Context: According to a report from the Ministry of Electronics and Information Technology (MeitY), India’s digital economy is projected to contribute one-fifth of the country’s national income by 2030.
Relevance of the Topic: Prelims: Key trends of Digital Economy.
Major Highlights of the Report
- The report titled “Estimation and Measurement of India’s Digital Economy,” was released by the Indian Council for Research on International Economic Relations (ICRIER) in collaboration with MeitY.
- Methodology used: globally adopted methodologies developed by Organisation for Economic Co-operation and Development (OECD) and Asian Development Bank (ADB).
- Limitations: The estimates are conservative due to unavailability of data on (i) smaller digital platforms, (ii) digitalisation of the informal sector and (iii) digitalisation of other traditional sectors such as health and logistics.
Digital Economy: Key Numbers and Contributions
- Contribution to National Income:
- As per the report, India’s digital economy is estimated at 11.74% of the national income in 2022-23. In absolute numbers, it is equivalent to INR 31.64 lakh crore (~USD 402 billion) in GDP.
- It is likely to rise to 13.42% of the national income by 2024-25.
- Highest contributor:
- The digital-enabling industry — comprising ICT services, telecommunication, manufacturing of electronic components, computers — is the highest contributor, accounting for 7.83% of GVA.
- Emerging digital platforms, intermediaries, and new-age digital businesses collectively added 2% to GVA.
- India’s Global Digital Standing:
- India ranks 3rd in the world for economy-wide digitalisation and 12th among G20 nations for digital adoption by individual users.
- India is the second-largest exporter of ICT services globally, with exports valued at USD 162 billion in 2023, just behind Ireland.
- India’s contribution to artificial intelligence (AI) projects on GitHub is the highest in the world, accounting for 23% of all contributions.
- India has the third-largest number of homegrown unicorns globally, after the US and China, underscoring the country’s expanding startup ecosystem.
- India leads in digital transactions, processing over 1,644 billion transactions in FY 2023-24.
- Employment generation:
- India’s digital economy employed 14.67 million workers in 2022-23, representing 2.55% of the country’s workforce.
- Projections for 2030:
- India’s digital economy is poised for exponential growth, projected to account for nearly 20% of the national GVA by 2030.
- India's digital economy’s GDP could surpass $1 trillion by 2029, driven by the rapid adoption of emerging technologies such as artificial intelligence, cloud computing, blockchain, widespread 4G and 5G access, and innovations such as the Unified Payments Interface (UPI).