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Huge rise in e-shopping signals Digital India takeoff

This is going to be music to ears for the Modi government, who, in the last 50 days, stressed that with demonetization going digital is the future for India.

A study conducted by industry lobby group Assocham and business consulting firm RNCOS estimates that average wallet spends in retail transactions are likely to move from Rs 500-700 in 2016 prior to demonetization to Rs 2,000-10,000 in the near future. The study also estimates that mobile wallet transactions in India are likely to grow at an annual growth rate of over 160 per cent from Rs 5 crore in 2016 to Rs 26,000 crore in 2022 on the back of increasing smart-phone penetration in India coupled with a resilient e-commerce sector.

Such statistics give hope for an economy in a post-demonetization scenario. However, a complete transition can be achieved only when road-blocks like poor internet speed, erratic networks and absence of last-mile connectivity can be overcome.

Compared to other developing countries in the Asia-Pacific (APAC) region, India still lags behind when it comes to average internet speed. While South Korea, Hong Kong and Singapore offer average internet speed of 26.3, 20.1 and 18.2 MBPS, India manages to offer a speed of only 4.1 MBPS. Even other developing nations in the APAC region like Sri Lanka, Indonesia and Thailand, offer an average MBPS speed of 6, 6.4 and 11.7 MBPS respectively, much higher than the Indian network speed.

The other problem is internet penetration. According to estimates by TRAI only 250 million are net connected. In contrast, an Assocham-Deloitte study states that currently about 950 million Indians are out of the reach of the internet, despite mobile data plans being one of the cheapest in the world here and the retail prices of smart phones steadily declining.

DS Rawat, Secretary General, ASSOCHAM told DNA that existing government infrastructure assets should be further leveraged for providing digital services at remote locations.

“Digital literacy needs to be increased by providing institutional trainings in schools, colleges and universities. An integrated approach between Digital India and Skill India needs to be constructed to design programmes and impart training. All the stakeholders involved in imparting digital literacy—be it the ministries, institutions or private players—need to work in coordination to obtain the most effective implementation,” he said.

To enable more Indians to become net connected, the government can and should invite private stakeholders to help bridge the internet and tele-density divide between developed and under-developed areas in India.

Currently tele-density figures for a few states vis-a-vis the national teledensity figures are dismal. It’s not just states. Indian rural areas have a teledensity of only 51 per cent compared to 153 per cent for urban areas, a big divide for a country looking to become ‘Digital India’. Clearly, the government have a lot more to do before all of India can truly become net savvy.


950 million – Indians NOT connected

250 million – Indians connected


India – 4.1 MBPS

South Korea – 26.3

Hong Kong – 20.1

Singapore – 18.2

Sri Lanka – 6

Thailand – 11.7

Net Reach

(Rural Vs Urban)

51% Rural

153% Urban

*Trai (figures are approximate)

Worst Tele-density States

1. Bihar – 36%

2. Madhya Pradesh – 40%

3. Assam – 44%

4. Orissa – 50%