NEW DELHI: India is set to become a $1 trillion digital economy by 2028 with deep internet penetration, efficient and cheap 4G and 5G services combined with the government’s digital initiatives, a recent report by Ask Capital has said.
India’s financial ecosystem has undergone a major shift over the last few years under the government’s digital initiatives and is globally leading real-time payments, using home grown technological innovations like UPI for its advantage. India’s digital transformation is expected to be a game changer for economic development.
Since the past few years, increasing use of smartphones and digitalisation of the Indian economy in the past few years has pushed cashless transactions and online purchases.
India’s digital prowess score has surpassed that of developed nations like Japan, the United Kingdom and Germany in the aggregate level of digitalisation, says Indian Council for Research on International Economic Relations (ICRIER).
Pradhan Mantri Jan Dhan Yojana (PMJDY) and the Direct Benefit Transfer (DBT) schemes have shaped universal access and enhanced financial inclusion in the country. Increased mobile and broadband penetration is set to deepen financial inclusion and boost new digital services.
Advanced digital environments with services ranging from entertainment to online education, tele-medicine and health have capitalized better with mobile and internet services.
India’s digital transformation is being accelerated by affordable data, increasing number of smartphone users and growth in e-commerce.
The Telecom Regulatory Authority of India (TRAI) data as on March 2024, suggests that India houses approximately 120 crore telecom. The number of internet subscribers in India has risen from 88.1 crore in March 2023 to 95.4 crore at the end of March 2024, around half are from rural areas.
More than 7.3 crore internet subscribers and over 7.7 crore broadband subscribers were added last year.
Total volume of wireless data usage driven by 4G and 5G technologies has increased from 1,60,054 PB during the year 2022-23 to 1,94,774 PB during the year 2023-24 with yearly growth of 21.69 per cent.
The Indian digital economy, which accounted for 4.5 per cent of India’s GDP in 2014, is expected to contribute 20 per cent of the GDP by 2026.
Retail digital payments have surged by 50.8 per cent from 2017 to 2023. A large scale transformation can already be seen in sectors like finance, education, healthcare, food, travel and e-commerce.
UPI, as per the reports, is expected to contribute 90 per cent of the total retail digital payments in India by 2027.
The RBI is set to launch the Unified Lending Interface (ULI), which aims to make obtaining credit easier, particularly for small and rural borrowers. ULI will also enable the smooth transfer of digital information, such as land records, between data providers and lenders, reducing the time required for credit approvals.
Healthcare schemes like Ayushman Bharat Digital Mission (ABDM) proves to be a backbone of Indian healthcare infrastructure as these facilities have become more accessible with e-Hospital. e-Sanjeevani, the National Telemedicine Service of India is another step towards digital health to achieve Universal Health Coverage.
The education sector that boomed during, Covid-19 gave a new direction to school education, as school classroom lectures shifted to digital screens.
The e-commerce sector is expected to be another key driver for growth going ahead, leading to a surge in digital payment transactions in rural areas.
The report says digital payments in India are about to reach an inflection point and are expected to grow in value to $ 10 trillion by 2026.
The Indian economy’s growth is becoming increasingly inclusive due to innovations and the government’s emphasis on digitalization. With a substantial talent pool, India is projected to advance toward becoming a USD 1 trillion digital economy by 2028.
