Budget 2016: Boost internet infrastructure, digital transaction

February 24, 2016
Photographers take pictures of Apple's new laptop "Macbook Air" during its launch in India at a function in Mumbai February 12, 2008. "Macbook Air", which is priced from INR 96,100 (around $2,450), is the  world's thinnest notebook, according to an Apple press release. REUTERS/Arko Datta (INDIA) - RTR1WZNR

Photographers take pictures of Apple’s laptop “Macbook Air” during its launch in India at a function in Mumbai February 12, 2008. REUTERS/Arko Datta/Files

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Gone are the days when election manifestos were just about roti, kapda, makaan (food, clothing and housing) and budget speeches about bijli, sadak and paani (electricity, roads and water). In the new age of information technology, the whole world is evolving into a knowledge economy. Internet infrastructure and seamless web connectivity are the new equivalents of roads and highways.

It is important for the government to invest heavily on building online infrastructure and make the internet a free entity available for the masses – in public spaces, community centres in villages and educational institutions. In fact, the internet should be considered a basic human right because of the numerous positive effects it can have on education, innovation, communication, and entrepreneurship.

While providing connectivity should be the government’s number one priority, the other should be to ensure that there is a check on quality standards when it comes to various services offered by ISPs and telcos across India. Often what is claimed through advertisement is not what the customers finally get. A billion connected people could lead to a million opportunities and the creation of millions of jobs. Ten years ago, if someone in India using a dial-up internet connection was told that one billion people will watch six billion hours worth of video content a month on a single online streaming website, they would have never believed it. Therefore, YouTube as an idea could never come out of India or other developing countries lacking proper Internet infrastructure.

Another systemic issue that plagues the country is high tax evasion and the prevalence of black money. One way the government can reduce corruption is to promote digital transaction. The moment direct cash transaction between a customer and a bureaucrat is eliminated, the chances of corruption goes down.

A tried and tested way of boosting digital transaction is to offer citizens tax rebates (service tax/sales tax etc.) whenever a payment is made digitally and hence traceable. Similar experiments in South Korea and a couple of European countries proved very successful. Today, a customer has no incentive to make a digital transaction when he/she knows that paying by cash could be a way to get a discount even if it means the retailer could be evading taxes. Hence, it will be great if the government draws up a plan to provide rebates for digital transactions and announce measures for the same in this year’s budget.

 

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