RBI: Digital fastest spinning wheel of India’s economy

Mumbai: India’s digital economy is growing 2.4 times faster than the overall economic growth as technology adoption is quite strong, a research paper in RBI’s Bulletin said.

“India’s digital economy grew 2.4 times faster than India’s economy, with strong forward linkages to non-digital sectors; the digital output multiplier has increased over time, the role of investment in driving growth and employment of 62.4 million (11.6%) workers highlighting that they do. digitally dependent economy,” the Reserve Bank of India stated in its bulletin.

The RBI study aims to measure the size of India’s digital economy and how it interacts with other non-digital sectors.

According to the study, following the Asian Development Bank’s 2021 framework, the digital core economy is estimated to account for 5.40% or $0.11 trillion of the Indian economy’s gross value added (GVA) in 2014 ($1.99 trillion), an increase from . 15% in absolute annual values ​​to contribute 8.5% of the GDP of the economy in 2019.

“Our estimates are broadly consistent with ADB’s findings,” the RBI research paper said. “The growth rate of the digital core economy was 2.4 times faster than the annual growth rate of the economy as a whole. The digital core economy plays a significant role as a provider of added value to non-digital sectors, because forward linkages are stronger than backward linkages.”

The RBI research paper added that increasing the ability of the digital economy to act as a pulling force through policies like ‘Make in India’ and the PLI scheme that promotes domestic production are critical to India’s growth. According to the data provided. In the RBI paper, a digitally dependent economy was around 22.4% of the total economy in 2019. “While there has been tremendous growth in the digital core economy, the size of the digitally dependent economy has not grown at a comparable pace.” the paper said. “This may be because digital innovations have an impact on the economy in the longer term.”

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