R Chandrashekhar talks about demonetisationís impact on digital economy and the growth of IT industry in the Trump era
Taru Bhatia | December 27, 2016 | New Delhi
From demonetisation’s impact on the digital economy to the growth of IT industry in the Trump era, NASSCOM president R Chandrashekhar shares his views with Taru Bhatia.
Do you think demonetisation is a right step towards a cashless economy?
While recognising the inconvenience to a large section of society, NASSCOM welcomes the strong fillip demonetisation is giving to digital payments. For the first time, there is a major driver that is forcing people across sectors towards digital payments, via cards, electronic fund transfer and e-wallets. Many are using digital payments for the first time. India is predominantly a cash economy, and there were efforts underway to incentivise digital payments, even before demonetisation, which is an unexpected bonus for these efforts. While the digital infrastructure as well as regulatory framework may not have been fully prepared for a nationwide leap to digital payments, just as cash logistics were not fully ready, this move is providing the thrust, and bringing to the surface issues in payments regulation, infrastructure and technology that need to be addressed.
Cyber threats pose a great risk to digital economy, the most recent being the hacking of data of 3.2 million debit cards. Is India actually prepared for a digital economy?
Cyber crime and technology-led frauds are global issues. India, being the global focal point of the technology industry now, has an additional responsibility to equip stakeholders across the world to curb technology-led frauds. As part of its ongoing efforts, NASSCOM has already constituted the Consumer Interest Protection Task Force [CIPTF], which is aimed at prevention, detection, reporting and investigation of technology fraud through a common code of practice featuring standards security, privacy and ethical practices. NASSCOM is engaged with various law enforcement agencies and consumer groups by training them in pursuing the cases of fraud rigorously. NASSCOM has also been instrumental in creating the cyber security task force that aims to build India as a global hub for providing cyber security solutions, developing an R&D plan and a workforce of cyber security experts. The taskforce members include industry leaders across IT, business process management [BPM] and internet, leaders from user organisations like banks and telecom companies as well as representatives from the government and academia.
Last-mile connectivity is still a challenge. What is lacking?
India has done rather well with telecom connectivity, covering most of its territory and population with wireless mobile telephony. A big challenge ahead is extending this to digital internet access. There are over 350 million internet subscribers, 94% of them mobile; extending this to the next 500 million and getting them onto Digital India is a huge challenge. This will partly be met by the massive, universal service obligation fund [USOF]-funded fibre optic project called BharatNet, which however will need to be complemented by sustainable business models that allow private players and startups to provide wireless internet access, especially to rural India using BharatNet, and by aggressive 4G expansion plans of telcos such as Airtel, Vodafone and Idea as well as the newer Reliance Jio.
The even bigger challenge is the physical last mile of road and rail infrastructure, something that is impeding progress and rapid penetration of commerce, including e-commerce, compared with, say, China.
US president-elect Trump has maintained a strict position against IT outsourcing and immigration. What kind of impact do you anticipate?
We are optimistic that the president-elect Trump’s administration will continue to focus on keeping the USA’s strategic relationship with India a high priority and on providing a boost to US-India bilateral trade and investment. We look forward to working with him and his administration and leaders of the house and senate to highlight our sector’s contributions to the US economy. Some of Trump’s observations during his campaign concerning high-skilled immigration and outsourcing were based on incorrect information put out by critics. Our sector plays a key role in helping the US businesses innovate and grow and make corporate America more competitive.
NASSCOM anticipates negative export growth in the IT sector. What are the major influencers?
NASSCOM does not anticipate negative export growth. We had merely made a slight downward correction of our growth guidance for the current year from the original 10-12% to 8-10% in constant currency. While India continues to consolidate its position as the global hub for IT-BPM services, shortterm international political and business scenarios have impacted the Indian IT’s performance – Brexit, revisions in the UK visa laws, increase in H1-B visa fees, US presidential elections, slowdown in banking, finance, services and insurance [BFSI] sector, and cautious client behaviour. On the other hand, the long-term view of the industry is bullish. The industry is on track to meet the targets set for itself for 2020 and 2025. Global software and IT services are set to grow at a healthy pace of 7.2% and 4.4% respectively in 2017 and India’s share is increasing steadily.
What do you think about the government’s IT spending? How do you see the project implementation and outcomes?
The centre and state governments in recent years have been proactive in the adoption of IT services from external suppliers, and in employing latest technologies for efficient governance. The present government’s Digital India initiative is among the country’s most significant in history as far as the IT-ITeS [information technology enabled services] sector is concerned. With all major global players operating in India keen to support the Digital India, Smart Cities and Make in India programmes, this is testimony to an improving positivity towards India. The government is focusing on creating a business climate that is open to global business and investment, which is the key to unleashing India’s economic potential.
How can India emerge as a global digital power? Are we moving in the right direction?
India is a global technology services power and outsourcing hub. We need to leverage that strength and experience in the arenas of new-age digital opportunities, both for itself and for world markets.
India’s move towards the digital opportunity is helped by the government’s efforts, especially Digital India focused on expanding the digital infrastructure, improving the delivery of government services, and empowering citizens through improved access. The government departments have committed more than $16 billion to the programme. To become a global centre for innovation in digital technology, India cannot sit passively and watch the market develop. Instead, it needs to move proactively to create the right domestic conditions for the technology and business services industry to flourish in the new digital environment. The development agenda should bring government, industry and academia together. As digital technologies become more common, providers must create an attractive value proposition for the market, for instance, by taking on the larger role of technology advisors, offering solutions tailored to the local market, sharing risks, and sharing capabilities with clients to aid in seamless migration towards digital.
Where do you see domestic and offshore IT market moving five to ten years down the line?
Driven by the adoption of digital technology, the total addressable market for global technology and business services will likely expand to about $4 trillion by 2025, growing at an average annual rate of about 3.6%. As the industry grows over the next decade, however, its mix of technologies and demands will change significantly. The digital transformation that is impacting the global economy is also creating new imperatives for India’s growth, with many companies adopting digital technologies into their business models. India’s move towards the digital opportunity is also helped by government efforts. With this, the industry is marching steadily on the path to reach $350 billion by 2025, with digital revenues spearheading growth.
(The interview appears in the December 16-31, 2016 issue of Governance Now)
Among one of the blatant signs of economic inequality, just eight men own the same wealth as the poorest half of the world. In a report titled, ‘An economy for the 99%’, Oxfam Intern
India has fared worse than its neighbours: Nepal, Bangladesh, Pakistan and China, in an inclusive development index. World Economic Forum’s Inclusive Growth and Development Report 2017 said that India, with a score of only 3.38, ranks 60th among the 79 developing economies on the IDI (inclu
Minister of steel Chaudhary Birender Singh chaired a meeting of the parliamentary consultative committee attached to the ministry of steel in New Delhi on initiatives taken by the steel ministry to enhance demand and production of steel in the country and status of completion of projects by the PSUs.
Manufacturing growth has underpinned India’s recent economic performance, which may help buffer demand for the region’s commodity exporters, said an International Labour Organisation (ILO) report. The report “World Employment Social Outlook - Trends 2017” said that ec
The dramatic rise in India`s oil demand shows no signs of faltering, leading analysts say that the country will remain a driver of Asian growth in 2017. Consumption is expected to rise by 7-8% this year, outpacing China`s demand growth for the third consecutive year, said Platts Analytics i
This time of the year, the corridors of Rail Bhawan on Delhi’s Raisina Road, would normally have been abuzz with activity as officials would be at work tightening the nuts and bolts of the railway budget. The exercise was so time consuming, officials would have to sometimes go without sleep. The effo