The Digital India Report released by McKinsey Global Institute in March contains a wealth of interesting data about how digital technologies have impacted the Indian economy. With 560 million internet subscribers, India has more digital consumers than any other country in the world, save China. Despite these high numbers, Indias Country Digital Adoption Index score is a lowly 32, making it the bottom-ranked country among the 17 mature and emerging markets that McKinsey analysed (South Korea tops the list at 75 and China is at 47). That said, India is digitizing faster than every country in the world with the exception of Indonesia, and as only 40% of its population has internet connectivity, it still has tremendous room to grow.
For most countries, the tipping point in digital adoption came when the cost of data dropped below 1% of average household income and smartphone penetration crossed 20%. For instance, once Brazil and China passed 20% penetration in 2012, it took them just four years to cross 52% and 71% penetration, respectively. According to McKinsey, the cost of data dropped below 1% of average Indian household income for the first time sometime in 2017, in large part because of the price war sparked off by the entry of Jio in the market. As a result, data consumption rose exponentially, increasing nearly four-fold in 2017 alone. Around the same time, the price of smartphones in India dropped from 25% of per capita gross domestic product (GDP) in 2007 to 8% in 2014, resulting in an increase in smartphone penetration from 8% in 2014 to 26% in 2018.
As rapidly as the use of digital technologies has grown so far, it seems clear that India is poised to witness greater acceleration. Over the past five years, the gross merchandise value of e-commerce doubled, and along the way it has completely changed the way we shop. Over the past four years, utilization of ride-hailing applications increased three-fold and, in the process, fundamentally inverted notions of vehicle ownership and use.
Adoption is not limited to urban areas. Over the past decade, various digital platforms rolled out by the government have penetrated deep into the rural hinterland, because of the increased telecom penetration and the coming together of key elements of digital infrastructure, such as identity and payment technologies. In 2017 alone, approximately $5 billion worth of goods were traded on the Electronic National Agriculture Market (eNAM), representing nearly 2% of total crop sales. Electronic transfers of government benefits directly to the bank accounts of intended recipients were 26 times higher in fiscal year 2018 than in 2014, and the total value of Aadhaar-based micro-ATM transactions rose over 10-fold in the last two years.
Digital technology was once a luxury reserved for a privileged few. Today, it is ubiquitous. In urban areas, digital platforms have so insinuated themselves into our way of life that they are often a reliable substitute for existing infrastructure. In rural areas that until recently had little to no access to basic infrastructure, they have become the lifeline that connects people and places which the system used to previously ignore. Weve reached a point where these technologies arent so much a nice-to-have, but an essential part of the infrastructure on which our national growth depends.
As exhaustive as the McKinsey Report is, there is one statistic that it did not carrythe annual number of internet shutdowns in India. The government has long operated on the belief that in a national security emergency, if it shuts down the internet in the affected area, it will prevent perpetrators of dangerous and illegal acts from communicating with each other and tamp down rumours that are often more de-stabilizing than the threatening incidents themselves. Based on this assumption, Indian authorities have freely and frequently ordered internet service providers to switch off internet access in various parts of the country. According to internetshutdown.in, since 2012, there have been a total of 315 internet shutdowns in India, and that too, with the number of shutdowns having doubled every year since 2014. Read full article on Live Mint