Loop Holes in Emerging Indian Digital Economy

Digital India is an initiative by the Government of India to ensure that Government services are made available to citizens electronically by improving online infrastructure and by increasing Internet connectivity. It was launched on 1 July 2015 by Prime Minister Narendra Modi. The initiative includes plans to connect rural areas with high speed internet networks. However it’s difficult, if not impossible, to predict how a cashless financial system would work on a large scale. Consumers may expose themselves to unnecessary inconvenience and complications, which are more likely in the early stages of any new technology.

Digital India has three core components. These include:

1.      The creation of digital infrastructure

2.      Delivering services digitally

3.      Digital Literacy

Before going to elaborate on the loop holes in emerging digital Indian economy there are also major advantages

a.      Creation of Digital Infrastructure and Electronic Manufacturing in Native India.

b.     Digital Empowerment of Native Indian People.

c.      Delivery of all Government Services electronically (E-Governance).

d.     A Digital Identification which will verify the end user.

e.     A Mobile for worldwide access to all services.

f.       A Bank account for Immediate Benefit Transfers of subsidies and payments.

g.      The program also aims to eliminate all electronics imports from foreign countries by 2020 and make India an electronics manufacturing super power.

h.     It is planned to connect 550 farmer markets in the country through the use of technology.

Other Advantages:

a.      It will help in decreasing crime if applied on whole.

b.     It will help in getting things done easily.

c.      It will help in decreasing documentation.

d.     Some of the services which will be provided through this desire effort are Digital Locker, e-education, e-health, e-sign and nationwide scholarship portal.

e.     It will ostensibly create a lot of jobs.

f.       It will be a boost to industry; both large and small enterprises.

Digital India without a doubt is a very commendable project and deserves full support. As far no disadvantages could be noticed as it’s an initiative one is talking about. However, the initiative also lacks many crucial components including lack of legal framework, absence of privacy and data protection laws, civil liberties abuse possibilities, lack of parliamentary oversight for e-surveillance in India, lack of intelligence related reforms in India, insecure Indian cyberspace, etc. There are some questions that might trouble a critic mind:

a.      Will the initiative be genuinely inclusive?

b.     Who will the vendors be?

c.      How will corporates recover their costs? Will the promised investments end up as bad loans from banks?

d.     Will the initiative give the government a tool to conduct mass surveillance?

e.     Will the proposed digital lockers for official documentation be reliable?

MAJOR DISADVANTAGES

a.      Government employment might reduce which in turn may lead to civil servants' unrest.

b.     People will use free wifis just for time pass which is current scenario in metros.

c.      Hacking poses a threat to digital transactions.

d.     There will be increase in cyber-crime. A look at recent statistics, in the cases of cyber-crime is increasing day by day. According to the National Crime Records Bureau data of India from 2011 to 2013, 350 percent increase in cyber-crime cases. As can be imagined that the Cyber Crime Digital India is so severe. Consider those with-in the country now is not adequate mechanism to prevent cyber-crime. The cashless economy will see a hike in the hacking of the personal information over the internet such as credit and debit card numbers, PINs, passwords and other sensitive information due to an increase of digital transactions. In short, cyber-crimes will escalate like anything if proper internet security measures are not taken.

e.     The poor section of India who is in majority and is scarcely covered under conventional banking system will suffer a lot, as they are solely dependent on cash for their daily wages.

f.       Sectors such as real estate, retail, restaurants, cement and other MSMEs, where huge cash transactions are involved are going to be affected terribly.

g.      Inadequate internet infiltration, low internet speeds, limited smartphone and broadband penetration, very less PoS machines are the roadblocks towards achieving full digitalization that is here the main substitute for cash transactions.

h.     Funds will always be in control of the third party such as Government, banks, payment interfaces, etc. which lead to extreme uncertainty.

i.        The other major concern is about the safety of the country. Today most of the communal forces and terrorists are using the Internet. Terrorist organization to mislead people are resorting to social media. Those in touch with people through social media are misleading. Recently there have been several instances in which the terrorist propaganda on social media are misleading the youth. Digital India would strengthen the communal forces, it cannot be denied.

j.       Digital India will grow the use of social media. The rumours on social media and increase communal tensions. Rural India is still very backward in terms of awareness, where Internet penetration is the rapid spread of rumours among the people. Was edited by several people share photos and information is instigated. It does not affect the rural population, will be a challenge to find a solution.

k.      There will be a major threat to national security. Digital India after becoming the country will start each job via the Internet. All networking sites, social media and other digital mediums US data centre, exist in other countries, including the UK. So India will increase the risk of data theft. The question is also whether the break has been removed? Digital Locker can scan their precious documents. There is also a risk that hackers are targeting these lockers can also steel documents.

l.        Today the Indian people's first need food, clothing, housing, education and good treatment with such basic things. The first of these requirements are met, then the interference of the Internet grows, so will be able to realize the dream of Digital India. The other essential development that should be made ready first is a robust cyber security infrastructure. With digitisation, vital data such as biometric info, bank details, identity documents etc. will be vulnerable to attacks and need a solid cyber security infrastructure in place.

m.   India has a huge digital gap and to overcome it is hardly possible within given period of 4 yrs. of programme. National fibre optic network is already way back of its schedule. The expectations are too high.

n.     Lack of implementation is basic issue. The National optimal fibre network is behind the schedule and there are no sign of accelerated implementation.

o.     Absence of ‘Privacy Law’ expose the users of these programmes to risk of ‘identity theft’, misuse of database and cyber abuse.

p.     E-governance programme without process re-engineering is just adding another layer without bringing efficiency. Also it would limit the access to vulnerable and marginalized people.

q.     For program to be successful, government needs to address the genuine concerns raised. There is need for ‘privacy law’ and ‘data protection measures’ to increase trust of people in such programs. It would help in increase usage of government services.

r.       Another potential problem is the failure rate of biometric ID systems. These systems may be convenient, but they are far from perfect. In fact, if you research “failure rate of biometric data systems” via a search engine or academic database, you will find some disheartening information. For example, according to a test by the National Physical Laboratory’s Centre for Mathematics and Scientific Computing in the UK, the failure to enrol rate of the fingerprint biometric system is 1%. This means some people might not even be able to enrol in a biometric system using their fingerprints. Glitches such as this cast a doubt on whether biometrics are as reliable as their sales and marketing pitches make them out to be. To many, 1% seems like a small number and not worth worrying about. However, let’s imagine that there are 100 million people wanting to use a biometric system to safeguard their digital wallets. If the failure to enrol rate is 1%, 1 million people would not be able to even use the system – that’s pretty significant.

Risk Factors

Do one still think all of the convenience is worth it? Consider these additional risks:

       I.           If your phone dies, you won’t be able to pay for anything.

      II.           It’s very easy to shut down a digital wallet remotely, and that potentially exposes people’s financial accounts to a new kind of abuse from hackers and government.

    III.           Like any other network technology, there is a high chance that a hacker is working on ways to exploit the system.

    IV.           Once you agree to give out your biometric signatures, you cannot get them back. Many companies are notorious for giving out private information to other firms and governments.

      V.           It is not clear how the theoretical database that stores all of this info would work, nor how access to it would be granted. Databases can be compromised, and this one would be the mother lode for cyber-criminals.

Digital India seems to be a very good initiative, but in the present day India, it will benefit only a select few. Thus, it has come a few decades too early. Looking at the current situation of India, where it is ranked 55/76 countries in hunger list, crippling conditions of education and health, more than 50% population still depending on the overburdened agricultural sector. Illiteracy still prevailing among majority of rural population, etc., one cannot think development will take place at a faster pace by taking up ambitious projects like digital India and neglecting education and health sectors by reducing already abysmal social sector spending. If one compares India's spending on education and health sectors it stands far behind global competitors and the same is conclusive from India’s social indicators. "The problem today is not the digital divide but the divide between rapidly growing technological capability and a slow growth in eliminating deprivation".