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
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
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