India@75: Technology engines enrich our Azaadi

While the country won its political freedom in 1947, citizens only started enjoying economic Azaadi en masse post the liberalization reforms in 1991. After Independence, PM Nehru imposed the License Raj with quotas and pricing controls, effectively suppressing private capital.

India@75: Technology engines enrich our Azaadi
The nation exports $175 billion of software, employing 5.1 million people and comprising 60% of the global software outsourcing market. (Representational image)

As India commemorates 75 years of Independence with the Azaadi ka Amrit Mahotsav celebrations, technology undoubtedly lends an exciting dimension as we ruminate on the next 25 years in the run-up to 2047.

While the country won its political freedom in 1947, citizens only started enjoying economic Azaadi en masse post the liberalization reforms in 1991. After Independence, PM Nehru imposed the License Raj with quotas and pricing controls, effectively suppressing private capital. As a result, India grew at a mere 3.5% CAGR from 1950 to 1980, less than the world’s CAGR of 4.5% and considerably less than Asia at 6.5%.

Post liberalization, India’s nominal GDP grew from $275 billion in 1991 to $3.16 trillion in 2022, amounting to a formidable CAGR of 8.2% in dollar terms. A significant contributor to India’s tremendous growth trajectory is the collective effort of India’s entrepreneurial class—unshackled in 1991 and free to pursue exciting opportunities. In particular, the IT industry and other technology-based ventures have driven India’s growth and are poised to keep accelerating over the coming decades.

Today, India dominates this field like no other field globally.

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The reason the IT services industry grew at a monumental pace after liberalization was because high customs and import duties on hardware were abolished. Tax exemption schemes were introduced to generate sufficient internal resources, accompanying the removal of excessive restrictions on travel, pricing, and foreign exchange from the pre-liberalization years. Citizens enjoyed economic freedoms for the first time since before the British era. An extraordinary class of entrepreneurs rose, and the trend continues today with the elevation of India’s startup ecosystem on the shoulders of the phenomenally successful IT industry.

The nation hosts 75,000+ startups, having collectively created $450 billion of value with over 105 unicorns. Nearly $120 billion of capital entered the ecosystem between 2014-2021, and already in H1 of CY 2022, $16 billion has been raised by Indian startups. India might attract an additional $120-150 billion of capital in the 2022-25 timeframe, leading to a combined ecosystem value closer to $1 trillion and 250 unicorns by the end of 2025. The nation currently hosts the world’s third-largest startup ecosystem, after the US and China, on track to soon be the second-largest.

Also read| Tech standards: India’s chance to lead

PM Modi gave a clarion call on August 15, 2015, for Digital India and Startup India. Much of India’s progress in digitalization has happened since then. India has risen as a global pioneer of digital public goods—a multiplatform set of utilities developed in a public-private partnership model that has democratized access and brought digital inclusion to the fingertips of 1.4 billion Indians.

Today, India is undoubtedly among the Top 3 digital powers in the world. This is a product of the nation’s entrepreneurial class and the proactive policies by successive governments across parties over the last 30 years. As India looks ahead at the next 25 years in the run-up to the 100 years of Indian Independence, it is safe to say the country will be at the heart of the world’s digitalization and technology democratization movement. The nation will also ensure that digitalization continues to underpin India’s socio-economic accomplishments.

In order to consolidate and maintain India’s technological leadership globally, there is a need to invest in higher education—to increase access, equity, and affordability and improve the quality of India’s institutions. The nation must focus on producing specialists by expanding the pipeline of Doctorate and Master’s scholars in the areas of science and technology. Premier quality research is also essential to maintaining an innovation pipeline. India lags other economies in research and innovation spending and must deploy timely resources to remedy this. Technology will accelerate every socio-economic growth engine, and India cannot afford to fall behind in developing these platforms.

The National Education Policy 2020 provides a future-oriented framework for R&D, including the oft-mentioned National Research Foundation (NRF) with an initial outlay of ?50,000 crore over five years. When instituted, the NRF will fund academic research that will create the pipeline toward productization and deployment of world-class technology, similar to how the US and, more recently, China maintain tech leadership.

As we celebrate 75 years of Independence, all Indians can rejoice in having world-class IT and other technologies-based ecosystems. Technology platforms have already made significant inroads in empowering every single citizen. This is evident in the millions of mobile-linked bank accounts, surging UPI transaction volumes, consumption of digital modes like video and audio, and the low cost of telecommunications. These accomplishments are, indeed, cause for celebration as we lay down the framework for the next 25 years of growth and become a true global power.

The author is Chairman, Aarin Capital Partners

With Nisha Holla, Technology Fellow, C-CAMP

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