MAKE IN INDIA

Construction: 100 Smart Cities, 11 Industrial Corridors Building a sustainable future

The Construction industry in India consists of the Real estate as well as the Urban development segment. The Real estate segment covers residential, office, retail, hotels and leisure parks, among others. While Urban development segment broadly consists of sub-segments such as Water supply, Sanitation, Urban transport, Schools, and Healthcare. FDI in the construction development sector (townships, housing, built up infrastructure and construction development projects) and construction (infrastructure) activities stood at $27.97 bn and $26.20 bn, respectively, between April 2000 and March 2022.

> Policy Support - In March 2021, the Parliament passed a bill to set up the National Bank for Financing Infrastructure and Development (NaBFID) to fund infrastructure projects in India.

> In FY21, infrastructure activities accounted for 13% share of the total FDI inflows of US$ 81.72 billion.

> Cement production (weight: 5.37 %) increased by 19.4% in June 2022 over June 2021. Its cumulative index increased by 17.1 % during April to June 2022-23 over the corresponding period of previous year.

DATA – Oil to India’s Growth Engine

By Shreyansh Kalhans, Invest India

Data is the crude petroleum with huge monetary value but of insignificant utility in its raw form. But petroleum, when passed through a refinery, gives the gasoline which runs the world. Same way, data when analysed and refined into usable formats can do wonders. Companies like Google, Amazon etc. have made it large mainly by harnessing the potential of raw data and power of Analytics. Stepping up into cognitive analytics based on intelligent technologies like artificial intelligence, machine learning algorithms and deep learning models, the future of data analytics is already here. Talking numbers, the global data analytics market is expected to exhibit remarkable growth with a CAGR of 30.08 per cent to make it to $ 77.64 billion within 2023- according to a report by Market Research Future (MRFR).

India – a country with over a billion population – with almost 60 per cent of them being regular internet users – is producing some of the world’s largest datasets in various sectors. According to a joint report by MMA India and GroupM India, the number of Indian internet users will expand from the current 622 million to 900 million by 2025. Same report suggests that India is likely to have 500 million online shoppers by 2030 (from 210 million in 2021) – generating huge data on consumers behaviour. Almost 600 million active social media users generate massive engagement and behavioural data. We are getting records of nearabout 38 billion UPI transactions per year – again generating enormous data which can be processed to understand say spending patterns. Be it any field, India is generating gigantic levels of data but now our focus should turn to our data processing capacity. Failing to harvest this power source will be a big miss for everyone.

Data processing in India is one of the fastest growing segments and the sheer volume of data processing projects being outsourced to the country is astounding. India’s data analytics industry is projected to be valued at $ 118.7 billion by 2026 (IBEF). That still will not be the peak of what we can achieve. Here comes the opportunity for businesses to invest and bridge the gap. They will have to enable themselves to capitalize on data insights and analytics to make the best use of vast amount of data being generated. It will play a crucial role in turning of industry 4.0 generating employment for people and profits for businesses. Proper investments in scaling AI and machine learning systems will help in increasing data analytics capacity manifold. While working on increasing our technical capacity, we will also have to bring in programs for proper manpower upskilling with advanced technical skills. On the same note, proper awareness and transparency in data processing will be a must to keep data harnessing in ethical direction.

With great potential that data brings to the table, we should also be warned about consequences of it being misused. Data, if in wrong hands, can also be used to manipulate user behaviour, false advertising etc. At its worst, manipulated data can even lead to misleading public policies drafted by legislators based on recorded research and surveys. Government too, is currently working on improving the Data Protection Bill 2019. It is supposed to be a “comprehensive legal framework” to regulate the internet ecosystem, data processing systems, cybersecurity and harnessing non-personal data to unfold the hidden potential of huge data being generated. We will need to bring in vast awareness and education campaign to make users aware of their rights and duties in the online environment and enable them to control how much of the data generated by them is to be shared with various entities.

“Data is the oil of 21st century and Analytics is the combustion engine.” Both of them aligned will lead India’s growth engine to PM Modi’s vision of India@100.

Open Network for Digital Commerce: Reinventing India’s E-commerce Landscape

By Ishita Sirsikar and Srijata Deb, Strategic Investment Research Unit (SIRU)

The global economic landscape is changing, and digital commerce has the potential to give companies a level playing field. It may open up new commercial prospects for many stakeholders, particularly for small companies. The global expansion of digital commerce has been spurred by COVID-19. Digital commerce's percentage of total retail sales increased from 16 per cent in 2019 to 19 per cent in 2020, despite a fall in the mobility and travel services industry. This was due to an increase in business-toconsumer (B2C) sales, which was noticeable in online sales of food, household goods, and medical supplies. Additionally, COVID-19 led to a rise in business-tobusiness (B2B) digital trade.

The current market structure needs to be changed in order for the general expansion of the digital commerce sector to occur with widespread participation from customers and sellers. At this point, we simply cannot transform it into a store of value if we want to rethink the mechanism to bring the players together with a focus on trust. Though the idea of a "platform of platforms" may seem quite logical, it may not solve the storage, universality, or trust issues. A paradigm shift from an operator-driven, monolithic platform-centric approach to a facilitator-driven, interoperable, decentralised network is required to solve a challenge of this magnitude.

In this context, the Indian government initiative, Open Network For Digital Commerce (ONDC) is a project that nonprofit think tanks developed. By putting tens of millions of ‘kiranas’ on an equal footing with online behemoths like Amazon, Google, and India's Flipkart. The program effectively creates an open order book for purchase requests that any store on the network can respond to. The project aims at redoing the digital world and make it more equitable and open to every participant. The goal of ONDC is to provide a digital commerce foundation that includes inventory management, logistics, dispute resolution, and other features. A nationwide rollout is scheduled following a successful launch in five Indian cities: Delhi, Bengaluru, Bhopal, Shillong, and Coimbatore. It further positions open commerce at the forefront and wishes to deliver success stories showcasing non-zerosum outcomes for businesses and society.

Local businesses, often at odds with e-commerce behemoths over fees and commissions, have embraced this project with excitement. There are currently 200 sellers participating in the ONDC project, coming from a total of 15 cities. Interestingly, ONDC will keep referral commission caps at 3-5 per cent at a later time (for now, it's free), which represents a significant cost decrease compared to what companies currently spend to sell their products online. This is 7 to 10 times cheaper, in accordance with a Gofrugal estimate, than the typical online-selling commission rate of 23 per cent to 28 per cent on the cart value.

Over the next five years, ONDC wants to produce 3 billion monthly orders, 15 billion neighbourhood businesses online, 900 million digital shoppers, and a gross merchandise value (GMV) of $ 48 billion. By late August or early September 2022, ONDC is anticipated to be accessible in more than 100 Indian towns and cities.

Open networks like the internet are supported by open standards. A fundamental set of technological standards permits the linking of many kinds of systems. Effective open networks and standards encourage competitiveness and remove entry obstacles. A collection of open standards akin to India's Universal Payments Interface serve as the foundation of ONDC, which is fundamentally an open network. A platformcentric model, in which the buyer and seller must use the same platform or application to transact, is intended to be replaced by an open network that encourages cross-platform and cross-application interaction and commerce. All market participants can connect and share information using the open specifications and open network protocols provided by ONDC.

However, the rollout of the aforementioned will not come without challenges. ONDC's significant feature remains its ability to connect buyers and sellers on a single platform. Only major firms appear to be entering the seller app ecosystem, even though a few buyer applications are being registered on ONDC. Microsoft, Paytm, and PhonePe are the three buyer applications that have so far joined the network. There exists an emergent need to enlighten the small and medium sized local businesses and individual entrepreneurs of minor cities in the country regarding the project and urge them to subscribe to the same. There is also a lack of on-ground promotion that can ensure the onboarding of neighbourhood stores. Furthermore, companies need to build multilingual versions of these apps, given the vernacular diversity of the country.

Therefore, if implemented efficiently and with relevant safeguard mechanisms in place, ONDC might profoundly alter the rules of e-commerce, usher in a time of open competition marked by less sway from vertically integrated platforms. All the stakeholders would ultimately profit from accelerated e-commerce adoption and the expansion of the global economic pie, including consumers, retailers, and even massive platforms.

Source: Invest India, Government of India