Context:
The Indian Council for Research on International Economic Relations (ICRIER) in association with the Ministry of Electronics and Information Technology has published a report that estimates India’s digital economy will account for nearly 20 of GDP by 2030. This is the first official attempt to estimate the size of the digital economy in India.
Background
- Indias swift digital transformation is being spurred by
- Improvements in ICT infrastructure
- Growing internet penetration
- A digitalfirst approach across banking education and services
This new transformation puts the digital economy firmly at the top of the drivers of national growth
Important Takeaways
Growth Projections of the Digital Economy
- 2022–23: Digital economy constituted 11.74% of national income.
- 2024–25: Projected to grow to 13.42% of GDP.
- 2030: Digital economy expected to account for nearly 20% of GDP.
- Growth rate: Expected to expand twice as fast as the overall economy.
- Estimation Framework
- The report adopts a definition combining OECD and ADB and incorporates the share of the digital sector in traditional industries such as BFSI trade and education. Traditional (ICT) continues to be the largest sector of the digital economy.
- Sectoral Coverage
- Focuses on digitally enabled services across diverse sectors like financial services education trade and traditional IT and ICT services.
Significance of the Study
- First attempt to comprehensively quantify the digital economys size in India.
- Highlights India’s transition towards becoming a digitally driven economy, impacting both domestic policy and international economic strategies.
Implications of the Report
- Economic Boost
- It does so by firmly establishing the digital economy as a big contributor to GDP growth thereby readying India for a technology led transformation.
- Policy Framing
- Sets a data driven framework for action for the government to focus on investments and incentives for an expansion of the digital ecosystem.
- Global Competitiveness
- Reaffirms India’s status as a global hub for digital innovation thus creating greater opportunities for foreign investment in ICT and related sectors.
The report by ICRIER depicts how the digital economy is playing a critical role in India’s growth story. According to growth projections India will have intensified digital inclusion policy reforms and infrastructure development placing the country under an immense digital advantage by 2030.
