Transcript Seminar on 11th Five Year Plan of Karnataka: Perspectives Role of

Seminar on
11th Five Year Plan of Karnataka: Perspectives
State Planning Board, Government of Karnataka
Role of information and communication
technology in Karnataka’s economic
development
M.R. Narayana
Centre for Economic Studies & Policy
Institute for Social and Economic Change
Bangalore
4 May 2007
ICT sector in Karnataka
Composition of ICT sector
Manufacturing and service activities
Public and private sectors
Information technology (IT)
Manufacturing sector: Production of hardware and electronic components
Service sector – Development of computer software – Training in use of
computers in all sectors - ITES: BPOs & Call Centres
Communication technology
Focus on telecommunication, based on telephone network – excludes
communication based on posts and telegraphs
Manufacturing sector: Production of materials (including electronic
components) for construction of (a) telephone network, (b) Internet, and
(c) consumer premise equipments
Service sector: Basic, value added and Internet services through fixed and
mobile telephones on narrow and broadband
Institutional background for Telecom
manufacturing, provisioning, and pricing in
Karnataka
Manufacturing belongs to the Concurrent List, and services belong
to Central List, in the Indian Constitution
Number and licensing of private providers, nature and extent of
foreign investment, and pricing of services (subject to approval by
TRAI, however) are nation-wide policies
Thus, at the State level, provision for infrastructure for planning
and establishment of adequate telecom infrastructure, and
competitive delivery of quality telecom services, to meet with
access and utilisation demands of subscribers are important
Karnataka is a telecom circle with 19 telecom district – does not
coincide with revenue districts – data problems
Recent growth of telecom in Karnataka
Growth indicators
2002-03
2003-04
1. Total fixed lines
2813475
2948526
2766262
2. Total mobile subscribers
821000
1761000
2821000
3. Share of mobile
subscriber in fixed lines (%)
29.18
59.72
101.98
8.77
4.8
-6.63
4. Annual growth of mobile
subscribers (%)
105.25
114.49
60.19
5. Tele-density with (or
without) mobile phones:
Telephones per 100
persons
6.68
(5.17)
8.49
(5.32)
9.91
(4.91)
3. Annual growth of fixed
lines (%)
2004-05
Available approaches to 11th Five Year Plan:
ICT Sector: National level
An Approach to the 11th Five Year Plan , (14 June 2006), Planning
Commission
Towards faster and more inclusive growth
Section 3.5 (j) on Infrastructure development emphasises on:
(a) Increase in teledensity of India in comparison with other countries;
and increase in rural teledensity in comparison with urban teledensity
(b) Importance of private sector and mobile telephone in expansions of
rural telephony, especially to reduce digital divides and disparities
between urban and rural areas
(c) Internet connectivity for text, data and image communications.
(d) For larger and speedy communications to rural areas, connectivity
through wireless technology and on fibre optic cables are emphasised
Available approaches to 11th Five Year Plan:
ICT Sector: State level
Draft Eleventh Five Year Plan 2007-12 and Annual Plan: Vol.I (Sectoral Programmes) –
February 2007: IT Sector
Encourage and sustain past growth of location and production by providing with
infrastructure (e.g. Hardware Technology Parks) and facilitation for IT sector (e.g.
create IT facilities at district level in association with local engineering colleges); Create
awareness on the use and applications of IT; promote computer literacy and IT skills
(e.g. Yuva.com programme); and Mukyavahini – aims at building up local (e.g. village
level) socio-economic data bases for scientific decision-making
Draft Eleventh Five Year Plan 2007-12 and Annual Plan: Vol.II (Sectoral Outlays) –
February 2007: IT & E-Governance
Proposed outlay (at current prices) increased from Rs.6082 lakh for Tenth Plan to
Rs.48602 lakh for Eleventh Plan (about 8 fold increase)
Remarks
All the above programmes are on-going; no new programmes proposed
IT related – no specific reference to telecommunications
Role of ICT sector in Karnataka’s economic
development
Karnataka’s new economy is creator of jobs, producer of goods and services, payers of
taxes, earner of foreign exchange through exports, attractor of foreign investment
and business into the State, and earner of quick and high returns to investment in
higher technical education. These aspects are reflected by contributions to:
•
overall State’s economic growth through supply side (or increases in State Income in
the secondary and tertiary sectors) and demand side (through utilisation of ICT
services)
• economic development through changes in distribution of income (functional and/or
personal)
• Economic globalisation through international trade and foreign investment
• global competitiveness of Karnataka through ICT related or incorporated indices of
global competitiveness
 Overall competitiveness: Global Competitiveness Index and World Competitiveness
Yearbook
 ICT specific competitiveness: Digital Access Index and Networked Readiness Index
Challenge: How to estimate the above effects of ICT sector for Karnataka?
Available estimates of communication sector’s
contribution to national and State’s growth
Indicators [at factor cost and constant (1993-93) Karnataka
prices]
All India
1. Percent of communication in GSDP/ GDP:
2003-04
5.81
4.29
2. Average growth (%) of communication sector
in GSDP/GDP: 1994-95 to 2003-04
23.09
20.70
3. Percent of communication sector in tertiary
GSDP/GDP: 2003-04
11.76
8.34
4. Percent of Karnataka’s communication sector
in GDP from communication sector: 2003-04
9.12
Not
applicable
Perspectives for the 11th Five Year Plan
1. Redefine ICT sector
Communication sector in India’s national and State income estimations
is classified under the tertiary/service sector
Excludes the contribution of manufacturing sector; Includes
telecommunication and posts and telegraph services; Does not explicitly
accounts for the contribution of information technology in
manufacturing and service sectors
In view of the above, there is a clear need for exclusion of postal
services and inclusion of information technology services to assess the
role of ICT services
Role of ICT sector must be comprehensive assessed by its contribution
to manufacturing and service sectors - this calls for redefining ICT
sector for estimation of national and State income
Narayana (2007) contains a model and preliminary results with national
and international comparisons
Perspectives for the 11th Five Year Plan
2. Construction of input-output table (IOT) for Karnataka
IOT is essential to determine the nature and extent of interdependence
between ICT producing and consuming sectors - useful to estimate
the forward and backward linkages by ICT manufacturing and services
At present, the national level IOT does not have an explicit sector for
ICT manufacturing or services
3. Sources of growth of ICT sector
Supply side: Provision for social and economic infrastructure;
promotion for private (domestic and foreign) investment; and human
resource development in technical education
Demand side: Promotion of access demand and usage demand by
domestic subscribers: residential, business, government and private
institutions; Public telephones in rural and urban areas; Promotion of
external/export demand
Perspectives for the 11th Five Year Plan
4. Role of SMEs
Different definitions of SMEs in ICT and non-ICT sectors
Promote SMEs for employment generation
Index of production for SMEs in ICT and non-ICT sectors
5. Improvement of database
Employment generation
Development of monitorable performance indicators
Construction of indices of ICT competitiveness –national and global
ICT indicators are contributory for global competitiveness
6. Implications for balanced regional development
Concentration of production, investment, and exports of IT sector in
Bangalore is well know all over the world – Development of Mysore,
Mangalore, and Hubli are most welcome – Emphasis should be given
more on access and usage of ICT services in backward areas