In News:

Release of Report ‘Estimation and Measurement of India’s Digital Economy’ by Ministry of Electronics & Information Technology.

Key Highlights:

• Released by: Ministry of Electronics & Information Technology (MeitY)
• Prepared by: Indian Council for Research on International Economic Relations (ICRIER)
• Significance: First credible and current estimate of the digital economy using international frameworks (OECD & ADB).
• India is the first developing country to adopt the OECD framework for measuring the digital economy.

Key Findings (2022–23)

Indicator                                                Details

Size                                                  ?31.64 lakh crore (~USD 402 billion), 11.74% of national income (GVA)

Employment                                   14.67 million workers (2.55% of the workforce)

Projected Share by 2029–30          Nearly 20% of GDP (surpassing agriculture & manufacturing)

Structure of India’s Digital Economy

• Digitally Enabling Industries (7.83% of GVA): ICT services, telecom, manufacturing of digital hardware
• New Digital Industries (2%): Big Tech, digital platforms, intermediaries (e.g., e-commerce, ride-sharing)
• Digitalization of Traditional Sectors (2%): BFSI (Banking, Financial Services, Insurance), trade, education
  • Insight: Digital transformation is spreading beyond ICT into traditional sectors.

Frameworks Used

Framework                     Purpose

OECD                             Estimating core digital and enabling sectors

ADB Input-Output       Broader economic impact via inter-industry linkages

India’s Expansion         Includes digital share in BFSI, trade, education – not covered under OECD

Key Drivers of India’s Digital Economy

• Widespread mobile use: 1.14 billion subscribers in India
• High internet traffic: 3rd globally, with avg. 16.9 GB/month
• 5G leadership: 2nd largest 5G smartphone market in 2024
• Aadhaar success: 1.3+ billion biometric IDs issued
• Digital payments boom: 1,644 billion transactions in FY24
• ICT service exports: USD 162 billion (2nd highest globally)
• AI leadership: India leads GitHub AI contributions (23%)
• Startup ecosystem: 3rd highest number of unicorns globally

Future Projections (By 2030)

• Digital economy to reach ~20% of national income
• Growth drivers:
  • Expansion of digital platforms & intermediaries
  • Deepening digitalization in all sectors
  • Greater internet & broadband access

Challenges in Measuring Digital Economy

• Difficulty in defining digital sectors due to their integrated nature
• Conventional national accounting systems are inadequate
• Lack of data from:
  • Informal sector digitalization
  • Smaller platforms and startups
  • Digital shifts in healthcare, logistics, etc.

Importance of This Report

• Policy Formulation: Enables targeted strategies for digital growth
• Business Strategy: Helps identify trends, plan investments
• Global Standing: Puts India among early adopters of robust measurement frameworks