If you go by public pronouncements, our policymakers are fully seized of the opportunities presented by new, transformational technologies like big data analytics, cloud computing, robotics and artificial intelligence. The prime minister has talked about the potential of new technologies to bring inclusive growth and reduce inequalities. And different ministries and the NITI Aayog have detailed reports and plans on their benefits and potential to change India’s future.
But they all seem to be oblivious to the fact that getting the act right in two other technologies—one rather old and one that can be termed middle-aged—is crucial to fully utilising the potential of the new ones. The old technology is electricity. The middle-aged one is the internet. In both, the gap between what is theoretically available and what is reliably provided is vast. The inability of successive Indian Union and state governments to ensure that everyone has access to reliable, uninterrupted electricity and high-quality internet has resulted in India underperforming its growth potential.
Let us take electricity first. India has made good progress in generation and transmission. But distribution, especially last-mile delivery, remains the weak link. This also shows up in India’s power consumption statistics, with the country having a per capita consumption lower than half the global average, says the India Energy Outlook 2021. Debt-laden distribution companies have been unable to ensure reliable power supply in many states, especially in non-urban areas. Move away from the bigger cities and power supply becomes erratic.
The Mission Antyodaya website shows that in 2019, only 52% of rural households received power more than 12 hours a day while another 32% could count on 8-12 hours daily. The quality and reliability of power not only differs between urban and rural areas but also between states and regions. This in turn affects everything from manufacturing production and distribution to educational outcomes. Economists Hunt Allcott of New York University, Allan Collard-Wexler of Duke and Stephen D O’Connell of Emory University looked at the effect of electricity shortages on Indian manufacturing.
Their report, in November 2016, said that shortages affected the annual plant revenues and production surplus of the average manufacturing plant by 5-10%. It also resulted in distortions in plant size distribution because bigger manufacturers prefer to flock to states with relatively low and stable shortages. Equally, this year’s Economic Survey pointed out once again that states with more reliable electricity had better literacy rates.
The case of high-speed internet access is much the same. The telecom revolution has seen impressive progress in terms of both fibre optic infrastructure as well as high speed mobile telephony. The three players still left standing in telecom—Reliance Jio, Bharti Airtel and VI (Vodaphone-Idea)—have all rolled out 4G mobile telephony and are preparing for 5G. (It is not worth discussing the government-owned BSNL and MTNL here given their many problems).
But again, the gap between reliable, high-speed internet availability differs dramatically even between areas within the same city. And there are large areas in the country where high-speed internet is available only in name. Internet connections suffer from one additional issue—the inclination of both the Centre as well as state governments to shut down internet access at the slightest whim. According to a recent report by 10VPN, a research group focused on digital privacy, India suffered an estimated loss of $2.8 billion in 2020 because of internet shutdowns or disruptions. This was 68% of the total loss suffered in the world because of internet shutdowns.
The losses estimated by 10VPN do not account for productivity improvements that high-speed internet access brings. An older study had estimated that a 10% penetration of internet could add up to 1.2% to the per capita GDP of a country. This was even before 4G and the promise of 5G had been recognised.
The ostensible reason for internet shutdowns has been to make it difficult for agitators, rebels and others that the government deems dangerous from making coordinated plans. This is a silly logic because shutdowns are a blunt weapon and they often do not help in their stated purpose. Improved intelligence gathering and deployment of superior data analytics to spot trouble early, both of which need an internet backbone, are better solutions.
The Centre needs to understand that electricity and internet are foundational technologies that will determine the country’s ability to adopt and utilise newer technologies like artificial intelligence, robotics and big data mining. Equally, the Centre needs to explain the same to the states. Without the Centre and states working together, quality electricity supplies and reliable high-speed internet access to the remotest parts of the country will not be possible.
The Economic Survey this year has created an interesting index that it calls the Basic Needs Index. The chief economic advisor may think of adding good internet availability to the composition of the index—and the government can track its progress. It would go a long way in tracking the metrics of the improvement of the foundational technologies that will really help us utilise the new technology and usher in industrial revolution 4.0.
Prosenjit Datta (prosaicview@gmail.com)
Senior business journalist