1. Opportunities and Challenges of Digital India’s Rise

Opportunities and Challenges of Digital India’s Rise

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Upstox

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4 min read • Updated: January 31, 2024, 10:55 PM

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Summary

Digital India, launched in 2015, aims to transform India into a digitally empowered society and knowledge economy. The initiative encompasses various projects focusing on e-governance, digital infrastructure, literacy, and payments. While Digital India has expanded internet penetration and leveraged Aadhaar for efficient governance, challenges such as the digital divide, lack of literacy, and data privacy concerns persist. Despite these challenges, Digital India offers vast economic opportunities, with projections indicating significant job creation and GDP growth. Bridging the digital gap requires concerted efforts in policy and implementation to ensure equitable access and maximize the benefits of digitalization for all segments of society.

digital India.webpOpportunities and Challenges of Digital India
The NIPFP report mentions that around 40% of the population above the age of 15 years has not accessed the internet in the last year.

Key Takeaway-

  • The key goals of Digital India include closing the digital divide, raising digital literacy, upgrading digital infrastructure, and expanding digital engagement between citizens and the government.
  • The expansion of internet penetration in India and the success of Aadhaar have served as major game changers.
  • While the advances in digitalisation and technology have been remarkable, there might be potential gaps in access to these digital tools, especially for marginalised or underserved communities.

Digital India

The Government of India's flagship effort- Digital India was launched on July 1, 2015. It aimed to turn the country into a digitally enabled society and knowledge economy. The program's goal is to give us access to a variety of digital services and initiatives. Thus, making it easier for us to communicate with the government and obtain services electronically.

It comprises several projects on e-governance, digital infrastructure, digital literacy, and digital payments, among others. These projects encourage digital inclusion, drive economic growth, and improve the quality of life for the people of India.

One of the biggest contributions is increased private consumption, particularly during the pre and post-pandemic phases. Like, Aarogya Setu and CoWin apps were transformative in tracking and containing the spread of the virus. In fact, they were the reason why vaccination of many people was possible in such a short period. This, in turn, boosted consumption by reopening the economy.

The Aadhar Boon

The unique identification (UID) scheme- Aadhaar, a flagship scheme under Digital India, saved the government around ₹18,700 crore between 2012-13 and 2020-21, through fraud prevention and matching subsidies to beneficiaries. Studies suggest that the use of Aadhaar-based authentication has enabled the effective transfer of benefits to the intended beneficiaries, which in turn has led to an increase in public expenditure and a reduction in corruption.

The internet penetration has grown more than threefold since 2014, crossing the 50% mark in 2022. Aadhaar has officially completed the transfer of over ₹34 lakh crores to more than 1167 crore beneficiaries under the Direct Benefit Transfer (DBT). The total beneficiaries under the Prime Minister Jan Dhan Yojana (PMJDY) reached ₹51.5 crores by January 10, 2024.

Remarkably, approximately 56% of Jan Dhan account holders are women, and two-thirds of these accounts are in rural and semi-urban areas. All thanks to the PAN India Aadhar System.

Opportunities for Digital India Rise

Digital India has opened up vast opportunities, both for the economy as a whole and for individuals. A National Institute of Public Finance and Policy (NIPFP) Report highlighted that digital technologies and data are offering new opportunities across the world, and hold promises for more productivity growth and improved welfare of individuals.

According to World Bank, the digital economy in India, which was valued at around $43 billion in 2020, is expected to grow at a compound annual growth rate (CAGR) of around 23% between 2021 and 2025, to touch $165 billion.

So, currently Digital India is creating new job opportunities, with projections suggesting that the sector could create over 8 million new jobs by 2025.

Challenges to the Digital India

While Digital India presents plenty of opportunities, it is not without challenges. The most pressing issue is the digital divide. According to the Telecom Regulatory Authority of India's (TRAI) data published in March 2021, the internet penetration rate in India is around 42.5%, which leaves around 675 million people unconnected. Further, a report by the National Sample Survey Office (NSSO) suggests that around 53% of households living in villages and 75% of households living in urban areas were dissatisfied with the broadband speed.

Lack of digital literacy is another challenge. The NIPFP report mentions that around 40% of the population above the age of 15 years has not accessed the internet in the last year, primarily due to a lack of awareness and affordability.

Plus, the raging use of digital technologies, coupled with the vast amount of personal data being generated, raises concerns around privacy and data security.

Conclusion

Digital India presents an opportunity for economic growth and development, and this year’s Economic Review shows it. However, the digital divide and lack of digital literacy continue to hinder economic participation.

So, a combined effort is required, both at the policy and implementation level. To bridge the digital gap, improve digital literacy and data security, and enable equitable access to the opportunities presented by Digital India- both urban and rural.