Transforming India into a knowledge-based economy

Knowledge-based economies use ICT, innovation and research, higher education and specialized skills to create, disseminate and apply knowledge for growth. Transformational idea emanates from knowledge institutions. This can then be put to practical use by a for-profit company.

Advanced Asian economies such as Japan, Korea, Singapore, Taipei and China have successfully shifted from agriculture to manufacturing to knowledge-based industries. China and India, have built pockets of knowledge-based growth, but have not yet translated this into a broader economic model. Countries such as Bangladesh, Myanmar, and Lao have yet to really embark upon knowledge-based growth.

Importance of creating a knowledge-based economy

•  A shift to innovation-based growth would help countries avoid the middle-income trap and also address rising income inequalities.

•  The advantage of availability of cheap labour from which countries like India and China and others in the region derive the strength that adds so much value to their economies is likely to disappear in the near future.

•  Some examples from across the world shows how knowledge based economies are already transforming economies and can have an effect on job creation and affect industries in India.


•  Nike has been experimenting with the use of 3D printers to manufacture shoes. These areas of high-end technology have a rapid rate of convergence. It is well nigh possible that our shoe manufacturing industry could be hard-hit in no time.

•  Google is still very much smaller than the Indian IT company in terms of employees, but it earns much more in one quarter than what the Indian IT company earns in a whole year. This is simply because Google is based on a knowledge idea that has connections to Stanford. The Indian IT company, alas, is dependent on brawn as opposed to brains.

•  A former professor of robotics at the Georgia Institute of Technology has helped create a robotic tailor that can stitch a perfect circle. The only seemingly viable option for the garments industry in the Asian region is to seek to import such machines. There goes a part of our plan to keep unemployment figures down. This indicates troubling future of the garments industry.

Indian context

As per the Mimansa school of Indian philosophy, Knowledge without action is meaningless. India has accrued enormous for centuries based on our knowledge systems:

•  C.V. Raman was in the office of the accountant general while making his discovery. In ancient India, much before Christ and the Greeks, some outstanding mathematics was discovered and driven by societal needs.

•  Knowledge systems in India invented cataract surgery and plastic surgery much before Christ.

•  The invention and use of the rapalgai — a rope-based device also called kamal enabled our merchant ships to calculate positions at sea at a time when Europe was clueless.

Information Technology 

•  Digital India Programme has the vision to transform India into a digitally empowered society and knowledge economy.

 •  The programme has three vision areas namely, digital infrastructure as utility for every citizen, governance and services on demand and digital empowerment of citizens by bridging the digital divide in the country.

•  The Nine Pillars of growth viz., broadband highways, universal access to mobile connectivity, public internet access programme, e-governance-reforming government through technology, e-Kranti electronic delivery of services, information for all, electronics manufacturing, IT for jobs and early harvest programmes, are being promoted under Digital India Programme.

•  IT Act 2000 provides legal recognition to the transaction carried out by means of electronic data interchange and other means of electronic communication, commonly referred to as “electronic commerce” , to facilitate electronic filing of documents with the Government agencies. It directs the establishment of Cyber Appellate Tribunal.

•  In order that various benefits and subsidies reach the targeted beneficiaries, the Government has made all efforts to leverage the Aadhaar platform. A statutory backing will help to ensure that benefits of various subsidies and programmes go to the truly deserving.

•  Under Digital India, MeitY has taken initiatives such as eKranti, policy on adoption of open source software in e-governance systems, email policy, etc. Major schemes such as e-Districts, Common Service centres and State Wide Area Network are also there.

Other policies in action 

•  Policy on Adoption of Open Source Software; Policy on Collaborative Application Development by Opening the Source Code of Government Applications; Policy on use of IT Resources; e-mail policy; Policy on Open Application Programming Interfaces (APIs).

•  Another important initiative pertains to ‘Jeevan Praman’ is of providing an Aadhaar based Digital Life Certificate for pensioners. A ‘Digital Locker system’ has also been envisaged to serve as a platform to enable citizens to securely share their documents with service providers who can directly access them electronically.

‘eSign’ framework has been released, which would allow citizens to digitally sign a document online using Aadhaar authentication. National Scholarship Portal provides a centralized platform for application and disbursement of scholarship to students.

Initiatives are


•  To integrate the delivery of government services (across various Departments)


•  To provide information on health, education, agriculture, energy, social welfare and e-governance in more than 10 languages. 

•  To ensure citizens’ engagement in decision making by the government for the ultimate goal of “good governance” for building India.


•  Enabled Biometric Attendance System: In order to bring in efficiency in the Government, an Aadhaar enabled Biometric attendance system was implemented by MeitY.

e-Payment Framework 

•  All payments and receipts to be in electronic mode.

Common Services Centre  

•  Provides ICT enabled front-end service delivery outlets, across rural India covering six lakh villages. Jan Dhan Yojna and Digital Sakshartha Abhiyan (DISHA) are conducted through CSCs.

State Wide Area Network 

•  It has been identified as an element of the core infrastructure for supporting the e-governance initiatives.

GI Cloud  

•  In order to utilise and harness the benefits of Cloud Computing, Meity has embarked upon an initiative – “GI Cloud” which has been coined as “MeghRaj”.

Information Technology Investment Region (ITIR)

•  Meant to attract major investment by providing transparent and an investment friendly policy; help in exports and employment.

National Policy on Universal Electronic Accessibility

•  It recognizes the need to eliminate discrimination on the basis of disabilities and to facilitate equal access to Electronics & ICT.

Promotion of Manufacturing of Electronics and IT-ITES  

•  It is estimated that demand for electronics products and systems in India would grow to about US$ 400 billion by 2020.

Other minor initiatives 

•  Promotion of R&D and Innovation Technological Incubation and Development of Entrepreneurs (TIDE) ; Multiplier Grant Scheme (MSG); National Supercomputing Mission (NSM). National Digital Literacy Mission was approved in March, 2014. The Scheme aims to train 10 lakh persons. Digital Empowerment of citizens by providing Universal Digital Literacy is a part of ‘Digital India’ initiative.

Cyber Security

•  National Cyber Security Policy (2013) is aimed at building a secure and resilient cyberspace for citizens, businesses and Government, by way of actions to protect information and information infrastructure in cyberspace, build capabilities to prevent and respond to cyber threats, reduce vulnerabilities and minimize damage from cyber incidents.

•  National Cyber Co-ordination Centre is being set-up with an aim to generate cyber security situational awareness to anticipate and prepare for cyber attacks.

Organizations related to it

 Botnet Cleaning and Malware Analysis Centre

• CERT-In is implementing this for detection of compromised systems in India and to notify,enable cleaning and securing systems of end users to prevent further malware infections.

National Informatics Centre (NIC) 

•  National Informatics Centre (NIC) is a premier IT organization of the country under the Department of Electronics and Information Technology.

•  It was established in 1976,

•  NIC, through its ICT Network, ‘NICNET’, has institutional linkages with all the governments and governments departments at all levels.

•   NIC services include Certifying Authority, Video-Conferencing, NIC e-MAIL (NICeMail) and SMS services across the country.

National Knowledge Network (NKN) has been set up to connect institutions/ organizations carrying out research.

Open Technology Centre (OTC) has been set up as a nodal agency for Open Technology related activities in e-Governance applications managed by NIC/NeGP and promotes the use and adoption of Open Source tools/software.

•  It has established and maintains state data centersand other infrastructure related to NeGP.

Controller of Certifying Authorities (CCA)

•  The IT Act promotes the use of Digital Signatures for e-Governance and e-Commerce through legal recognition to electronic records and treats digital signatures at par with hand written signatures.

•  The CCA licenses Certifying Authorities (CA) to issue Digital Signature Certificates under the IT Act and also exercises supervision over the activities of these Certifying Authorities.

•  The CCA certifies Public Keys of the CAs, lays down standards to be maintained by the CAs and performs other functions.

•  These are being used in applications such as Real Time Cross settlement System & EFT of the RBI, e-mail, electronic funds transfer, e-Procurement, share trading; issue of import/export licenses by DGFT and filing of company returns with the Ministry of Company Affairs.

Cyber Appellate Tribunal

•  The first and the only Cyber Court in the country has been established by the Central Government in accordance with the provisions contained under section 48(1) of the Information Technology Act, 2000. Provision has been made in the amended IT Act, 2009 for the Tribunal to comprise a Chairperson and many other members, as the Central Government may notify/appoint.


• Centre for Development of Advanced Computing (C-DAC) is the premier R&D organization of the Department of Electronics and Information Technology (DeitY for carrying out R&D in IT, Electronics and associated areas.

•  C-DAC is pursuing activities in the following thematic areas:

•   High Performance Computing (HPC), Grid Computing and Cloud computing

•   Computing Multilingual Computing (HPC), Grid Computing Professional Electronics including VLSI and Embedded Systems

•   Software Technologies including FOSS

•   Cyber Security and Cyber Forensics

•   Health Informatics

•   Education and Training

Some applications developed by C-DAC are

•  One of the significant achievements of the past year was upgradation of the compute power of PARAM Yuva system from 54 TF/s to 529 TF/s.

•  In the area of Cloud Computing, C-DAC launched its cloud platform, Meghdoot 1.0 during the Technology Conclave at Hyderabad in October, 2012.

•  In the area of Professional Electronics, C-DAC completed the development of WiTrac (Wireless Traffic Controller) and made its first deployment this year.

•  Several electronic devices and associated solutions were also built for smart buildings. These include LED Luminaire, Human Occupancy Prediction System and Indoor Air Quality Monitoring System.

•  In the area of Software Technology, release of a new version of BOSS Linux operating system and its wider deployment were carried out during the year.

•  Several e-Governance applications and frameworks including e-Praman with Andhaar,

•  In Health Informatics area, C-DAC carried out larger deployment of C-DAC tele medicine solutions. C-DAC also initiated the development of health care services on mobile devices, m-Health and m-Swasthya are two such solutions. Wider deployment of e-Vision and e-Nose systems was carried out during the year.

•  C-DAC is also involved in carrying out various activities in the northeast region through various Government supported initiatives.

National e-Governance Division 

•  It was established as amalgamation of experts from the private sector and the Government for discharging the key tasks including programme management and technical support of various components of the Digital India Programme.
National Internet Exchange of India

•  NIXI is a not for profit organization set up under Companies Act, 1956 for peering of ISPs among themselves and routing the domestic traffic.

Unique Identification Authority of India(2009)

•  “To empower residents of India with a unique identity and a digital platform to authenticate anytime, anywhere”.

National Institute of Electronics and Information Technology

• Scientific Society of the MeitY, which is actively engaged in capacity building and skill development in the areas of Information Technology (IT).

Software Technology Parks of India

•  Autonomous society under MeitY, meant for promotion of software exports by acting as ‘single-window’ in providing services to the software exporters. Media Lab Asia. To bring the benefits of ICT to the common man, such as ICT for healthcare, education, livelihood and empowerment of disabled.

Department of Telecommunication

•  Indian Telecom Sector has grown exponentially and become 2nd largest network in the world, next to China. Number of telephones increased from 99.61 Cr to 103.6 Cr at the Dec,2015.

•  Department is committed to provide secure, reliable, affordable and high quality converged telecommunication services anytime, anywhere; with special focus on underserved areas in North-Eastern Region and backward areas, especially the Left Wing Extremism areas.

•  While wireless voice and data services continued to grow, the landline provided remarkable support to high speed data services. Share of wireless telephones increased to 97.54% of total.

Public vs. Private  

•  Share of private sector in the total number of connections increased to 89.88 % at the end of Dec, 2015, over public sector share of 10.12% during the same period.

•  Tele-density, which denotes the number of telephones per 100 population, which was 79.36 % in April 2015, increased to 81.85% at end of Dec, 2015. Himachal Pradesh (124.54 %) had the highest tele-density followed by Tamil Nadu (117.27 %). Bihar (52.55%) is lowest.

Unified Licence

 • In pursuance of NTP-2012 to create one nation-one license, Department of Telecommunication has issued guidelines on Unified Licence under which, the allocation of spectrum is delinked from licence and has to be obtained separately as per bidding process.

Foreign Direct Investment (FDI) Policy 

•  Government raised FDI limit for the telecom services from 74 %to 100 %. RBI has expanded the existing definition for infrastructure sector for the purpose of availing External Commercial Borrowing (ECB).

Universal Service Obligation Fund 

•  To give impetus to the rural telephony, the Government in June, 2002, established Universal Service Obligation Fund (USOF).


 •  To connect all 2.5 lakh gram panchayats in country, the Government approved a project called ‘National Optical Fiber Network, now known as BharatNet.

Rural Wire-Line Broadband Scheme  

•  USOF signed an agreement with BSNL for providing wire-line broadband connectivity up-to village level in rural and remote areas.

Regulatory Framework 

•  Telecom Regulatory Authority of India has always endeavoured to encourage greater competition in the telecom sector together with better quality and affordable prices in order to meet the objectives of National Telecom Policy (NTP)-2012.

Research and Development

•  C-DOT is committed to providing a wide range of cost-effective, indigenously developed and state-of-the-art total telecom solutions.

•    DoT has the following PSUs
c) ITI Limited;
d) Telecommunications Consultants India Limited (TCIL);
e) Bharat Broadband Network Limited (BBNL);
f)Hemisphere Properties India Limited (HPIL).

Vision of Digital India

•  It aims to transform the country into a digitally empowered society and knowledge economy, implemented in phases till 2018, by DeitY. It would also bring in public accountability through mandated delivery of Government’s services electronically; a Unique ID and e-Pramaan . The source of funding is through budgetary Provisions.

Scope of Digital India

    a) To prepare India for a knowledge future;

    b) On being transformative that is to realize IT

                (Indian Talent)+ IT (Information Technology) =IT (India Tomorrow);

    c) Making technology central to enabling change;

    d) On being an Umbrella Programme covering many departments.

Initiatives under the Digital India Programme

(i)  Legal Information and Management Based System is an easy to access, web-based tool for comprehensive, regulatory and proactive monitoring of court cases.

(ii)  NDSAP (National Data Sharing and Accessibility Programme) is to facilitate the access to Government of India owned shareable data and information.

(iii)  e-Office: The main objective of e-office is to improve efficiency, consistency and effectiveness of government responses;
Way ahead

•  India has the potential to become a leading knowledge-based economy with its youth population and growing information technology.

•  Policy — if at all — must simply be more in the realm of enlightened inducement that encourages and engenders good practices. It must nurture and encourage initiative and out-of-the-box thinking and should be, to an extent, ready to accommodate risk taking and have room for failure.

•  Institutions have to move out of traditional modes of thinking and must recognize that knowledge can exist in all realms, not just in formal systems around academia.

•  The need to develop and nurture educational institutions in a manner that ensures their linkages to the needs and challenges of the nation — including its economic needs. This requires inducing young minds to grapple with the challenges of the nation and society.

•  Steps such as supportive laws, improved infrastructure, removal of barriers to trade and investment, up-skilling of labour force, higher spending in R&D and innovative financing for small businesses must be taken urgently.

•  Regulatory, education, and infrastructure barriers must be overcome.

•  What is required is a strong, coordinated government policies coupled with investment in ICT including universal, affordable and high-speed broadband connectivity, better education notably tertiary and skills-focused training, and a culture of research and innovation with strong intellectual property rights. Flexible capital and labor markets are also crucial.


The shift to knowledge-based growth is critical since India’s comparative advantages in labor and capital-intensive manufacturing are fading. New technologies like robotics, and increasing stress on resources like energy and water, are emerging as threats to Asia’s competitive edge. A shift to innovation-based growth would help India avoid the middle-income trap and also address rising income inequalities.

Expected Questions

•  India needs to transform itself into a knowledge-based economy. Discuss the agency, India’s potential as well as the challenges in bringing such a transformation.


General Studies 2

•  Government policies and interventions for development in various sectors and issues arising out of their design and implementation.

•  Issues relating to development and management of Social Sector/Services relating to Health, Education, Human Resources.

•  Important aspects of governance, transparency and accountability.