Technology boosting the Indian economy – Economy News

December 3, 2023

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– By Rumki Majumdar

Whether completing a transaction with a vendor in under a minute or receiving groceries at your doorstep faster than it takes to get ready to step out, India’s digital proficiency and innovation are reaching unprecedented levels. It’s evident that as India aims for a USD 10 trillion-dollar economy by the early next decade, this growth will be propelled by digitisation revolutionising every segment of the economy.

What’s interesting is that India’s digital drive is witnessing equal participation from both the government and the private sector. Consequently, digitisation is fostering rapid growth that is more inclusive and equitable. Expected to contribute 20 per cent of GDP over the next four years, the digital economy will play a pivotal role in narrowing the gap between rural and urban areas and bridging the divide between the haves and have-nots.

The government is heavily investing to further enhance its digital infrastructure, turning it into a tool for building a more inclusive business ecosystem and empowering citizens. Whether through digital payment platforms or improved broadband network connectivity, the shift from legacy to new-age digital platforms is promoting financial inclusion, enhancing income opportunities, enabling stakeholders to make informed decisions, and ensuring improved and seamless access to services across the country.

Government efforts to accelerate India’s digitisation journey are creating new opportunities for citizens, businesses, and industries alike. With the rapid penetration of the internet and smartphones, digitisation is creating endless possibilities for delivering meaningful solutions that transform lives, livelihoods, business practices, and governance.

Digitisation has given a strong boost to entrepreneurship in the country. With tech startups taking the lead, India has the third-largest startup ecosystem creating close to a million jobs since 2017. The total number of tech startups in India is estimated to grow 2.6x from 68K (2023) to 180K (2030).

Government digitisation platforms, such as ONDC, are empowering India’s MSME segment by providing them access to a broader and diverse customer base. Besides, the ecosystem is improving their access to a wide range of formal financing. This has been immensely beneficial for MSMEs that are either unbanked or have a low credit history, limiting their access to formal lending institutions.

In the manufacturing sector, technology is rapidly transforming the entire manufacturing value chain— starting from research and development to quality assurance. Whether it’s 3D printing or additive manufacturing providing flexibility in production, robotics and automation delivering products of global standards with reduced errors and costs, or IoT sensors and AI/ML, along with data analytics integrated throughout the digital factory and warehouses, optimising manufacturing processes, resource use, and the supply chain, technology is helping the sector reap economies of scale and accelerate its integration into the global value chain.

Even in social sectors, digitisation is transforming the delivery of basic services. In healthcare, for instance, digitisation is turning a fragmented healthcare system into an integrated, interconnected, effective, and patient-centric model. According to Deloitte’s recent study, the sector will see a shift towards preventive, predictive, and personalised healthcare, with rapid growth in care delivery from hospitals to homes. Similarly, in education, digitally empowered classrooms using modern technology are expected to make learning more collaborative, engaging, and accessible to anyone who wants to learn, anytime, and anywhere.

India’s innovation in technology is not only proliferating within its boundaries but also around the world. India has a thriving IT industry that is a major contributor to the country’s GDP, employment, and exports. In 2022, the Indian IT industry generated $227 billion in revenue ($177 billion of revenue from the export of technology services). In 2023, India’s IT industry is estimated to register an 8.4 per cent rise in total revenue to reach $245 billion ($194 billion from exports).

While technology will be our strength to remain competitive, we must address skilling gaps to prepare the workforce for the future. Clear, consistent, and business-friendly policies are needed to build trust among users and providers. This will help this fastest growing nation to not only define its decade but also establish its techade touch newer heights.

(Rumki Majumdar is an Economist at Deloitte India.)

(Disclaimer: Views expressed are personal and do not reflect the official position or policy of Financial Express Online. Reproducing this content without permission is prohibited.)

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