A tale of two countries - India Vs. Estonia

Giant Bharat - roaring economy rather than emerging economy Vs. the small Estonia

Readers might be thinking why out of nowhere we have come up and started discussing about a small country known as Estonia. This country is also know as the Baltic tiger.  Here we want the citizens of Bharat to learn a lesson or two from the tiger itself.

But before this critical analysis we would like to thank you for your support .

Me: Mentor, why have you woken me up in the middle of the night to discuss about Estonia?

Superman : You fool!  Learn from the past; those who don't know history should not condemn it.

Me: My mistake, Mr. Superman Sir.  I will come up with the analysis on Estonia.

Superman : Good luck old man!

  

Estonia is a country situated in the Baltic region of northern Europe with its capital city Tallinn. Estonia is governed by the democratic parliamentary republic form of government.  The official name of Estonia is Republic of Estonia. It is divided into 15 different areas with Tallinn as its capital.

Estonia is one of the least populous country in European zone. It is part of Schengen area. Its currency is Euro.  Post soviet disintegration, country has resurrected like phoenix. They have the economy of $23.11 billion and per capita income is also high at $ 17,561 (against $1,570 of India)

The country is enjoying a rank of 33 on HDI (human development index).  It is having quite low level of govt debt, which the country is using as a leverage for the development. They are enjoying the recognition of United Nations as well as world community for their remarkable growth.

It was really difficult for Estonia to maintain alliances post disintegration.  They had a mammoth task of development of the country.

Our Ethmotican analysis

The main reason for the growth of Estonia is that they heavily invested in the areas of information and technology and education in the mid 1990s. They started the programme Tiigrihüpe  (Estonian for Tiger Leap) for introduction of internet in schools and other educational institutions. This led to the access of internet to common people. Now government relies on this infrastructure for e-governance.

The advancement in the sector led to the development in the form of paperless banking and hassle-free loan sanctions.  As for submitting any document to the government departments, citizens have the required IT infrastructure and the same is done online (thus saving huge amount on paper costs and not to mention, the environmental advantages).  The development does not come cheap.  During 2007, Estonia was facing the issue of cyber terrorism but country fought against it bravely.  As per the statistics nearly 90% of the banking transactions in Estonia are wired as is the submission of the documents to the concerned ministries. Citizens submit their documents at the central database which will be accessed by the different government departments. This also helps the government in maintaining the central repository for the whole country. This is required for the implementation of the government-backed schemes at the grass root level.  Unlike in India, where a citizen has to taken multiple IDs like voting card, PAN card, passport, PRAN (pension regulatory account number) and the next-gen Aadhar card.

This is evident from the fact that the country of this stature is able to achieve wonders with implementation of  IT in every sector.

The issue of black money and excess money in the economy can be handled by the central bank with mere strokes of keyboards.

The development at the e-governance led to the inclusion of Estonia as the developed economy.  Estonia gained the passage of European Union easily.

Ethmotican analysis of growth

Hassle-free transactions 

Less redtapism among government departments

Data for analysis of implementation of government-backed scheme

Central bank is able to fight the menace of black money because of large number of wired transactions

More transparency for better governance.

The hassle-free credit sanctions lead to the growth of all the sectors

Indian context

India is a large country.  We don't have the level of the IT infrastructure that is being enjoyed by Estonia. but we are still the IT gaint of the world (or as we make the world believe!). We still have nearly 30-35 cities which are fully equipped with the required infrastructure. We will take an example of Delhi. If the Government of Delhi insists on e-submission of all kinds of documents, be it Aadhar card or a pass of DTC, then people will have to follow.

We will call these areas as "marked areas."  They should be out of control of the states even though the revenue generated will go to the state corpus but e-governance implementation will be under the control of the Centre.

Every citizen of the area will be digitized.  Even a penny earned by him/her should be under the governments radar.

How to implement?

Start with digitization of citizens, use existing infrastructure of Aadhar, NPR (National Population Register), and election commission.

Start non e-transaction taxes . If a customer deals with more than the stipulated number of transactions directly through the banking system then put a flat banking transaction tax on the amount.  This will encourage people to start using existing internet banking infrastructure.

For companies, make it mandatory as a part of ISO certification.

For individuals make it mandatory for issuance of passport.

The government departments will also be under this ambit as these departments have been enjoying full access to the banking system.  These departments have been issuing the account payee cheques to various citizens every now and then.  Why don't they use the internet banking facility and this will also solve the issue of the agency clearing and a hell lot of time and expensive stationery. Income-tax, commercial tax, and sales tax departments can be kept out of the ambit since they DO have to deal with the banking system on a day-to-day basis but local hospitals, courts, revenue office, etc. should be mandatorily made to use the IT banking systems.

We have to geographically demarcate the areas before implementation of this functionality.

Takeaway benefits of this implementation:

Population

The migration from villages to the metro cities will be checked. For migration to the major cities a person should be digitized and his/her ID is to be transferred to the metro city. He has to use this ID to book tickets of bus or railways and the ID will be transferred only if the person is having required skill and he/she is having an offer letter from a company.  This will be more like a work permit.

Rationale:

The existing infrastructure of the cities are not sufficient for the number of citizens staying in the cities. This will help the local government to plan accordingly and the migration will be checked.  This will also help in generation of skilled workforce who wants to work in these cities.  Moreover, the citizen will not be a burden on the government as he/she will be earning his/her own bread.  If large number of people migrate from one area then it will put pressure on the local government to start facilities and infrastructure at the place which will act as a stimulus for the growth.

Economy

The creation of different business centres boost different sectors. As the red-tapism will be less, the state governments will compete with each other for growth of various sectors. This will lead to creation of large number of jobs.

Rationale

As the pressure at the state will be intense because of migration, states will have to come up with various offers for industry majors to open the industry in their state. Since credit facilities will be easily available, this will increase the confidence of business community. This will also lead to overall development of the state and Bhartiya economy.

Revenue

As every citizen is digitized, a penny earned by him/her will be under the radar.  All the transactions will be online which will eradicate the menace of black money from the system.

Rationale & benefits

Curbing of black money, higher number of jobs, higher purchasing power and large number of business centres. This will increase the revenue for the government.

We at ETHMOS believe that implementation will be difficult but it is not impossible.

When going gets tough, the tough gets going.

Happy ETHMOS