In this State of the Economy podcast, BusinessLine’s Anjana PV speaks to Anirudh Tagat, study author at Monk Prayogshala School of Economics, about the impact of internet shutdowns on businesses. A recent report by the Keep It On coalition, a group of civil society organisations fighting against internet shutdowns, noted that there were 116 internet shutdowns in India last year. These shutdowns also impact businesses. The internet has become a vital tool for businesses across the world, and disruption of this access can have severe consequences. One such shutdown, an internet shutdown, can disrupt the functioning of businesses, especially start-ups and small and medium-sized enterprises (SMEs). These shutdowns prevent businesses from selling online, communicating with customers and managing other core operations.
The true cost of internet shutdowns to businesses is difficult to quantify, but researchers are developing methods to estimate economic losses. One challenge in measuring the impact is the lack of high-frequency data on businesses. Much of the data collected on businesses is collected annually, making it difficult to track the direct impact of shutdowns. Moreover, some negative effects are qualitative and difficult to quantify. For example, shutdowns can damage a business’s reputation or erode customer trust, but these effects are not easily reflected in financial reports. Businesses themselves may also be hesitant to discuss the impact of shutdowns because they fear repercussions or do not want to admit vulnerability.
While the impact is difficult to quantify, there is no doubt that internet shutdowns pose a significant threat to businesses. Lost revenue, operational interruptions, and potential damage to reputation can all have a devastating effect on a company’s bottom line. Additionally, frequent internet shutdowns in a country can have a negative impact on the business environment. Entrepreneurs who worry that frequent interruptions will make their business vulnerable may be hesitant to invest in online operations.
Internet shutdowns are a major obstacle for businesses, especially startups and SMEs. These disruptions can cause significant financial losses, operational challenges, and reputational damage. The full scope of the problem is difficult to understand due to a lack of readily available data and the difficulty in measuring qualitative impacts. However, the negative effects are undeniable, and efforts are needed to mitigate the use of internet shutdowns and protect businesses’ ability to operate freely online. Listen to the podcast to learn more.
(Host and Producer: Anjana PV
About the State of the Economy Podcast
The Indian economy has been hailed as a bright spot in the gloomy mood that seems to be gripping the rest of the world. But some sectors remain stagnant while others appear to be thriving. To make sense of the country’s mass of contradictions, Business Line brings you podcasts from experts across a range of sectors, from finance, marketing, technology to startups.
