An Infrastructure Road Map

The article was first published in the Business Standard on April 30, 2014 and in Organizing India Blogspot on May 1.

Comprehensive, Integrated Strategy & Execution

Let's hope a newly elected government has the coherence and leadership to begin to deal right away with the mess in infrastructure, learning from what has gone wrong before. There are problems galore with our infrastructure, but a couple of examples stand out for what to look out for and avoid in future initiatives. There's little doubt that we must improve our approach to projects and undertakings in terms of functionality and efficiency, and that digital infrastructure is a key requirement.

While this article is on prioritising digital infrastructure, let us not underestimate the problems of deficient infrastructure. For sustained high growth, equally critical needs relating to power and logistics, with its interdependent linkages between transportation - by road, rail, air and water, and the associated holding/staging areas of terminals, airports and ports - need to be addressed with organisation and capital for capacity and de-bottlenecking.

One example is the multiplicity of schemes to register individuals, including the Unique Identification (UID) orAadhaar scheme, the National Population Register (NPR), the multipurpose national identity card, the voter identification card, and so on1. Another example is the National Optical Fibre Network (NOFN) by Bharat Broadband Network Limited (BBNL). Accepting for the moment that these projects are well intentioned, there seem to be flaws right from the design stage, and on through execution. While the fallout from past errors has to be dealt with, it's most important to avoid these mistakes in fresh initiatives.

The UID and NPR projects apparently began without sufficient care in defining their purposes; they did not mesh seamlessly with each other and with other objectives and processes. This disjunction has carried through in implementing their design and execution2.

The NOFN aims to extend a countrywide network on the foundation of the existing fibre networks of state-owned entities Bharat Sanchar Nigam Limited (BSNL), RailTel and PowerGrid. This was to link over 245,000 village panchayats by the end of 2013, but is still undergoing limited trials. Given its magnitude, this requires vast capital investment that is unrelated to likely revenue generation in the short run. This critical infrastructure project is apparently behind time and over budget despite its reduced scope3. That said, such monumental undertakings and changes can't be expected to go like clockwork, and the considerable efforts being made should eventually contribute to positive outcomes. For instance, a Confederation of Indian Industry report prepared with the help of KPMG in 2013 outlines possible business models and ecosystems in four areas, namely, education, health care, banking and agriculture4. It's just that a thorough, comprehensive approach from the outset would be most beneficial.

In hindsight, what's lacking in both instances is proper organisation and co-ordination, the discipline of sound project management; and this is a missing piece in most areas of deficiency in governance, including infrastructure development. While a great deal of opprobrium is directed at corruption, there's little focus on these disciplines related to competent design, execution and delivery. Both depend on digital infrastructure. This is where real efforts must be focused to fix things, quite apart from dealing with corruption.

The "plumbing" of hardware, software, communications lines, and systems that enables effective use of information and communications technology is a critical necessity for our economic growth and well-being. While a balanced availability of energy, transportation and water supply/sewerage is required, in the short run, it is ICT that is likely to yield the broadest overall benefits and economic returns through multiplier effects, provided the others come up to minimum requirements. According to the World Economic Forum's (WEF's) Global Information Technology Report 2014 issued last week, the top 10 countries embracing information technology are Finland, Singapore, Sweden, the Netherlands, Norway, Switzerland, the United States, Hong Kong, the United Kingdom, and South Korea, in that order. The report includes a "networked readiness index" that ranks countries based on an assessment of their digital infrastructure and ability to use information and communications technologies to grow, foster innovation, and improve the well-being of their citizens.

Between 2012 and 2014, India dropped in networked readiness from 69th to 83rd out of 144 countries. By comparison, China dropped from 51st to 62nd, and Brazil from 65th to 69th. The WEF report says that India continues on its declining trajectory - and, among other things, that despite competitive markets (24th) and the availability of the latest technologies (58th), its difficult business environment and lack of digital infrastructure (119th) reflect in deprivation in education, resulting in limiting the creation of a wide skill base (101st). Our information technology and business process management (IT-BPM) sector is still largely oriented to external markets. For the financial year 2014, export revenues are expected to have grown 13 per cent to $86 billion. This is almost five times domestic revenues, estimated to have grown at 10 per cent to Rs 1.15 lakh crore (just over $19 billion).

Clear, convergent objectives and task-oriented processes and systems are not really part of our culture or vocabulary, barring sectors oriented to external markets like IT-BPM, and some corporations and professionals. There are, of course, rare individuals who excel, such as the former head of Delhi Metro, E Sreedharan, who maintained his reputation from the Konkan Railway and before that, Indian Railways. But it's not as if getting it right is a foregone conclusion for countries with a far better record of good systems and high-quality delivery - as evidenced, for instance, by Germany's increasing problems after turning away from nuclear energy. So, the incoming government needs to focus on starting to do things right, and that is the best way to create opportunities that can make the most of our demographics, and the potential of our large and increasing markets. It must view any scheme as part of an integrated, overarching system, and apply itself from the very beginning with care and understanding to defining the aims, objectives, and detailed processes so that they mesh and converge with what else is there.

1. An explanation of Aadhaar and NPR: http://egov.eletsonline.com/2012/04/there-is-actually-no-conflict-between-uid-and-npr/
2. A discussion on systems aspects such as authentication and data security: "Do we need the Aadhaar scheme?", February 1, 2012, Business Standard (http://goo.gl/j3P5vf)
3. "Reality check on the broadband dream", April 27, 2014, Business Standard (http://goo.gl/C9h4im)
4. "Creating viable business models for inclusive growth through the National Optical Fibre Network": http://www.kpmg.com/IN/en/IssuesAndInsights/ArticlesPublications/Documents/KPMG_CII_Broadband_Report_Final.pdf