Digital economy in rural India

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Balaji Viswanathan is VP of Products at Invento – changing engineering education in India
WAYS TO TACKLE THIS : Remove all taxes & duties involved in the import and sale of smartphones & data gear.
Incentivize the aggressive rollout of data coverage and increase the government funds for supporting cellular/satellite data coverage in remote areas.
A one-time subsidy of Rs. 1000 to a rural poor to buy a smartphone complying with government’s rules on Aadhaar & digital signatures. They could buy this with their Aadhaar card and the manufacturers could be forced to pre-install UPI app [instead of their usual bloatware] with a firmware tied to the person’s Aadhaar. Since the entry level smartphones could come down to Rs. 2000 with the scale and without the import duties, most poor people could afford this. How do you define a poor? Now, that demonetization is done, you know how much each person has in their bank accounts. Anyone who has deposited less than Rs. 25000 should qualify [in fact, all future subsidies should be based on this – as that would punish those who use their accounts to deposit other people’s money].
Carrying your smartphone should be like carrying your ID – used carefully and universally. That means women who are denied their phones [due to their local/family compulsions] will get the access too.
Build a new app to access all government services in one place in their native language driven mostly by voice and icons. A person should be able to open up the app and access forms, get food rations, banking services etc. Have this app pre-installed in the government smartphones.
Have the third app for reporting all kinds of issues with governance with location tracking- school closed, ration rice not available, road broken, drainage issues etc. This app again comes pre-installed and the data from this should be audited by a separate government body and data should be made available to all.
Have free wifi & USB charging stations in all ration shops, post offices, railway stations and other government offices. A person coming to do transaction with the government could be encouraged right there to use their new smartphone to buy train unreserved tickets, food rations, postal stamps etc. Cut the existing counters by half and use the staff to teach the people coming in.
Embark on a massive tech literacy program. Rope in companies that can go around rural India and teach people basics of Internet, e-commerce and mobile wallets with their new smartphone. Emphasize the importance of passwords and secrets. Most in rural India can get it quite intuitively if told properly. Maybe a subsidy of Rs. 100 per person in rural India for the basic class.
For the first year of that new person’s smartphone usage, the government could subsidize their basic data plan – say Rs. 30/month. You can rope in companies like Facebook, Microsoft, Google, Amazon, Paytm, Ibibo and Flipkart to foot in part of the budget for this [with no strings attached on what sites they could use].
For any mobile payment transaction below Rs. 100 there should be no transaction fees by law and banks should be asked to bear the costs. The shopkeepers who still don’t accept cards after that time could be reported for tax evasion.
Have a separate fund for improving online security. The government should insure all the poor in this new plan to avoid them being liable for hacks and data thefts. They should also fund new encryption algorithms and end to end security of transactions.
The government should plan this so aggressively that it should achieve all this by the end of 2017. It is ambitious, but possible. The budget is less about Rs. 80000 crores [40 crore rural poor @ Rs. 2000 for the total cost of all subsidies above] and could be easily paid with the RBI’s profits from demonetization [even if 95% of black money comes back to the banks].
Imagine having the rural poor able to use their new smartphones for better news access, weather coverage for farming, getting notification on impending disasters like cyclones, access education programs, access all government forms, get government loans that they qualify for etc. Imagine that world and all of that is within hand’s reach.

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