.”
Today, data centers are only present in tier 1 cities of India and with operational costs; it is difficult for businesses in tier 2 cities to adopt even micro data centers. Once more data centers are set up in smaller cities, it will mean lower costs for businesses and they will move towards cloud or web-based applications. This will further improve the supply chain as businesses even at lowest levels will generate data that will eventually improvise their business.
Takayuki Inaba, Managing Director–NEC Technologies India Pvt ltd, said, “Proposal to develop Data Center Parks throughout the country is another major step towards digitization and capitalizing data resource available with government agencies. This step will help analyze the data better and make a well informed decision regarding resource allocation for social development of a specific geography and demography.”
Robust digital economy with AI
Furthermore, strategic initiatives aimed at leveraging new-age technologies like the Internet-of-Things, machine learning, robotics, bioinformatics and artificial intelligence across sectors will further help in laying the foundation of a robust, digital economy.
“Addressing the need for technology and stressing on the importance of AI, Analytics and IoT will enable the country to embrace the technological advancements required to succeed today. We are happy to see the Government’s efforts to drive a positive change and position India as a technology leader.” said Supria Dhanda, Vice President and Country Manager, Western Digital India”, said Supria Dhanda, Vice President and Country Manager, Western Digital India.
As the budget talks about building an ecosystem based on emerging technologies such as AI/ML, IoT and more, and building data center parks across India aiming to safeguard ‘data’, the most critical asset of organisations along with the digitization of 100,000 Gram panchayat through its Bharatnet – the increased digital penetration brings along with it cybersecurity risks.
As per a recent report, Indian IT managers detected 39% of threats on servers, 35% on the network, 8% on endpoints and 18% on mobile. Additionally, 90% of IT managers believe cybersecurity awareness and education among employees is a major challenge for organizations.
As Sunil Sharma, Managing Director – Sales, Sophos India & SAARC, noted, “While we welcome the Governments proposed steps in strengthening the MSMEs that provides employment to millions of people, we need more impetus on building skilled cybersecurity professionals in the country.”
He believes that the government’s allocation of Rs. 3,000 crore towards skill development is a step in the right direction towards building India’s youth and economy.
Narrowing digital divide
Other notable announcement in the union budget was that all public institutions at the grassroots level of local self-governance system in India are to be provided with digital connectivity – BharatNet will link around 100,000 of Gram Panchayats over the next year. The government also intends to link PAN (a unique identifier for filing taxes) with Aadhaar (India’s biometric ID system) and increase the scale of Direct Benefit Transfers to citizens.
The government will also be moving towards using artificial intelligence and machine learning in the healthcare sector. Singh explained that this move to become a reality however, the government will have to move towards a standard electronic patient record (EPR) system across the healthcare. “This is a long-term strategy, rather than something that will provide benefits in the short-term.”
CP Gurnani, MD & CEO, Tech Mahindra said, “It is heartening to see initiatives that are aimed at enhancing digital penetration in the country by making Fibre to the home (FTTH) accessible to 100,000 Gram Panchayats via Bharat Net, which will go a long way in bridging the digital divide.”
The government’s previous initiative on Smart Cities continued, with the Finance Minister proposing five new smart cities in collaboration with states via the public-private-partnership (PPP) model. A move to replace conventional meters with smart pre-paid meters over the next three years was also announced. This move can prove immensely important in trimming power distribution losses, enabling real-time energy usage information and paving the way for a wider-footprint smart grid network across parts of India.
“Another important step taken by the Government was on its smart cities mission. It aims to create 100 cities with state-of-the-art infrastructure that includes intelligent lighting, Wi-Fi access points, leading to enhancement of the quality of life of every citizen while building efficient living spaces for future generations,” Rajesh Uttamchandani, Director, Syska said.
iRAM Technologies applauds the FM’s announcement on measures to promote the power and Infrastructure sector. Udaya Bhaskar Rao Abburu, CEO & Managing Director, iRam Technologies said that the initiative to make the industry and commerce sector more technologically enabled with an emphasis on building Smart Cities, as well as the reforms that will be added in the development and infrastructure policies. “We will be working with the government to drive the Smart City growth initiative through deployment of our various IoT based smart systems,” he said.
IT investments in the education sector should also pick up in the forthcoming years with the Government announcing full-fledged online courses. As per GlobalData, ICT investments in the Indian education sector have so far been only a minuscule 1.5% of the overall ICT investments.
In the Union Budget, the Finance Minister announced degree level full-fledged online education program by institutions ranked in the top 100 of the National Institutional Ranking Framework. This move should help provide wider access to higher studies for several Indians for whom the education costs prove to be a hindrance in their attempt to pursue higher education.
“The fact that these online programs will be from top institutions and will award degree-level certifications, could be a major impetus in creating a job-ready India, which as indicated by the Finance Minister will have the largest working-age population in the world by 2030. Initiatives such as these will also help improve the current levels of technology integration in the Indian education system.”
“Optical Fibre program, connecting 100,000 Gram Panchayats in FY21 will provide a great opportunity for students to learn new skills online at affordable rates. Also, the upcoming policy to set up data centre parks throughout the country will provide more jobs for the youth,” Irwin Anand, MD, Udemy India said.
$5 economy wasted!
The Budget also received criticism from some quarters. Shakir Ebrahim, Founder of GoBisbo Broadcasting Network Pvt. Ltd. however believes that the Budget is “$5 trillion opportunity wasted”. According to him, “The Budget 2020-21 has been disappointing indeed, lacking any resolve towards digital India. We had expected infrastructural support for Indian companies to come up to speed with the servers which support more substantial streaming services like Netflix and YouTube. Instead of looking at digital India and Modi’s digital dream, the budget cuts custom duty on newsprint by half.
“In my opinion, this budget will not help build our strengths and capabilities for $5 trillion. The gross under-reporting of the budget deficit at 3.8% of GDP instead, shows a polity still trying to hide systemic problems which have led us there. The imposition of higher duties on Chinese goods is also a virtual admission that we are not confident of competing with China.”
Rooms for growth
The IT sector undoubtedly has to play a major role if India is to achieve the target; its contribution which currently hovers at around 8% will have to rise to over 10% of the overall GDP. As per GlobalData’s estimates at the start of this year, the domestic enterprise ICT market in India was expected to grow at a compound growth rate of around 7% for the next five years.
As Singh said, “The initiatives announced in the Union Budget should provide a considerable boost to the domestic ICT market, and we believe the growth can be higher – very close to the double-digit mark, if such initiatives and incentives for the Technology sector continue in the subsequent union budgets as well.”