India, the fastest growing large economyExpects that its digital economy will grow almost twice as fast as the total economy and contribute to almost a fifth of national income by 2030.
“In the short term, the highest growth is likely to come from the growth of digital intermediaries and platforms, followed by higher digital diffusion and digitalisation of the rest of the economy,” said the Ministry of Electronics and IT (Meity) in a statement.
This means that in less than six years, the proportion of the digital economy will be greater than agriculture or manufacturing in the country. Agriculture employs about 45% of India’s labor and contributes almost 15% to its finances of $ 3.5 trillion.
“India’s digital economy is expected to grow almost twice as fast as the total economy and contributes to almost one fifth of national income and exceeds 1-ticket brand 2029-30,” S KrishnanSaid in the preface to the report with the title Estimate and measurement of India’s digital economy. The report is the first to quantify the added value and employment generated by India’s rapidly growing digital sector.
India’s digital economy was 11.74% of national income 2022-23 and is likely to increase to 13.42% in 2024-25.
India’s digital economy 2022-23 was approximately $ 402 billion in gross domestic product (BDP).
“Not only is India the third largest digitized country in the world, it has made significant progress in strengthening individual users and delivering services on population scale,” Krishnan said.
“On the global at the forefront of the digital transformationIndia mainstreamed the idea of Digital public infrastructure Through its G20 presidency 2023. The government’s digital India program lays the foundation for building the world’s largest digital identity program, Aadhaar, and the fastest growing real -time payment system, UPI (United payment interface). These have become power multipliers for the private sector’s innovation, ”dedicated Krishnan.
In 2022-23, the digital economy accounted for 14.67 million workers or 2.55% of India’s estimated labor. By comparison, agriculture accounted for 263.6 million (or 45.8% of the total labor force), while the production of employees 65.6 million workers (or 11.4% of the labor force).
Biggest contributors to Github AI
The report stated that India has become the largest contributor to the Global Github AI project and is ranked third in the number of home -grown unicorns. Github is an online platform that allows developers to store, share and collaborate on code, web pages and other content.
India’s contribution to Github for AI projects is the highest in the world, 23%, followed by the United States by 14%, the report says. From April 2024, the third largest number of home -grown unicorns was per country in India after the United States and China.
According to the report India’s digital economy Include cloud services and global capacity centers (GCCS.) With AI adoption increasesIndia’s public cloud market is expected to grow to 24% CAGR (composed annual growth rate) and reaches $ 20.3 billion in 2027.
Global capacity centers (GCC) are offshore centers established by multinational companies to provide various services to their parent organizations. GCCs in India provide services such as research and development, IT support and management of business processes. India hosts 55% of the world’s GCCs, with the number increasing from 1,250 2017-19 to an estimated 1,900 in 2023-25. The ICT sector (information and communication technology), especially computer-related services, contributes significantly to this growth, with these companies that account for 6% of the total computer-related service output, according to the report.
India’s digital empowerment sector
India’s digital possible industry, which includes sectors such as information and communication-related services, telecommunications (traditionally called ICT sector) and the manufacture of electronic components, computers and communication equipment, is the highest contributor, which accounts for 7.83% of GVA (gross value) .
The new digital industries, which include major technical players, other digital platforms and intermediaries and companies, depending on digital intermediaries, account for almost 2% of GVA.
The digital contribution from three traditional industries – BFSI (banking, financial services and insurance), trade and education – is 2% of national GVA.
“This is a clear indication that India’s digital economy is steadily moving beyond the kingdom of the ICT industry and spreads across all parts of the economy through digital platforms and digitalisation of brick and mortar sectors,” the report said.
“In the future, the increasing proportion of Digital economy In GVA, it is likely to come from traditional industries that use digital tools and practice. Among all sectors, the BFSI sector seems to be the most digitized, with almost 20 percent of the sector’s production from the digital side, ”says the report.
India’s digital economy has increased much faster than the rest of the economy. While the total economy, measured in nominal GVA, grew at a speed of 11.8% over the past ten years, the sectors that included the digital possible industry grew by 17.3%. Digital platforms and intermediaries grow much faster – to about 30% – and are likely to do so over the next few years. Consequently, the profits to companies and individual entrepreneurs will also be higher, the report added.
Recommendations
The report identified several areas of improvement and made recommendations to improve the simplicity of doing business in India.
The rapid growth of digital platforms and companies has raised concerns about risks such as miss or data, misinformation and monopolization abuse. In response, the supervisory authorities have introduced new regulations, many of which are still in consultation, in drafts or ongoing, with some who see audits.
“Until finally, companies, especially new companies, would find it challenging to navigate uncertainty,” the report pointed out.
The recommendations for improvements include minimizing the time between the announcement of intention and the law. Cyber attacks and cyber crime is a great vulnerability when it comes to rapidly digitizing economies, including India. Sectors such as health, banking and the government are particularly likely to attack. When digitalisation accelerates, Building resilience and trust is crucial.
“Bring regulatory clarity for the use of new techniques such as Crypto coursesGames and Generative AIAnd remove frictions in the operation of digital platforms, ”recommended the report.
The government’s policy and financial incentives have supported India’s industry growth, especially in IT services, mobile phones and telecommunications. However, these efforts are insufficient to accelerate the digitally enabling sector, which needs resilient, domestic products for both household use and exports.
The report pointed out that challenges include slow semiconductor uptake, low -value supplement in mobile phones, limited telecom competition and minimal representation in standard setting.
The report recommends that you invest in high quality physical infrastructure, such as logistics and energy resources, which lower the costs of doing business; Improve coordination in the center state and provide kind conditions to investors, both foreign and domestic; Re-evaluation of business laws, including work laws, such as extending working hours in the ICT sector, providing adequate safeguards for workers, to create a balance between labor rights and compliance costs.
Why the need to quantify?
The Indian economy have digitized At a remarkable rate over the past decade. Nevertheless, there are no credible and updated estimates of the digital economy’s contributions to national income and employment. Quantify and understand the role of the digital economy in pursuing economic growth, employment and sustainable development is crucial for both decision makers and the private sector, said Meity in its statement.
“This report is an attempt to compile the first set of credible, understandable and current estimates of India’s digital economy based on an internationally accepted framework. The insight from this report is invaluable for decision makers, companies and other stakeholders, ”said Meity.
Exact information about the digital economy is expected to enable more effective political decisions, which enables targeted interventions and investments to support digital growth. For companies, you can understand the contribution from digital technology to their sectors to help inform strategic decisions, drive innovation and increase competitiveness in a globalized market.
This is particularly important when India reads to present the budget 2025-2026 in Parliament on February 1st. The Union budget is an annual financial report that describes planned state expenditure and expected revenue for a particular year.
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