By Alok Ohrie
India has set itself an ambitious target of doubling its economy in five years to $5 trillion. Global macroeconomic factors coupled with a cautious outlook and muted domestic consumption poses a serious challenge to achieving that ambition.
Admittedly, the task is challenging. Of course, the government has acted with alacrity and shown urgency in addressing a large section of the concerns of the various industry bodies. The latest rationalisation of corporate taxes bringing it at par with all other investment destinations across the world is a massive structural change, aimed at boosting local manufacturing, alleviating agricultural distress and addressing the issue of rising unemployment.
The moment has now come for us to think out of the box. We need to break the old paradigms of economic growth and development by injecting technology-led innovation into our DNA. Especially, as digital economy alone can support 60-65 million jobs in the future, fueled, of course, by government policies, support and initiative.
The true game-changer would be the advent of 5G or the fifth-generation cellular technology which will be transformational in more ways than one. It is estimated that the roll out of 5G services alone will have an estimated impact of $1 trillion on the Indian economy. By 2025, India could create a digital economy of $800 billion to $ 1 trillion.
Vibrant IT-BPM, telecom, e-commerce, electronics sectors, the explosion of new digital startups equipped with technologies such as virtual reality (VR), augmented reality (AR), Blockchain, Artificial Intelligence (AI), robotics, analytics, automation, cloud, cyber-security, mobile, and social, could help to achieve close to $250 billion in gross value added by 2025.
To leverage this potential, we need to focus on employment generation and growth in consumption, increase public spending in infrastructure, especially rural infrastructure, to optimise the market potential of non-urban India, invest in manufacturing, especially in the MSME segment, and improve access to services. The key sectors would be manufacturing, education and healthcare with programmes such as Digital India, Make in India, Start Up India and Ayushman Bharat creating an inclusive environment. Technology will be the glue that will bind all of these and deliver the future.
Technology for employment generation
India is one of the world's fastest growing markets. The country is witnessing a massive increase in internet users especially in tier 2 and tier 3 cities, towns and villages. Increased availability of bandwidth, cheap data plans and increased awareness is bridging the digital gap between urban and rural India.
What this means is that a country, which already has the world's largest youth population, is also going to have the most number of connected people-creating a new asset class for businesses. Just imagine the market opportunity that this is likely to present. Digital technologies, smart phone penetration and increased access to computing has already created new business models and increased access to services. We must now take it to the next level to strengthen manufacturing, generate jobs and create employability. We need to get 'India working' sooner than later.
According to the World Bank, India needs to create 8.1 million jobs annually to achieve its growth targets. It is imperative that government and the private sector take proactive measures to generate adequate employment for about 12.8 million new entrants to the workforce every year. We need to take necessary steps to ensure that India's youth develop the right skill sets required for high-quality manufacturing and world class services.
Demand is increasing for executives trained in emerging fields such as Big Data analytics, machine learning, AI and blockchain-who also are trained in interpreting digital dashboards and using digital marketing techniques. Digital technology can be leveraged to improve the quality of skill training through the use of augmented reality and virtual reality tools to train skill seekers in how to use high-end machines at work. Equally significant is the fact that internet in India is going vernacular with increased technology penetration even as its use gets increasingly democratised. Witness, therefore, how a cobbler in Kolhapur, a tea grower in Assam, a weaver in Kancheepuram or, for that matter, a seller of high-end TVs, is selling his wares to buyers far away, from the same platform today. Neither distance, nor geography, nor real estate, for that matter, is a challenge.
No wonder then that Internet-based e-commerce in India generates $30 billion to $35 billion merchandise annually, employing more than 100,000 people. Importantly, by 2025, this market is expected to surge leading to the creation of over 500,000 direct jobs.
As for agriculture, today, a farmer can go online and learn everything he wants to about improving yields, increasing the market value of crops, obtaining loans, optimising agricultural inputs, and getting direct access to markets. Digital applications including satellite, drone, and weather data promise to play a significant role in the government's quest to double farmers' incomes by 2022.
In conclusion, India's aspiration of attaining the $5 trillion economy in five years will depend on India's adoption of technology in all sectors and transformation into a digital economy.
The author is President & Managing Director Dell Technologies India