Digital Age In India: How Deep Does It Really Go?

Thousands of miles separated them, but all the three made use of a similar QR code card and went about their routines. While the economic chasm that separated them could be growing wider, the divide that segregated them into myriad classes for decades is dissipating, thanks to a Digital Age.

Online payments are becoming ubiquitous. However, for the digital footprint to truly make inroads into Indian lifestyles, much more needs to take hold.

A good sign is that UPI transactions increased by 118 per cent YoY in 2023, as a result of a surge in online payments in Tier-II and Tier-III cities. In value terms, transactions rose 106 per cent, with the acceptance of the Mobile Point of Sale, which is growing at 5 per cent.

This is heartening since UPI transactions go beyond banking and financial services, including complex digital offerings like utility payment, cash collection, credit, insurance and assisted commerce, indicating a considerable behavioural shift among consumers and contributing to the formal economy.

Digital Banks On Analog

So far, so good. Making payments on PayTM, PhonePe, PayPal, RazorPay and other apps is fine, but the bedrock of this exercise, done millions of times every day in India, is rooted in the banking system, one that is showing signs of creaking.

Indian banks wrote off Rs 2.09 lakh crore in bad loans last year. While the good news is that they cut non-performing assets to a 10-year low, on-books the numbers aren’t rosy. In the last five years, banks have written off Rs 10.57 lakh crore in bad loans, according to the Reserve Bank of India.

The central bank also said banks have got back Rs 1,09,186 crore of the Rs 5,86,891 crore loans that have been written off over the last three years, a measly 18.6 per cent. To a great extent, ‘digital’ depends on ‘analog’— it always will, and therein lies the monkey wrench.

Truth be told, analogs are the ‘seed capital’ from which sprout digital stems and leaves, with the flowers and fruit of adoption, sustainability, impact and profitability coming in at a later stage. Only robust seeds (banks) can inherently stand tall in times of financial and economic thunderstorms and still endure; the banking system, therefore, is the lynchpin on which any ‘Digital Age’ balances its future.

Akin To Older Narratives

Nearly a quarter of a century the beginning of the 21st century, we can still learn from the Y2K lesson, once thought to be a sure-shot money-spinner, but one that eventually turned out to be a blip. The Digital Age has thrown up many such sure-shots, among them over-the-top (OTT) platforms.

It is only after reams of balance sheets have been cast in red ink that we are fathoming that not all OTTs will do well and turn into Unicorns. The dazzle of billion-dollar valuations is bright, but for every OTT that makes it big, there are scores that don’t.

A tangential yet influencing facet is the tighter policy control now being exercised over OTTs, placing them under intense scrutiny on many aspects. For instance, video-streaming apps such as Netflix, Amazon Prime Video, Hotstar and others have been brought under the ambit of the Ministry of Information and Broadcasting (they were earlier under the Ministry of Electronics and Information Technology).

Unlike TV or print, which follow tough norms, digital media has had little or no regulation on content, subscription rates, certification, censorship and so on. Similar and severe policy changes are being proposed for OTTs operating in other realms and that, in itself, will give rise to more conflict and, thus, more failures.

Digital Revolution Beckons

What makes the digital transformation India is witnessing so different from previous ones? Well, it is the convergence and interaction of multiple technology trends, spurring dramatic lifestyle changes. Some experts believe this will totally overhaul how we live and do business.

Computers are all encompassing now; they are around our ankles and upper arms, in our pockets and on our wrists, in our cars and within our household appliances. Add to that the fact that processing power is increasing and devices getting smaller, cheaper and more powerful—it is no wonder that the average Smartphone is today more powerful than a supercomputer was till recently.

There is a catch, that the core kernel in this crash-course of digital metamorphosis rests in the hands of humans, humble homo sapiens who are unpredictable, fungible, fickle and sometimes fallible.

Here’s a simple example—a friend in Delhi recently had an issue with a large insurance company, from whom he had bought his policy in Hyderabad. Despite ‘connected-offices’, Delhi informed him that they could not access his Hyderabad account on their computers.

Some grumbling and a few phone calls from him saw Delhi’s PCs soon roar to life and all but spit out the required information. End of the day, we have the same people manning our healthcare system, railways, highway networks, and so many supply chains. Things do go awry, proving that man is still greater than machine.

Reworking The Strategy

To circumvent such issues and turbocharge the Digital India initiative, a ‘Digital India Bill’ is being penned, but will only be taken up for enactment and execution much later as it requires oodles of consultation to arrive at the small-print.

The Minister of State for Electronics and Information Technology, Rajeev Chandrasekhar, said India’s approach to the regulation was likely to be “a combination of regulation of markets like the US, with the intent being that citizens enjoy rights like Europeans do”. Amen to that.

The new Bill brings into focus another recently-passed law, the Telecommunications Bill 2023, which paves the way for the Government to take over, manage or suspend telecom services or networks for national security reasons, laying the ground for administrative allocation of telecom spectrum, bypassing auctions—this Bill is steeped in legalese and is causing some consternation and debate.

We also have Bhashini (an abbreviation for ‘Bhasha Interface for India’), which seeks to provide access to digital services and access to the Net in Indian languages, including voice-based access and content creation.

There Are Other Outcomes

The World Bank says India’s ‘Digital Public Infrastructure’ initiative can usher in a revolution, with the country “achieving 80 per cent financial inclusion” and focussing on propelling the financial sector, with digital infrastructure playing a crucial role.

Often misunderstood, Artificial Intelligence took an initial beating due to deep-fakes and generative AI. Today, it is believed that AI can foster trust and transparency, streamline operations and enhance decision-making.

Technology leaders are united on integrating people with disabilities into the digital framework. There are schemes to promote barrier-free access to lifts, buses, hotels, and railway stations, to name but a few. In all, 13 ministries have issued notifications on this front.

A beginning has been made and it is up to us to participate and partake in the fruition of these overtures, as also contribute towards making the transformation inclusive, permeable, and sustainable. The journey is long and a walk has begun, which begs the question: Is there a sprint in the offing?

(The author is a New Delhi-based journalist and communications specialist. Views expressed are personal)