Digitization of Business operations: Technology in Managing

Efficiencies

 India is the fastest growing economy in the world. It is also the fourth
largest economy in the world by GDP measure and the second largest in
terms of Purchasing Power Parity (PPP). The digital Indian plan was a
major step by the government in India to bring all segments into
purview.
 It has a three pronged agenda of providing infrastructure, governance
and digital empowerment to every citizen. This initiative will transform
the economy of the nation and make it among the top seven countries
globally to go completely digital. But inherently this exercise was a
critical need to get the vast population and the informal sector into the
folds of accountability and get statistics on the informal economy in
India.
 The importance of these digitization efforts is planned economic and
societal growth triggered by a massive adoption of digital technologies.
 Digitization has been defined as “the economic and social
transformation triggered by the massive adoption of digital technologies
to generate, process, share and transact information”. It has been seen
in several countries that digitization has become one of the key
economic drivers in recent times as it provides economic growth and in
the creation of ample job opportunities. Some years back when the
world economy was sluggish, propelled by digitization it was able to
produce an output of $193 billion and create 6 million jobs across the
globe . The World Economic Forum has mentioned in its report that 10%
increase in digitization score of any country would bring 0.75% growth in
 its GDP per capita. Other recent studies also confirm that its impact is
4.7 times more than the average impact of 0.16% on the per capita GDP
for broadband deployment.
 We have seen that India has been on a growth trajectory since the last
two decades. ‘The Digital India’ program, an initiative by honourable
Prime Minister Mr. Narendra Modi emerged with the idea to build a
transparent, participative and responsive system of governance.
 It looks at a three tiered agenda one, creating requisite infrastructure,
corporate governance and digital empowerment to every citizen. It was
dream to remodel India into digitally empowered society and knowledge
economy. It tries to bring about public accountability by making
information accessible digitally which would further lead to transparency
and public accountability.
 In India, the informal economy is very vast in size as in many developing
countries, the businesses here are in the unorganized sector and the
statistics are not available for major economic decisions.
 The digital India campaign would also lead to proactive steps in getting
this informal economy into the folds of the organized sector and
network it to further benefit by infusing various government programs
and services which would mobilize the capability of every sphere of the
economy.
 Digital India program comprises of several initiatives targeted to prepare
India for becoming a knowledge economy and for bringing good
governance to citizens through synchronized and co-ordinated
engagement of the entire Government. Nine major projects have been
undertaken. These are as follows:
1. All highways to have broadband services: The Government has
initiated steps to lay national optical fibre network in all 2.5 lakh gram
panchayats. Broadband has been laid for rural India and it will be made
mandatory to provide communication infrastructure in new urban
development and buildings. By March 2017, the government has
completed the task of providing nationwide information infrastructure.
2. Easy access to mobile connectivity: massive step shave been taken to
ensure that by 2018 all villages are covered through mobile connectivity.
The aim is to increase network penetration and cover gaps in all 44,000
villages.
3. IT Training for Jobs: Government to focus on training 10 million
people in towns and villages for IT sector jobs in five years and train an
additional 0.3 million agents to run viable businesses delivering IT
services. Additionally, the project involves training of 0.5 million rural IT
workforce in five years and setting up of BPOs in each North-eastern
state.
4. Manufacturing of electronics: The government is focusing on zero
imports of electronics by 2020. To achieve this, the government has
planned to put up smart energy meters, micro-ATMs, mobile, consumer
and medical electronics.
5. Provide public access to internet: The government has aimed to
provide internet services to 2.5 lakh villages which comprises of one in
every panchayat by 2017 and 1.5 lakh post offices in the next two years.
Further, it is aimed to make these post offices Multi-Service centres for
the people.
6. E-Governance: The process and delivery of various services of the
government has been aimed to make digital through e-Governance with
 UIDAI, payment gateway, EDI and mobile platforms. School certificates,
voter ID cards would be provided online. This would enable a faster
examination of data and for the BOP segment they could look at availing
benefit services of the government using these identity proofs that are
mandatory for all government schemes,
7. E-Kranti: e-kranti would make it necessary for every citizen to go
digital by aiming to deliver electronic services to people which deals with
health, education, farmers, justice, security and financial inclusion.
8. Global Information: Engaging social media in a big way to host data
online and use these social media platforms for governance is the aim of
the government. Making information available by ensuring that even
simple information like train schedules etc are available easily to citizens
at the click of a button.
9. MyGov.in is a website launched by the government for a 2-way
communication between citizens and the government. People are free
to send in their suggestions and comment on various issues raised by the
government, like net neutrality.
10. Early harvest programs: Government plans to set up Wi-Fi facilities in
all universities across the country. Email will be made the primary mode
of communication. Aadhar Enabled Biometric Attendance System to be
deployed in all central government offices where recording of
attendance will be made online.

 KEY SECTORS PROGRAM HIGHLIGHTS: India’s current Gross Domestic

Product (GDP) is currently at US $ 2.73 billion. As per the McKinsey
report, with the digitization program it is estimated to touch US $ 6
trillion [1,12] The digital India program has generated employment
 opportunities for 17 million people directly and indirectly. In the next
five years India will emerge a leader using IT in almost all sectors of
business and governance. By digitizing India’s predominantly ‘cash based
economy’ and reforming the tax system India has the potential to
amplify its expansion had make it one of the fastest growing economies
over the next ten years.
 According to the Morgan Stanley research, India’s economy is poised to
leapfrog from its current seventh place to the third largest economy by
2027 with $ 6 trillion gross domestic product. The equity market now,
tenth in the world, is estimated to jump to fifth, with financial services
and consumer discretionary stocks leading the way.
 1. Banking Sector – The initial spurt for digitization can be credited with
the launch of the Aadhar initiative in 2010, a biometric identification
program with more than 1.3 billion Indians registered in the
government’s digital database. The ‘Jan Dhan’ paved the way to ensure
that every household in India has a bank account and ease of access to
these accounts. Since this initiative more than 295.2 million bank
accounts have been opened as on August 2017. Prior to the launch of
Jan Dhan more than 35% of Indian households did not have access to a
bank account. By slowing moving Indians from cash based transactions
to digital transactions there has been a major boost to the economic
growth.
 In unorganized sectors and BOP segments where there is major cash
transactions, firstly, it they are not accounted for, to that extent the
taxes are evaded. Secondly, it becomes near impossible for government
to get an accurate estimate of the size and volume of business. Also, in
 some cases, consumers and small enterprises are not possible to avail
the benefit if credit transactions.
 Certain milestones since digitization - (i) The Government has been able
to successfully open 3.8 million bank accounts for workers in the
unorganized sector ensuring some accountability and digital movement
among the unorganized sectors and the base of pyramid segments.
(ii) About 2,00,000 point of sale (PoS) machines have been provided in
1,00,000 villages and RuPay cards have been distributed to over 34
million farmers across India. (iii) Recently, the government also lowered
the Merchant Discount Rate (MDR) fees to be paid by merchant
establishments to banks for the PoS machines reducing to try and
reduce the losses of the banks.
 Definitely, there is a going to boost to the banks and payment gateway
companies through digitizing of payments. As a proportion of total
personal consumption expenditures, digital transactions in India were
recently just 8%, given the increase in digital payments, this is expected
to go up to 36% by 2027.
 Many banks are exploring the option to launch contactless credit and
debit cards which would use near field communication (NFC) mechanism
allowing customers to transact without having to insert or swipe the
card. It is estimated that India will move rapidly to a digital payments
economy in as little as seven years.
 2. Retail Sector – Retail sector is emerging as one of the largest sectors in
the economy. The total market size is estimated to be around US $ 672
billion in 2016, expected to grow to US $ 1.3 trillion by 2020. The
organized retail penetration is low at 8-10 percent as compared with 80
per cent in the US. This indicates a very strong growth potential. While
 the penetration is low in this organized retail segment, the sector is
growing at a CAGR of 20-25 percent.
 In 2020, it is estimated that organized retail segment penetration would
be at 18-20 per cent and unorganized retail penetration would go up to
80-82 per cent. As of now, organized retailers and consumers are keen
and willing to use digital payments and use the online platform for
transactions, there is a huge untapped potential among the unorganized
sector which has to be addressed through the penetration of digital
media and consumer and retailer awareness.
 Government has taken a lot with the ease of internet access and
increasing spending capacities, young India is spending money online in
a big way.
 At the first glance, retail will be affected in a big way by youngsters’ with
access to smart phones at their fingertips and internet. There has
already been a lot of research on online shopping habits of consumers,
payment gateways being used and so on .
 Availability of big data, the speed of the social media, new avenues of
advertising and promotion and retail polarization will help in the
exponential growth of the industry. FMCG and retail players are taking
on enhanced strategies for digital marketing and are using advanced
tools to understand consumer behaviour patterns and shopping habits.
Revenue of e-commerce companies is expected to US $ 120 billion by
2020.
 Government has run lot of initiatives to educate e-commerce and
encourage it. With the ease of internet access and increasing spending
capacities, young India is spending money online in a big way. Certain
trends & milestones - (i) The mobile wallet industry is expected to
 maintain its current pace of expansion and the value of its transaction is
expected to reach Rs 32 trillion (US$ 480 billion) by 2022, growing at a
rate of 126 per cent. (ii) Government to allow 100 percent FDI in
ecommerce with the condition that the products have to be
manufactured in India. (iii) India’s largest online retailer, Flipkart, has
raised at least US$ 2.5 billion from SoftBank Vision Fund to maintain its
dominance in the Indian e-commerce market and to fight against its arch
rival Amazon India. (iv) Google plans to set up its first data centre in
India in the city of Mumbai by end of 2017, to improve its services to
local customers wanting to host their applications on the internet and to
compete effectively with the likes of Amazon and Microsoft. (v) SAP SE,
in partnership with the Associated Chambers of Commerce of India
(ASSOCHAM), has rolled out a knowledge sharing resource centre which
will serve as a one-stop portal for businesses looking to adopt or migrate
to technology that will make them future ready.
 Every business owner wants to go digital and a lot of firms are
mushrooming to provide this knowledge and expertise. This boom in
retail a been enabled largely also by multinationals trying to capture
rural BOP markets using innovative strategies and tying up with social
entrepreneurs at rural and semi urban levels who have enabled driving
the success of the business forward.
 3.Technology Sector – The global sourcing market in India continues to
grow at a higher pace compared to the IT-BPM industry. The global IT &
ITeS market (excluding hardware) is pegged at US$ 1.2 trillion in 2016-
17, while the global sourcing market increased by 1.7 times to reach US$
173- 178 billion. India remained the world’s top sourcing destination in
2016-17 with a share of 55 per cent. Indian IT companies have set up
 over 1,000 global delivery canters in over 200 cities around the world.
Software is like the central nervous system of technologies driving
digitalization.
 As far as talent is concerned, in 2013, United States led the world in
software developers; it had about 3.6 million software developers in the
labour force. India, meanwhile had 2.75 million, but by the end of 2017,
India will have 5.2 million developers, an almost 90 percent increase, as
against 4.5 million in the US, which is a 25 percent increase.
 Digitization has ensured a new layer of connected intelligence. Every
company is today trying to strategize ways to get its employees and
customers into the digital loop by creating a simple interface medium.
 Be it the most recent ITC asking consumers to click a selfie with the
Sunfeast biscuit packets and send it using whataspp (a simple to use
communication and sharing medium) to the elaborate offering of simple
cost effective handsets with ERP packages to empower its Shakthi
Ammas by Hindustan Lever, HUL has time and again leaped to create
such powerful sustainable and loyalty driving strategies for success.
 Today almost every company is using the applications, software as
means to cater to customers and remain in the top of mind recall. The
internet industry is likely to double to reach US $ 500 billion by 2025.
The number of internet users in India is expected to reach 1000 million
by 2025. While at the top end of the technology platform we have the
seamless integration of interactive technology such as Virtual Reality,
Artificial Intelligence, wearable, live streaming, drones etc at the bottom
end are simple handsets for the rural poor with low literacy levels or
even the urban ageing people.
 Companies offering technology and solutions will have a huge leap in
business growth boosted by the digital revolution. Every company via
media outsourcing digital bandwidth will ensure digital space and
movement.
 Certain milestones and trends- (i) The Government of India has allocated
Rs 10,000 crore (US$ 1.5 billion) for Bharat Net project under which it
aims to provide high speed broadband to more than 150,000 gram
panchayats by 2020-2024 (ii) The Bharat Interface for Money (BHIM)
app, an Aadhaar-based mobile payment application launched by the
government that will allow users to make digital payments without
having to use a credit or debit card. The app has already reached the
mark of 15 million downloads. (iii) Wifi facility is being set up for around
10.5 lakh villages by March 2024 with an estimated investment of Rs
5,700 crores ) and the government expects to start broadband services
with about 1,000 megabit per second (1 gbps) across 1 lakh gram
panchayats by the end of this year. (iv) A free Doordarshan DTH channel
called DigiShala has been set up, that will help people in the rural and
semi urban segments and with low literacy also to understand the use of
unified payments interface (UPI), USSD, aadhaar enabled payments
system, electronic wallets, debit and credit cards, thereby promoting
various modes of digital payments. (v) The Telecom Regulatory Authority
of India (TRAI) shall release consultation papers ahead of framing
regulations and standards for the rollout of fifth-generation (5G)
networks and Internet of Things (IoT) in India. (vi) Digital commerce
market in India is set to grow at 30.4 per cent year on year to US $ 34.11
billion by December 2022. (vii) Indian technology companies expect
India’s digital e commerce to have the potential to reach US $ 4 trillion
 by 2024 as against the GOI estimates of US $ 1trillion. (viii) Employees
from 12 Indian start ups like Flipkart, Snapdeal, Ola etc have gone on to
form 700 startups on their own.
 Most of the programs in IT are India is the topmost off shoring
destination for IT companies from across the world. Having proven its
capabilities in delivering both onshore and off-shore services to global
clients, emerging technologies will now offer an entire new gamut of
opportunities for top IT firms in India. US$ 150 billion Indian IT industry’s
export revenue to grow at 7-8% and domestic market revenue is
projected to grow at 10-11 per cent in 2023-24.
 4. Healthcare Sector – Healthcare has become one of India’s largest
sectors in terms of revenue and employment. India’s healthcare sector is
growing at a 15 percent CAGR to reach US $ 158.2 billion by 2022.
Healthcare comprises hospitals, medical devices, clinical trials,
outsourcing, telemedicine, medical tourism, health insurance and
medical equipment. Deloitte has predicted that with increased digital
adoption and cost efficiency being the biggest advantage, the Indian
healthcare market, which is worth US $ 110 billion, will grow to US $ 320
billion by 20224. Rural India which accounts for 70 percent of the
population will emerge as the potential demand source.
 Economic prosperity would improve affordability for generic drugs in
the market. With digitization, there will be more demand for and need
of medical services among the lower segment of the population. As of
now, they have limited access to well equipped services.
 Online pharmacy and healthcare service companies are slowly realising
the transition. Many buyers in urban locations are moving to purchase
 medical supplies on a monthly or fortnightly basis from onliners such as
Netmeds and Medplus.
 The country has also become one of the leading destinations for high
end diagnostic services with tremendous capital investment for
advanced diagnostic facilities. India’s healthcare sector is vast and full of
opportunities, as of now only tip of the iceberg has been touched by the
digitization movement but the challenges and opportunities are high in
this sector. Most healthcare related companies are yet to awaken to tap
the digital avenues.

 5. Education Sector – India has an important place in the global

education industry. We have more than 1.5 million schools with over
260 million students enrolled and around 751 universities and 35,539
colleges. We have one of the largest higher education systems in the
world. India has become the second largest market for e-learning after
US. The sector is pegged at US $ 2 billion and is expected to reach US $
5.7 billion by 2024. The distance education market is estimated to grow
at a CAGR of 11 per cent during 2016-2020.

 Certain milestones & trends – (i) The ministry of Skill development and
entrepreneurship has launched the Pradhana Mantri Yuva Yojana is
expected to provide entrepreneurship education across India targeting
700,000 students. (ii) Various government initiatives have been adopted
to boost the growth of distance education market besides focussing on
new education techniques such as E-learning and Mlearning. (iii) The
Pradhan Mantri Grameen Digital Saksharatha Abiyan has been given a
target to make 60 million rural households digitally literate. Which will
 be a huge transformation for he knowledge economy, this would enable
a lot
of people in the BOP segment to get digitally literate and improve their
technological expertise.
 Many corporations looking at partnering with NGO members in their
rural and BOP segment initiatives would largely benefit from this
program.
(iv) The Digi Dhan Abiyan (digital financial literacy program) to educate
over 10 million people on e-payments in rural India. Microsoft Co-
founder Mr, Bill Gates expects this to be the biggest game changer
which can make India the world’s largest digital payments economy in
seven years time.
(v) The government along with the United States Agency for
International Development to create awareness about digital payments
across 60 million traders and merchants across the country.
(vi) Certain companies in partnership with educational institutes have
launched initiatives called ‘Smart Campus’, where more than one million
students through digital and other e-learning techniques will be trained
in the field of IT and Banking by 2024.
 6. Media and Entertainment Industry – This industry has been largely
driven by increasing digitization and high internet usage over the last ten
years. Internet has almost become a mainstream media for
entertainment for most people. The fact that India has more than 50 per
cent of the population below the age of 25 years and today most of the
youth are equipped with mobile phones and internet, media and
entertainment has grown in a big way. Digitization has given the biggest
growth spurt in this industry. Radio, television, and music entertainment
 modes can be had anywhere anytime. The advertising industry is the
second largest growing industry in the Asian region after China. This
industry is expected to grow at a CAGR of 13.9 per cent against a global
average of 4.2 per cent. The Indian television market is expected to grow
at CAGR of 15.5 per cent to reach US$ 15.2 billion in 2024.The
entertainment industry is dominated by the television segment itself,
with this segment grossing 44.24 per cent of revenue share in 2020,
which is expected to grow further to 48.18 per cent by 2024. Television,
print, and
films together account for 79.54 per cent of market share in 2024.
 Certain trends & milestones –
(i) Government of India has taken up various initiatives such as digitizing
the cable distribution sector to attract greater institutional funding,
increasing the foreign direct investment limit from 74 per cent to 100
per cent in cable and DTH satellite platforms, and granting industry
status to the film industry for easy access to institutional finance. This
has pushed
further the new entrants and employment opportunities.
(ii) Growing internet penetration and data consumption is definitely
going to increase digital advertisement spend in India at a compounded
rate of 30.8 per cent between 2024 and 2025.
(iii) Given the growth possibilities backed by digital technology and
government initiatives, the media & entertainment industry will be able
to create immense employment opportunities. With increasing
penetration of internet and digital mediums, the digital segment is
expected to outperform other segments of the M & E industry.
4. IMPACT OF DIGITIZATION ON ECONOMY AND BOP SEGMENT:
 BOP definition in India – Information and Communications technology
(ICT) technologies today are far more pervasive than they have been in
the past. More people, especially at the lower end of the income
pyramid have access to a mobile phone than to electricity. This has
created a need and an opportunity for policymakers to include all
segments through a
digital revolution in India. The base of the pyramid is by far the largest
percentage of the population and market in India.
 Digitization effects – we are looking at digitization from a three pronged
view of certain determinants which we consider to be the pillars or the
basic needs of a vast majority of the population and the indicators of
momentum in the economy –
 1. Economic
2. Social
3. Capital Resources
1. Economic - The prime factors in the digitization program have been
the universal biometric identification system (Aadhar), measures to
boost financial inclusion (JanDhan), move to a fully online value added
goods and services tax system and impetus on the implementation of
real time payment systems.
 From an economic perspective the main aspects that will depict growth
and momentum are –
 i. GDP growth
 ii. Job creation
 iii. Rising levels of income
GDP Growth Rate- As per the Mckinsey report, the Indian economy
coupled with a fast paced smart phone and internet penetration is
 expected to grow to be the third largest economy in the world with a
GDP of US $ 6 trillion, we can expect a growth to take India to be among
the top five equity markets in the world with a market capitalization of
US $ 6.1 trillion by 2027. India is also expected to be the third largest
listed financial services sector in the world with a market capitalization
of US $1.8 trillion by 2027 .
Job Creation & Income enhancement capabilities- In any economy some
of the deciding factors for measuring the implication of a digitization
program is the adoption and usage of digital technology, reliability,
pricing of the digital interface initiatives and ease of use being
predominant, these, in turn, are said to determine the impact on
employment, infrastructure facilities available, quality of life, access to
public services and so on. As per the Price Water House Coopers survey
amongst 150
nations, it is seen that an increase in digitization of ten percentage
points triggers 0.50 to 0.62 per cent gain in per capita GDP. In the case of
the
digital India program, the government has put in motion machineries
right at the grass root level to ensure that the lives of the people living in
even the remotest low income segments with poor or limited access to
digital technologies are driven to adapt at an economical pace to
digitization. It is going to be an exercise that has strategic long term
benefits to raise the socio economic levels of the society. Across the
world, both developed and developing economies are reaping benefits
for digitization.
 Researchers have analysed that the developed countries are getting
higher economic benefits from digitization; this could be because the
 basic infrastructure and other job facilities are already in place. But it has
been seen that the peak of the effects more or less stables out and the
effects of growth for digitization are measurable as they depend on
domestic consumption and in most cases these countries outsource
lower skilled work to other cheaper labour countries in the emerging
markets. Thus, for them gains come from the effect of digitization on
employment
rather than from its influence on growth (World Economic Forum).
Digitization also has a significant impact on job creation in the overall
economy: an increase of 10 per cent in digitization is found to reduce
the nation’s unemployment rate by 0.84 per cent (PWC Report). The 6
million jobs that were created by the digitization effects were found to
be 94%
from emerging economies and 6% from North America and Western
Europe.
According to the World Economic Forum, a country which gains 10
digitization score, reduces unemployment by 1.02 per cent .
 The effects of digital technologies in future days are unknown, but
challenges related to digital technologies have shown the magnitude of
the shifts in employment. While we positively look at and pre-empt
employment opportunities, job losses are going to be a reality as
technology transforms manufacturing and services in the coming years,
this further raises questions about how quickly new jobs will be created
and about the future of economic development models based on
exporting labor-intensive manufacturing products.
 The technology frontier is expanding quickly, with recent breakthroughs
in self-learning artificial intelligence propelled by the rising amounts of
 data being generated by mobile phones and sensors on machinery and
equipment. With this spurt of digital industries, the demand for digital
skills has increased.
 There is an increasing demand for coders, web developers, product
managers and data scientists who would be steering the business to
growth. There would also be requirement of online marketing managers,
product developers and user-experience experts also. Internet has been
able to create 3.6 million jobs in the United States. This is substantially
more than the workforce engaged in agriculture and construction
combined in the country.
 As per a European Commission press release, which mentions that 5 lakh
jobs were created in the US in the last 5 years for the development of
mobile application and IT related. The digital space is creating more jobs
because of the thriving digital ecosystem. In addition to this, it has been
forecasted that digital employment would grow by 15.4% by 2024. An
extensive study in France showed that 2.6 jobs are created on every job
destroyed by internet.
 Analyzing 15 years, the report found that 1.2 million jobs were created
by the internet and there was a loss of 5, 00,000 jobs . Essentially,
digitization, also calls for re-skilling and new skills development, the Skill
India initiative is aimed at re skilling India in the new direction so that
the upscale of necessary skills can take place to complement job losses
and new technology job opportunities.
 Continuous innovation and creative thinking would be required for
facing the challenges of the digital business world. For creating a thriving
presence in the increasingly digitalized globe, India needs to be a digital
market maker.
 To unlock the potential of internet in the Indian economy, in broader
sense, accessibility, awareness and regulatory framework for internet
have to be improved. This throws a challenge to the policy makers for
designing sector digitization plans, building capabilities and enablers,
and jump-start and monitoring ecosystem.
2. Social – Any progress in society should bring with it sustainable
development to the population. Economic barometers could take the
form of GDP, National Income etc., but the human development index,
societal value creation forms the basis of determining successful
transformations of masses to higher levels of sustainable socio economic
development. At a social level, we are looking at the following aspects –
(i) Access to basic services – Health, education, sanitation, financial
services etc.
(ii) Improvement in quality of life
(iii) Innovation
 The world economic forum and its global competitiveness report talks
about human centric economic progress that has become the need of
the current decade. The goal of this human centric progress is
sustainable and equitable welfare of a country’s population. Economic
growth is a precursor to human development and well-being.
Digitization is one gigantic step in the movement towards socio
economic growth as the global competitiveness report suggests for
policymakers across the world, sustainable growth is possible only need
reforms that build up human and physical capital and which leverages
new technologies, this program is
leveraging digital technology to penetrate accessibility across every
person and using this path to create extreme innovation capabilities in
 the emerging markets by developing countries.
 The digital communication technologies have enabled widespread
acceptance of sanitation and healthcare needs and benefits in India.
 Government and corporate bodies have used media and communication
provided and spread awareness and usage of these basic facilities.
 Total factor Productivity has shown a declining trend in both developing
and emerging economies probably due to the infusion of today’s
technologies which do not have the same productivity enhancing
potential as past inventions, additionally, the rise in the number of
services available to consumers which are not priced at the value they
create to the consumer, hence making it difficult to measure their
productivity in the traditional GDP measurement methods.
 The pace at which technological changes are taking place has been
creating unprecedented opportunities and challenges and these
amplified
by the convergence of digital, physical, and biological technologies. The
world economic forum terms this as the characteristics’ of the emerging
‘Fourth Industrial Revolution’ .
 These emerging technologies have immense potential to be a source of
growth, but their truth cannot be underplayed that their evolution is
uncertain. Innovation is going to be a key determinant in future success
and growth amongst economies. It has been seen that a 10 point
increase in digitization leads to a 6 point increase in the country’s score
on the global Innovation Index – a correlation suggesting that as
countries progress in their digitization stages there is more innovation.
 A key challenge would be in unlocking their potential in a way that
benefits society because they can reshape the national and global
 distributions of income and opportunities immensely and lead to
significant structural transformations.
 Digitization has been that one unifying and multiplying force in the
financial sector. Increasing digitization supports better access to basic
services as measured by UNDP’s HDI which tracks global access to health
and education as well as overall living standards.
 The three steps of Jan Dhan (financial inclusion), Aadhar (universal
biometric identification system, mobile penetration and the online
goods and services tax have changed the way India is doing business. It is
rapidly moving India towards financial access and formalization of the
economy. The big growth ingredient is going to be the better credit
delivery. By means of the mechanism of Aadhar, JanDhan and digital
revolution of banking business credit delivery will be easier. Especially,
the base of the pyramid consumers will benefit largely by participating in
this financial inclusion exercise and mobilisation of credit.
 When everyone has access to basic banking facilities and credit
facilities, the dependence on orthodox systems of money market
prevalent in the unorganized sector such as borrowing money from
money lenders at illogical interest rates is diminished to a large extent.
Financial inclusion also brings with it the need for financial literacy.
Financial education is “the process by which financial
consumers/investors improve their
understanding of financial products and concepts and, through
information, instruction and/or advice, develop the skills and confidence
to become more aware of financial risks and opportunities, to make
informed choices, to know where to go for help, and to take other
effective actions to improve their financial well-being.”
 According to the report of Standard & Poor’s, over 76% Indian adults
lack basic finance literacy and they don’t understand the most basic and
key financial concepts.
 Digitalization has revolutionized the way we use banking services and
technological advancement and interconnectivity of the various services
and digitization of various banking related services there was an urgent
need to ramp up the nation’s financial literacy also. The ‘DigiShala’,
which is a free to air channel in Doordarshan has been set up, that will
help people in the rural and semi urban segments and with low literacy
to understand the use of unified payments interface (UPI), USSD,
aadhaar-enabled payments system, electronic wallets, debit and credit
cards, thereby promoting various modes of digital payments and giving
seamless financial literacy to the masses.
 The problem of the lack of data availability for banks and financial
institutions will be a thing of the past. Digital transactions and GST will
leave a data footprint which lending institutions can access and use.
Flow based lending will increase especially with the small consumer and
the small and medium enterprises (SME) sector benefitting.
 Households will benefit with improved credit access. With increase in
consumer lending and credit penetration, households will have a smooth
consumption pattern which will thereby boost discretionary spending.
GST will be a mechanism to get a formal structure to the taxation issue
and do away with dual taxation system, it will also net tax compliance
amongst every business class from a small trader in the informal
economy to a large corporate leading to increased tax revenues for the
economy. The government’s implementation of schemes such as Direct
 Benefit Transfer (DBT), which is a social welfare scheme enabling
transfer of
subsidy benefits directly to the beneficiary’s account apart from saving
the exchequer transaction costs, will further boost compliance of
citizens at every level for financial inclusion.
 Overlooking the predicted growth in GDP to reach trillions of dollars,
even on a simple per capita basis, the annual incomes are expected to
reach $ 4,135 by 2027, which translates that India would move to a
majority proportion population belonging to a upper middle class
income status. A major positive financial move translates to significantly
more Foreign Direct Investment (FDI) opportunities especially in the
financial and infrastructure sectors.
3. Capital – Both human and technical capital form the backbone of the
nations. Be it physical and capital in the form of infrastructure i.e., roads,
electricity, digital infrastructure. The initiative to lay national optical
fibre network in all 2.5 lakh gram panchayats, broadband for the rural
and broad banding for all urban will mandate communication
infrastructure in the whole of the country. The government has
completed the task of providing nationwide information infrastructure.
The second important step of providing easy mobile connectivity has
also
been in progress and all villages are covered through mobile
connectivity. The aim is to increase network penetration and cover gaps
in all villages. Over the last decade, the productivity in the construction
industry in India
had stagnated and gone over budget by 80 per cent, primarily because
of the stakeholders reluctance to adapt to digital tools and platforms.
 With the push by government bodies and the positive influence of
manufacturing sector has reduced costs and improved productivities by
pursuing digital solutions, the construction sector has also started
adopting digital tools and platforms. Advanced analytics, automation,
robotics, 5-D building information modelling (BIM) and online
document- management and data collection systems are in wide use
today.
 This has enabled higher productivities, reduction in costs and on time
completion of projects rarely going over budget. This cost and
productivity benefits are too large to ignore and these digital tools are
amply available, making it easy to adopt and use. Even government
highway infrastructure projects have greatly benefitted by their usage,
the short sight in this could be the myriad options available and the
failure to identify a portfolio of digital solutions that address major
issues. Construction has been at the forefront of innovation but, they
have the
leverage of learning from other industries in the course of the last five
years.
 As per the McKinsey Global Institute report, over the last 20 years, the
industry has fallen behind in innovation, in an analysis of 22 industries,
construction was second to last for overall digitization rates, ranking only
above hunting and agriculture. However, several large Engineering &
Construction (E&C) companies have begun to digitize in the recent years
and they will be leading in innovative digital platforms practices.

CONCLUSION:
 Many exploratory and quantitative research studies have shown that the
impact of digitization on a nation’s economic growth is phenomenal. The
PWC research covering 150 countries in various stages of development,
which divided economies on the basis of their level of digitization
showed that the impact can be felt relative to their digitization scores,
and countries such as Germany, United states which are high on the
score and in the advanced or nature stage of digitization have made
significant strides in addressing ICT usability and also developing a talent
base to take
advantage of available technologies’, products, and services while at the
same time working on improving the speed and quality of digital
services.
 India can now take advantage of the trail set by the developed countries
by learning from their best practices, mature technologies, and markets.
This could bring in the much needed acceleration also in the digitization
programs. The challenge now lies in taking the movement forward with
the same speed, developing appropriate econometric methodologies to
determine the impact that mass adoption of digital technologies can
have on economies and societies and government effectiveness. India’s
digital initiatives have already had far reaching impacts on the socio
economic lives of people in the base of the pyramid segment and will
only increase in the days to come.

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