Digital Economy to Constitute a Fifth of Indian GDP by 2030 – ICRIER Report
- January 24, 2025
- Posted by: OptimizeIAS Team
- Category: DPN Topics
No Comments
Digital Economy to Constitute a Fifth of Indian GDP by 2030 – ICRIER Report
Sub: Eco
Sec: National Income
Why in News?
- The Indian Council for Research on International Economic Relations (ICRIER) has released a report, in collaboration with the Ministry of Electronics and Information Technology, projecting that India’s digital economy will contribute nearly 20% of GDP by 2030, marking the first official attempt to quantify its size.
Context
- India’s rapid digital transformation, fuelled by advancements in ICT infrastructure, increasing internet penetration, and a digital-first approach in banking, education, and services, positions the digital economy as a key driver of national growth.
Key Highlights
- Projections for Digital Economy Growth
- 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.
- Framework for Estimation
- The report uses a combined definition from the OECD and ADB, while also including the digital share of traditional industries (e.g., BFSI, trade, education).
- The “traditional ICT” sector remains the largest segment of the digital economy.
- Sectoral Scope
- Focuses on digitally-enabled services across diverse sectors, such as financial services, education, and trade, alongside traditional IT and ICT services.
- Significance of the Study
- Marks the first attempt by the government to quantify the digital economy’s size comprehensively.
- Highlights India’s transition towards becoming a digitally-driven economy, influencing both domestic policy and international economic strategies.
Implications of the Report
- Economic Boost:
- Establishes the digital economy as a key driver of GDP growth, showcasing India’s readiness for a technology-led transformation.
- Policy Framing:
- Provides a data-driven framework for policymakers to channel investments and incentives toward expanding the digital ecosystem.
- Global Competitiveness:
- Reinforces India’s position as a global hub for digital innovation, with increased scope for attracting foreign investment in ICT and related sectors.
Conclusion
- ICRIER’s report underscores the vital role of the digital economy in India’s growth story, with its share projected to almost double by 2030. This comprehensive quantification sets the stage for accelerated digital inclusion, policy reforms, and infrastructure development, ensuring India capitalizes on its digital advantage.