E-governance Overview
A recent study predicted that India could create a digital economy of USD 900 billion to USD 1 trillion by 2030, from approximately USD 175 billion at present . E-governance, an integral component of the overall digital economy, plays a crucial role in harnessing this economic growth in India. The concept of e-governance involves the use of information and communication technology (ICT) to enhance the efficiency, transparency, and accessibility of government services and processes. These technologies have diverse applications, including enhancing government service delivery, optimising interactions with businesses, empowering citizens through information access, and improving government management efficiency. E-governance is not just a technological advancement; it is a fundamental driver of economic growth and a catalyst for overall prosperity for our country. Over the past few years, India has made notable developments in this domain, such as the Aadhar (Unique Identification Authority of India-UIDAI), the e-Courts Project, Goods and Service Tax (GST), etc. The potential to boost economic growth through e-governance is immense.
In India, e-governance has undergone significant evolution, progressing from mere computerization of government departments to a more citizen-centric and service-oriented approach. Notably, India realised the importance of e-governance early on and introduced the National e-Governance Plan (NeGP) in 2006, serving as a comprehensive framework that integrates various e-governance initiatives, focusing on common vision and strategy. Under the NeGP, each state and union territory was encouraged to establish a state wide area network (SWAN). At present, SWAN is currently operational in 34 States and Union territories of which 33 are utilising around 70-72% of bandwidth of the existing link capacity. These networks have interconnected government offices within the state, facilitating data exchange and communication. Another key component under the said plan was the introduction of Common Service Centres (CSC) which act as service delivery points for various government and business services. Currently, more than half a million CSCs are functional (providing over 400 digital citizen services) across the country, out of which, 0.42 million CSCs are functional at the Gram Panchayat level. Also, the launch of MyScheme in July 2022 has further facilitated citizens to avail eligibility-based services. Thus, with an aim to bring government services closer to citizens, enhancing transparency and efficiency, this plan is a reflection of the overarching commitment to bringing e-governance under the ambit of an active national policy framework.
Impact on Economic Growth
The impact of e-governance has been studied and it is established that strengthening e-governance leads to significant positive impact on economic prosperity. Citizen services pertaining to business owners, especially small and marginalised entrepreneurs, have facilitated ease of business, which, in turn, stimulates economic growth. The Government e-Marketplace (GeM), a significant e-governance initiative, established in August 2016, plays a crucial role in digitising the public procurement process. The platform offers various e-commerce features, including easy search, price comparison, order placement, e-bidding, reverse auction, demand aggregation, dynamic pricing, integrated payment systems, and vendor assessment and rating. Currently, GeM has around 3,05,657 buyers with around 12,173 categories of products and services being offered. As per the Ministry of Commerce, GeM portal has facilitated the Indian government to save around USD 5.41 billions since its launch in 2016. The ‘India’s Trillion-Dollar Digital Opportunity’ report by MeitY estimates that the end-to-end implementation of GeM across all government entities in India is expected to reap annual savings of around USD 10 billion to USD 25 billion by promoting vendor competition and reducing payment chain inefficiencies.
Moreover, apart from making government processes more efficient, e-governance enhancement initiatives play a key role in tackling and reducing corruption at scale., which again translates to economic growth. An empirical study also found that a 1% rise in the e-government index results in a 0.2% GDP rise. Online services such as tax filing, business registration, and government procurement portals can streamline administrative processes and reduce bureaucratic red tapism and corruption. Reduction in corruption has proven to directly boost India’s economic growth by positively impacting the GDP (State Bank of India, 2021). India has continuously shown efforts in reducing its corruption level and has significantly progressed from 185th rank in 2014 to 86th rank in 2022 in the Bribery Risk Matrix. The comprehensive country risk score in this ranking tool, comparing scores for 194 jurisdictions, territories, and autonomous and semi-autonomous regions, is derived from a weighted combination of four distinct domains: Business-Government Interactions, Anti-Bribery Measures and Enforcement, Transparency in Government and Civil Service, and the Capability for Civil Society Oversight, including the media’s role. India has also moved from 94th rank in 2012 to 85th rank in 2022 in the Corruption Perception Index.
Such e-governance initiatives have resulted in substantial cost reductions and budget savings, ultimately fueling economic growth. These positive impacts are anticipated to expand further as India continues to enhance its overall e-governance programmes.
Challenges and Shortcomings
Despite the significant potential for economic growth facilitated by e-governance, certain challenges may hinder this growth. India is known for its aggressive positive push to digital transformation and e-governance in recent years. This has also been reflected in India’s financial spending on projects related to e-governance. India has had a budget allocation of around INR 290 billions on the ambitious Digital India Mission, the largest policy measure related to e-governance, since 2018. However, the same momentum has not been reflected in the overall state of e-government development. For instance, the E-Government Development Index (EGDI) published annually by The United Nations Department of Economic and Social Affairs (UN DESA) shows that India has moved from 96th rank in 2018 to 105th rank in 2022. This index is the weighted average of normalised scores on the three most important dimensions of e-Government, namely, Online Service Index (OSI), Telecommunication Infrastructure Index (TII) and Human Capital Index (HCI). Now, while India has shown progress in the TII and HCI, its performance in the OSI has regressed in the past 4 years. The e-governance performance is hindered by several parameters; digital divides are a major component of the same. Digital gender divide is one such gap that India faces and the Internet Adoption in India ICUBE 2020 report in June 2021 stated that out of the 622 million Active Internet Users (AIU) in India, 58% of all AIU were male and the remaining 42% were female signifying a statistically significant digital gender divide. India is set to spend INR 1.13 trillion in the next 3-5 years on its Digital India Initiative (Ghosh, 2014), suggesting widened attention on its e-governance policies. To unlock the full economic potential of e-governance, India must direct its efforts towards reducing these existing gaps.
In conclusion, the potential for e-governance to fuel India’s economic growth is both substantial and promising. E-governance has shown remarkable progress in enhancing the efficiency, transparency, and accessibility of government services and processes. It has evolved from the mere computerization of government departments to a citizen-centric and service-oriented approach, exemplified by initiatives like the National e-Governance Plan (NeGP) and the widespread implementation of Common Service Centres (CSCs) at various levels. Furthermore, e-governance initiatives, such as the Government e-Marketplace (GeM), have significantly contributed to cost savings, efficiency, and ease of doing business.
Despite these achievements, India faces specific challenges that need to be addressed for the full realisation of e-governance potential. The stagnation in India’s E-Government Development Index (EGDI) ranking, primarily attributed to regressing performance in the Online Service Index (OSI), highlights the need for continuous improvement in the quality of online services. Moreover, digital divides, including the digital gender divide, pose significant barriers to equal participation in the digital transformation. These issues underscore the necessity for targeted efforts in bridging these gaps.
To unlock the complete economic potential of e-governance, India must focus on improving its online service delivery, addressing digital divides, and ensuring inclusive participation. Investing in online service infrastructure, promoting digital literacy, and implementing gender-inclusive policies are essential steps to propel the nation’s e-governance initiatives to new heights. By doing so, India can harness the full transformative power of e-governance, stimulate economic growth, and ensure a more equitable and prosperous future for its citizens.