Don’t be afraid of crypto or digital currencies, let young Indians profit from the boom in online services – ThePrint
The post-Covid world is witnessing an explosion in the global digital services industry. This time it’s not just about software engineers.
A growing number of businesses, households and institutions across the world are now engaged in the digital gig economy in one form or another. From yoga classes to accounting, demand for services that can be met from anywhere in the world has skyrocketed after the pandemic.
How can policymakers ensure that India’s workforce and economy benefit from the growing global market for digitally connected services?
In this new world, India has huge potential advantages. It has the largest and youngest workforce in the world. Young people are particularly gifted at appropriating new technologies and working methods. They are quickly entering the world of mobile apps and digital transactions and are nimble in learning new skills. English language is an added advantage. Compared to any other country, India has the most to offer at competitive rates.
The question is whether policymaking in India will provide an enabling environment for the country’s youth to take advantage of these opportunities.
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The advantage of India
China has profited from the surge of growth in global exports of large-scale manufactures while India has missed this bus. In terms of initial conditions, India now has a better capacity to capture the next wave of service growth.
This explosion of growth can have many components. From exports of traditional software services to new ones like legal, medical, accounting, educational and welfare services, the next engine of global growth is socially and culturally more suited to India.
With its young demographics and labor force, India has quickly been able to integrate into the growing digital services industry. From BPO and software coding to teaching yoga, languages, cooking, telemedicine, technology education, logistics management and more, young Indians are directly involved in these thriving services. expansion. These do not require significant capital investments. They can be carried out in telecommuting mode.
Living in India allows us to offer services at very competitive rates. In this way, it is similar to the software, BPO, KPO (Knowledge Process Outsourcing) boom that has occurred in organized and large-scale industries – but which has also relied on the low price of labor. labor and cost of living cheaper in India.
Tier 2 and 3 cities and work-from-home mode offer an even greater cost advantage than call centers in subways. The high unemployment rate among educated young women offers a large pool of potential workers.
In the context of the software boom of the 2000s, it has often been said that one of the factors responsible for the boom was the lack of government interference. On the one hand, the government reformed the telecommunications sector and authorized broadband. On the other hand, its policies have not interfered with the software services sector and have not held back growth.
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The reform agenda in India is usually not so much about what the government needs to do, but rather what restrictions it needs to remove.
So while international trade treaties may make it easier for Indian companies to export legal, medical, accounting, and software services, restrictions on cross-border digital payments prevent people from taking full advantage of available opportunities.
Making cross-border payments as easy as domestic digital payments can help small businesses, individuals and households participate in global trade.
Significant fiscal stimulus in the United States and Europe have increased household demand for manufactured goods. Politically, job protection has mainly focused on the manufacturing sector, which has moved to China.
Unions and voters demand the return of factories to the United States. Household demand for services has also increased and is expected to increase further. In the United States and Europe, companies have the option of hiring people directly while working from home.
Today, we can design a world where educated Indian women in Tier 2 and Tier 3 cities could work from home for US companies, for example analyzing medical device data.
The job of the Indian state would be first and foremost to provide a framework that does not prevent such growth in employment and income. The energy and enthusiasm of Indian youth and the competitive prices that country living offers will do the rest.
India’s experience with digital payments has been a great learning process. Businesses across the country are participate now in markets and the “formal” sector.
The possibility of participating in alternative payment systems should not be precluded. Fears of money laundering and terrorist financing concern all countries. Organizations like the Financial Action Task Force (FATF), the global watchdog for money laundering and terrorist financing, and laws like the Prevention of Money Laundering Act address these issues.
Many FATF member countries have regulated and authorized digital payments, including cryptocurrencies. Disclosure standards and KYC requirements are one of those frameworks, but not so onerous as to prevent people from participating.
In the future, as cryptocurrencies or other payment methods like Facebook currency or other digital payment systems will be used more and more in the United States, Europe, United Kingdom, Japan and other wealthy countries, it will be essential that Indians can accept these payments. in currencies if that’s what buyers want to use.
The job of decision-makers is to find a balance between fear and innovation. Banning cryptocurrencies, stablecoins and other digital payments will reduce the possibility of higher earnings for Indian households as rich countries experience growth.
Ila Patnaik is an economist and professor at the National Institute of Finance and Public Policy.
Opinions are personal.
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