Date: Tue, 23 Jan 2001 20:04:30 +0530

New Delhi, Jan 23 - As the rest of the world talks of a slowdown in the U.S.

economy, e-commerce, portals and cyber money, India worries that the rapid

strides being made in information technology (IT) will widen the gap between

the country's privileged urban population and its forgotten rural populace.

Even its heyday fortunes, about a year ago when venture capital flowed like

manna in the desert, were only for a chosen few. And though the number of

Internet users continues to rise steadily, the trickle down effect,

notwithstanding a few villages that now do their accounts on computers, has

been nonexistent.

On the one hand, professionals in the information technology (IT) sector

continue as the apples of the eye for most developed and computerized

economies, including the United States, Germany and Japan. On the other,

Internet blue chips, online shopping and nanosecond e-mail have failed to

cure century-old malaises like illiteracy, poverty and unemployment in

India.

What's more, the digital divide is not restricted to less developed states

like Bihar, Uttar Pradesh, Rajasthan and Orissa with traditionally weak

infrastructure but also the new "IT states" like Karnataka, Tamil Nadu and

Andhra Pradesh.

"For any revolution to take place, there are certain prerequisites. The

digital revolution too requires an enabling environment, which India has not

put in place as yet," said Amul Gogna, executive director of the Investment

Information and Credit Rating Agency (ICRA), an independent credit rating

firm.

And the main woe is infrastructure. Access to technology is constrained by

infrastructure parameters like electricity, the number of personal computers

(PCs) and telephone lines. Per capita electricity consumption in India

remains around 363 kw, far below the 4,959 kw in Hong Kong, one of the

region's technology powerhouses, the 5,421 kw in Britain and the 11,822 kw

in the U.S.

India has 22 telephone lines per 1,000 people compared with 70 in

neighboring China and three PCs per 1,000 compared with nine in China. The

installed base of PCs in the country is five million, which means only five

out of every 1,000 people have a PC.

The software industry is undoubtedly the bright star of the Indian economy

that is growing by around six percent a year and faster than the three to

four percent growth rate in earlier decades. The expected $6 billion of

software sold abroad in the current financial year - equivalent to 13

percent of India's exports - will help the country to ride out high global

oil prices, partly offsetting its estimated $20 billion oil import bill.

But the new economy industry has directly benefited only a small proportion

of the population. Software companies employ just 340,000 out of India's one

billion-strong population. "IT has as yet failed to touch the lives of the

average citizen in the rural areas," Gogna told IANS.

But in several parts of the country, farmers are beginning to realize how

real-time information, made available either through state-sponsored or

private initiatives, can help them earn better prices for their crops.

In Madhya Pradesh's Dhar district, for example, villagers get the latest

quotations for their potato crop from the state's wholesale markets for as

little as Rs.5. In the process, they have found that their average

realization has gone up by as much as 33 percent as middlemen have been done

away with.

A study by the National Association of Software and Service Companies

(Nasscom) forecasts that the number of Internet subscribers will gallop to

3.5 million from the current 950,000 by the end of 2002.

But experts feel the lack of access to communications and IT tools --

coupled with the high percentage of illiteracy in the rural areas -- act as

major roadblocks in the nation's fight against socio-economic problems and

its leapfrog to a knowledge-based society.

Some like Nasscom chief Dewang Mehta no doubt feel the same tools that

critics say are widening the gap between the "haves and the have-nots" could

be successfully deployed for a "digital unite."

"The division between the rural and urban areas was there in India for the

last so many years. So there is no question of digital technology creating a

divide between rural and urban areas. In fact, it is being effectively used

to bridge the gap in several states," says Mehta.

But the political leadership in some states is unconvinced. In Bihar, for

instance, the political leadership does not consider IT a useful tool but an

elitist phenomenon with little relevance to India.

Experts, therefore, argue that if the political leadership in states like

Bihar has such convictions, the people there will lag behind their

counterparts in other states in today's knowledge-based age.

In such a scenario, they feel, IT cannot be termed as the cause for the

divide. Mehta says, "Issues like taking the IT revolution to rural India

cannot be left to the government alone to solve and private sector

participation is needed to bridge the gap." At the current rate, that will

take a long time.