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The report also speaks about digitalisation of some traditional sectors in India, noting that the highest level of digitalisation has occurred in the payments segment of banks
In 2022-23, the size of India’s digital economy stood at 11.74 per cent of total national income, which is equivalent to Rs. 28.94 lakh crore. (PTI)
Digital economy will account for nearly one-fifth of the economy by 2030, and India’s digital economy is expected to grow almost twice as fast as the overall economy, accounting for nearly 20 per cent of the GVA (Gross Value Added) by 2030, according to projections by a new government report.
This includes the digital economy defined by OECD (Organisation for Economic Cooperation and Development) as well as the digital share of three sectors identified as digitally disrupted. In 2022-23, the size of India’s digital economy stood at 11.74 per cent of total national income, which is equivalent to Rs. 28.94 lakh crore.
“As expected, the digital economy has been growing much faster than the rest of the economy. While the overall economy, measured in nominal GVA, was growing at a rate of 11.8 per cent over the last 10 years, the sectors comprising the digital-enabling industry were growing at 17.3 per cent. Digital platforms and intermediaries are growing much faster (30 per cent) and are likely to do so for the next few years. Consequently, the gains to businesses and individual entrepreneurs are also going to be higher,” says the report released by the Ministry of Electronics & Information Technology.
The report is titled ‘Estimation and Measurement of India’s Digital Economy’.
It also says that digital economy employs nearly 2.5 per cent of the workforce. In 2022-23, the digital economy accounted for 14.67 million workers, which is nearly 2.55 per cent of India’s workforce.
Men dominate the workforce in digital economy as core activities involving the production of digital technologies or services such as coding and programming activities feature male workers.
However, the report says the digitalisation process itself has been associated with increased female employment. “Not only do digital platforms create new job opportunities for women, the digitalisation of traditional sectors also creates options for women that were hitherto unavailable due to mobility restrictions and safety concerns.”
The report also speaks about digitalisation of some traditional sectors in India, noting that the highest level of digitalisation has occurred in the payments segment of banks.
On an average, over 95 per cent payment transactions for public and private sector banks are now digital. Other transaction categories, such as loan applications and investments, are relatively less digitalised.
For the retail sector, most companies are opting for an omni-channel model, of which digital is a steadily growing part. In fact, many companies are developing their own platforms in addition to selling on intermediary platforms.
Among educational institutions, there are three clear formats: completely offline, hybrid, and completely online.
Hotels are also digitalising several aspects of their business, including supply chain, vendor management, customer experience, and sales, the report says.
Overall, retail sales are digitalising much more than wholesale sales. Firms are also investing in digital methods for customer acquisition and business development. Chatbots and AI applications are also fairly commonplace.
Some of the faster-growing segments of the digital economy are the Cloud Market. In fact, India’s cloud market accounted for 1.2 per cent of the global market in 2020-23. With businesses increasingly adopting AI for streamlining operations, enhancing productivity, improving customer experience, and launching new services, the cloud market is expected to grow at 24 per cent over the 2024-27 period.
India has also become an international leader for Global Capability Centres (GCC)s, home to almost 55 per cent of the world’s GCCs in 2022. GCCs are offshore centres established by multinational corporations to provide a variety of services to their parent organisations.
The number of operational GCCs in India has been on the rise, from 1,250 in 2017-19 to 1,580 in 2020-22, and predicted to rise to 1,900 in 2023-25.
The report says there is a clear indication going forward of the digital economy moving outside the realm of big tech and digital platforms to digitalisation in the rest of the economy.
