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Why a strong digital ecosystem is key to India's $5 trillion economy vision

A hot topic in boardroom discussions for years, digital transformation has now become a part of the mainstream realm. From large private enterprises to the public sector, midsize businesses to startups, the pace of digital transformation across the board is incredible. In fact, digitalization of every sector is one of the Central Government's ten leading targets for the next decade. Is this a sign of India's digital economy coming of age?

Shailender Kumar | Thursday, October 10, 2019 | 17:10 IST

With an eye on further empowering the nation's growing digital economy, the Government of India introduced the National Policy on Electronics (NPE) and the National Policy on Software Products (NPSP) earlier this year. These policies aim to build a comprehensive digital manufacturing and research and development (R&D) ecosystem, and are intended to complement efforts already underway to improve digital literacy and infrastructure under the "Digital India" programme.

Reiterating its vision to develop the digital economy, the Government in its Union Budget for FY 2019-20, called for additional investments in boosting the digital economy, while also making digital transactions more attractive.

For starters, India's digital consumer base is the world's second-largest, as well as the second-fastest growing among 17 major economies, as per findings of the latest India Economic Survey. And this base is core to the creation of future economic value and societal empowerment as digital solutions backed by new-gen technologies such as artificial intelligence (AI), internet of things (IoT) and automation become ubiquitous.

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It's, therefore, no surprise that the burgeoning digital economy in India is envisaged to reach a value of nearly $1 trillion by 2025 - a fivefold increase from the current $200 billion. Right from multinationals to government entities to entrepreneurs of all sizes, digitalisation is making Indian enterprises future-ready to take advantage of opportunities and overcome challenges. This is in line with the Government's ambitious vision to make India a $5-trillion economy at large by 2025.

India in the Industry 4.0 era

True to the tenets of the fourth industrial revolution, the next phase of India's prosperity will be driven by digitalisation with next-generation technologies. The nation's naturally tech-savvy demography - 1.2 billion mobile phone connections, 560 million internet subscriptions, and over 350 million smartphones - will serve as the fulcrum of an inclusive digital transformation.

We're already seeing more and more deployment of digital tools in the priority sectors of healthcare, education, financial services, agriculture, and transportation. From emboldening India's IT-BPM industry to doubling farmers' income, a strong digital economy holds the key to delivering sustainable growth, propelled by transformational innovations. A robust digital economy will also help India be better prepared to tackle some of the opaque complexities of the global marketplace.

Digitalisation of the economy in entirety is a key prerequisite for some of the Government's flagship transformational programs - such as 'Make in India,' 'Startup India,' and 'Skill India' - to succeed. Meanwhile, with a growing number of government to citizen (G2C) services reaching a wider audience, more Indians are now becoming a part of the formal/organised economy than ever before.

This is opening up latent demand for trade and investment for local and global businesses alike. Besides achieving national economic targets, digitalisation has also become critical to improve ease of transacting and improving the quality of living. Implementation of Aadhaar - the biometric digital identity program spanning 1.2 billion citizens, and the Goods and Services Tax (GST) - which brought more than 10 million businesses online - have been the hallmarks of large-scale digitalisation in India.

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The next frontier in digital inclusion

India is looking to extend digital literacy to 60 million rural people by March 2020. As more people come online, tools such as JAM Trinity, a union of Jan Dhan-Aadhaar-Mobile number will better contribute to nation-building and overall economic progress. Digitalisation has already helped disburse over $86.4 billion directly to the bank accounts of beneficiaries spanning over 430 government schemes since 2015 while saving around $15.3 in the process by plugging channel inefficiencies.

For such massive data-driven government initiatives as well as private commercial ventures to be successful in the future, they will need to be backed by a technology that combines the best of human and machine capabilities. That's where the role of a modern cloud platform becomes crucial - one that enables digital scale, security and performance, along with optimizing cost savings.

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A new generation of cloud computing, a Generation 2 cloud, with automated security and functional independence, can best assist a modern entity in maximising its business potential. A modern cloud platform can help entities scope out new businesses and predict future obstacles with the most efficient and safe utilisation of data. It is also the bedrock of innovation and application of new technologies such as AI, IoT, and automation.

In summary, a robust, next-generation cloud platform will be the vehicle for India to further narrow its digital divide, paving the way for the making of a strong digital economy. Are you in the driver's seat?

(The author is Regional Managing Director, Oracle India)