Market Insight

Role of private sector critical to the success of Indian e-governance plan

December 15, 2015  | Subscribers Only


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In July 2015, the Indian Prime Minister Mr. Narendra Modi announced that the Digital India campaign has drawn investments worth US$78 billion since 2014 from local and foreign companies, with the promise of creating 1.8 million jobs in the next 5-10 years. Private telecommunication companies and the government are among the largest investors in this program and they are working towards a common goal to connect all citizens digitally and execute the adoption of a single e–governance system across the country.

Public and private investments for the Digital India campaign

Entity

Amount of investment

Description of investment

The Indian government

INR 113,000 crore (US$16.95 billion)

Implementation of e-governance and bridging digital divide

Reliance Industries

INR 250,000 crore (US$ 37.5 billion)

Wireless broadband infrastructure and manufacturing of mobile phones

Bharti group 

INR 100,000 crore

(US$15 billion)

4G connectivity, e-health and e-education

Aditya Birla group

INR 54,000 crore

(US $8.1 billion)

Network rollout, broadband and WiFi deployment

Source: Press Trust of India

As the country strives to build up its ICT infrastructure, IHS also expects Digital India program to drive per capita public sector IT spending in India. Estimated by the industry at less than US$3 in 2008, India trails behind countries like Singapore and, China where the per capita public sector IT spending numbers are estimated at US$160 and US$6, respectively. However at this point, what is more important is the involvement of the private sector. Based on the above breakdown of investment amount, investments by private companies account to nearly 80% while the remaining 20% is funded by the government.

In the past the Indian government has experienced a slower pace in executing various public sector digital processes and has faced continued citizen complaints demanding for better services. By leveraging the knowledge from private companies, the government is hoping to promote the culture of technology in bureaucracy and hasten the deployment of Digital India program.  One such example of private participation is the announcement from the Reliance Group to invest US$1.5 billion to fund transformational initiatives across the cloud computing and telecom space over the next few years. One of its goals is to fully deploy cloud-based content delivery network by the end of 2015 which can help the government departments to access higher computing power, consistent network, and high availability storage. Another indicator is the headcount expansion of more than 60,000 IT professionals in 2015 planned by Tata Consultancy Services to support public sector IT projects.

With the increasing impact of electronic data in enabling efficiencies and transparency, the government has managed to introduce a number of e-governance initiatives at municipal and state levels. These services are then integrated and implemented at national level for a larger impact.  Among some of the examples are:

State

Project

Description

Kerala

FRIENDS

Online utility bill, tax and education fees payment

Andhra Pradesh

E-SEVA

Online utility bill payment

Karnataka

Bhoomi

Electronic land record management and education services

Rajasthan

RajNidhi

Centralized information portal for government services

Himachal Pradesh

LokMitra

Centralized public information and services

Uttar Pradesh

E-Suvidha

Centralized public information and services

Chandigarh

SAMPARK

Centralized tax collection and public services

 

The implementation of e-governance initiatives accelerates public administration procedures which are often tedious. It also enables transparency and mitigates corruption risks. However, in India, the implementation of e-governance initiatives is hindered by poor telecommunication infrastructure and the fact that internet speeds are not uniform across different regions. Lack of high-speed internet connectivity makes the network and transfer of information slow and inefficient. According to IHS, currently wireless 3G only covers 32% of the population and 4G is still nascent at only 2%. The broadband household penetration was 6% in 2014. When compared to countries where e-governance is well established, these metrics fall short. For example, in the US, the 3G and 4G coverage are at 99% and 98% respectively while broadband household penetration is at 73.5%.

Some states in India like Kerala are technologically stronger than others, having recently declared as the first complete digital state with 100 per cent mobile adoption rate and 75% e-literacy rates; meanwhile some states like Assam are still looking for financial assistance from the federal government to aid the realization of an infrastructure that supports the e-governance system.

While private sector companies like Bharti Airtel and Reliance Jio are working  to improve the connectivity infrastructure, such as 4G services, implementation of e-governance initiatives still faces other challenges that need to be mitigated including:

  • Scale of implementation  across multiple states and departments is large while maintaining a single standard of operation
  • Low IT literacy and little technological exposure among civil servants who are the main users and drivers of such initiatives
  • Difficulties in procuring and using various modern computing hardware  in remote areas

Though it will not happen instantly, together with the industrial knowledge and financial support from private sector IT companies, India will likely overcome these limitations and continue to invest in a seamless e-governance setup capable of improving administration efficiency and eliminating silos.

Research by Market
Enterprise & IT
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