By Ankit Agarwal
It is now established beyond doubt that India’s digital infrastructure will give it the winning edge, both in terms of growth and socio-economic prosperity. Every 10% increase in broadband penetration can push a developing country’s GDP growth by 1.4%. With every new broadband user creating 1.5 extra roles, millions of new jobs will sprout in India.
India’s 5G rollout is among the fastest in the world, and its UPI platform has become a global case study for financial inclusion. India has also agreed to share its Digital Public Infrastructure resources with the Global South. This Budget must be the fuel for our second digital sprint, one that transforms India into a global leader, not just a contender. Along with wireless technology, the backend digital infrastructure will be critical for its digital ambitions. The Government has recently approved Rs 1.39 lakh crore for the BharatNet Project, its biggest rural telecom project to enhance the country’s rural internet connectivity. This is one such major initiative to unleash the true potential of the rural economy through digital intervention.
Imagine India with villages as connected and prosperous as cities or India with its homegrown AI models and scalable methods of precision agriculture. This is futuristic, for sure. But it’s the India we can build - by investing in the invisible arteries of our digital infrastructure: But are we leading the curve on Optical Fibre yet? Numbers don't say so. For instance, China has fkm per capita of 0.87, while India, is at 0.09 fkm per capita.
While the government is taking a slew of measures to boost wireless and satellite connectivity, numerous consultation papers on issues like the usage of street furniture for 5G, quality of service, and digital transformation on 5G are indicative of the government’s intent here. I am confident we have what it takes to bridge the fiber per capita gap with the right policy and budget impetus. A few things if done right, can leapfrog us to the most advanced digital economies in the world.
Key focus areas
Firstly, for sustainable funding for digital infrastructure - India will need $35 billion investment annually to be among the top five digital economies, an amount private players alone cannot invest. The successful road infrastructure financing model can serve as a good example here. A mix of market borrowing using government bonds and securities, budgetary support, use of the Universal Services Obligation Fund (USOF), multilateral funding, and private equity could be the other sources the government may explore. Secondly, it is homemade preform for optical fibre manufacturing - Preform is the heart of optical fibre manufacturing. This high-tech component is currently imported at a 60-70% premium, and multinational manufacturers are reluctant to bring the technology to India. Therefore, we need to ensure India’s self-reliance across the fibre value chain, starting with the glass preform by increasing the BCD on imported preform.
Third, India needs R&D impetus through tax breaks. We are spending less than 1% of GDP on R&D, which is a fraction compared to global players. To create domestic champions, many countries have incentivised through tax reforms and adopted a patent box regime to spur innovation. India should consider output-based incentives to promote domestic high-tech manufacturing. Lastly, our brave soldiers deserve the best defence infrastructure, including robust, modern ICT networks.
There is a void in ICT infrastructure at the Access layer/Tactical Battle Area and Non-Terrestrial Network, a need exists to address the same. The government should create a dedicated ICT budget for defence ICT modernisation in line with best global practices. In conclusion, Budget 2024 should not just be about numbers; it should be about a vision. A vision of an India that is leading the curve on technology and digitalisation, sustainably and equitably. This Budget can be the spark that transforms us as a global ICT manufacturing hub and ignites India’s digital supremacy.
(Ankit Agarwal is Managing Director at Sterlite Technologies Ltd)
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