Why India needs a broadband stimulus

Does India [ Images ] need a broadband stimulus plan? Yes, because as in other countries, it can be a force-multiplier throughout.

Take education: broadband can make centrally deployed content and teaching skills accessible at all levels - schools, undergraduate and postgraduate education, vocational studies, and Continuing Education/adult education.

It can help bring about the inclusive growth the government talks of. It facilitates information use by making aggregation, coordination, access/dissemination and management of delivery more effective and efficient.

The potential public benefits extend to healthcare and governance, starting from law-and-order and security, extending to energy management, water and sanitation, tax collection and subsidies, commerce, industry and services, including information, entertainment, logistics, etc.

Extensive benefits can be obtained from limited investments. However, policies and regulations can make or break the industry, or even the political economy, because it can take 10 to 20 years to get returns from investing in fibre and wireless network systems.

All those enamoured with lower tariffs should apply their minds to (a) what we need, (b) for what purposes, eg, the gamut of education, healthcare, other public services… (c) with the binding constraint of sustainable returns.

A low-cost stimulus!

But here is the amazing thing: if appropriate policies and incentives are devised, as we have seen with India's telecommunications since the New Telecom Policy, 1999 (NTP '99), private and state-owned enterprises can build the networks and provide services.

The government need not invest directly. Instead, it must provide clarity of objectives, enabling policies and procedures, and institutional support (kept fair and incorruptible), as well as foregone up-front revenues because of tax breaks and other incentives. As with telecom, this can result in explosive growth and increased government revenues.