Union Budget 2016-17: No Allocation to Digital Infrastructure

While the government has allocated a huge RS 2.18 lakh crore to roads and rail network, the Budget is silent on outlay for building digital infrastructure, India's weakest link

While Suresh Prabhu’s Railways Budget was all about tech-enabled transformation of Indian Railways, Arun Jaitley’s Union Budget 2016-17 is, at best, an average one when it comes to leveraging technology. Let me clarify that my comment is not about tech sector—the duties, taxes and incentives for IT & electronics sector—but restricted to using technology for India’s overall growth and efficiency & effectiveness of governance.
 
The biggest disappointment is the complete lack of reference to build digital network infrastructure. India has recently surpassed the United States to become the second largest base of mobile subscribers. While we celebrate this while talking about delivering government services, health and banking on mobile, what we often overlook is that delivering those services very often requires a reliable data connection. According to the latest Akamai State of the Internet report (Q3 2015), it takes on an average, 7351 ms for a mobile page to load in India—that is slowest among all the 60-odd countries studies by the company, based on real user monitoring. How can one use such networks to deliver effective services?
 
The state of fixed line is only slightly better. At 3892 ms page load time, it is slightly better than half a dozen countries. Average broadband connection speed in India is 2.5 Mbps, one of the lowest in the world. Only one out seven broadband connections is more than 4 Mbps, as compared to more than three out of four connections in Sri Lanka.
 
The need is for building network capacity—both in access and core network. Unfortunately, that has not received the FM’s attention.
 
Jaitley put emphasis on digital literacy in rural India in his budget speech. He announced the government’s intent to have new Digital Literacy Mission scheme for rural India to cover around 6 crore households within the next three years, though he did not spell out the details of the scheme.  It may be recalled here that three and half years back, the UPA government had announced, as part of the National Policy on IT 2012, its goal to have at least one individual in each household an e-literate. Data is not available on the progress on that plan. Jaitley had again linked e-literacy to computer ownership by households. The world has moved on and the focus in most digital literacy initiatives has shifted to usage and content. With the ubiquity of mobile phones, a lot of this usage will be on those devices. That requires a completely different approach than conducting training programs. In the World Economic Forum’s Global Information Technology Report (2015), India ranked a lowly 89 globally in Networked Readiness Index. India’s score was very high on affordability. While most others such as government usage, business usage and regulatory environment, India had average score, it had abysmal score when it came to individual usage and “infrastructure & digital content”. Any effort to build digital literacy should take into account these facts. Affordability is not an issue. What we need to build is networks and local language content. While the Budget was silent on networks, it remains to be seen if the government actually spells out policy for promoting local language content.
 
One of the welcome steps announced by the FM was the creation of Massive Open Online Courses (MOOCs) for entrepreneurship education and training, in remote areas. To be successful, this also requires quality networks and preferably local language courses.
 
While a total of Rs 2.18 lakh crore has been marked as the outlay for roads (both highways and Pradhan Mantri Gramya Sadak Yojana) and rail networks in a single year 2016-17, it is unfortunate not to have any allocation for the highways and lanes of the digital India—network infrastructure.
 
But this disappointment—though a big one—should not take away from the fact that he has announced a host of positive steps.
 
First and foremost is the unequivocal stance taken on Aadhar. Not only has he extended Aadhar linkage to more areas, he has used the Budget as a platform to announce the government’s decision to grant UIDAI statutory status. “We will undertake significant reforms, such as the enactment of a law to ensure that all Government benefits are conferred upon persons who deserve it, by giving a statutory backing to the AADHAR platform,” the FM said in his speech. The irony: the earlier bill to accord UIDAI a statutory status was blocked by a Parliamentary committee headed by then BJP MP Yashwant Sinha, the father of the current minister of state for Finance, Jayant Sinha, believed by many to be the principal writer of the Budget!
 
While there was no major new announcement on this regard, the FM reiterated the government’s thrust on e-governance by stating that there would be process reforms in government processes. This will help in achieving efficiency (minimum government, maximum governance). He even announced a task force constituted for rationalization of human resources in various ministries, which would be followed by similar exercise for autonomous bodies.
 
Another announcement was the extension of e-assessment to all assesses of income tax in all the seven megacities.
 
Interestingly, there was just once that the FM referred to Digital India in his entire Budget speech.

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