From Digital Adoption to Economic Dominance: India’s Path to Vikasit Bharat

Abstract

India’s digital economy has experienced significant growth over the past decade, emerging as a key driver of economic expansion, employment generation, and technological advancement. The State of India’s Digital Economy Report 2024 highlights that India ranks as the third-largest digitalised economy globally and 12th among G20 nations in terms of digital adoption at the individual level. The digital economy is projected to contribute nearly 20% of national income by 2029-30, surpassing agriculture and manufacturing. In 2022-23, it accounted for 11.74% of GDP (INR 31.64 lakh crore or USD 402 billion) and employed 14.67 million workers (2.55% of the workforce), with a productivity level nearly five times higher than the rest of the economy. Key drivers include the expansion of digital platforms, artificial intelligence (AI), cloud computing, and the rise of global capability centers (GCCs), with India hosting 55% of the world’s GCCs. This study employs a mixed-method approach, combining quantitative and qualitative research techniques. An extensive analysis of national accounts data was conducted to estimate the contribution of digital sectors to GDP and employment, alongside a sector-wise breakdown of Gross Value Added (GVA) to assess the role of digital platforms, ICT services, and digital transformation in BFSI, retail, education, logistics, and hospitality. Secondary data from government reports, industry white papers, and market research studies supported projections on digital economy growth, while primary data collection involved stakeholder consultations and industry surveys to gauge digital adoption trends. Structured interviews with digital industry leaders, policymakers, and multinational corporations operating GCCs in India provided insights into AI adoption, cloud computing, and employment impacts, particularly for women. The study finds that digitalisation is progressing unevenly across industries, with retail rapidly adopting omni-channel models and AI-driven inventory management, while BFSI transactions are largely digital, though revenue-generating activities remain offline. The education sector is shifting towards hybrid models, and logistics and hospitality are integrating AI and metaverse applications. The digital economy’s expansion, at an anticipated 30% annual growth for digital platforms, is expected to create new employment opportunities, particularly benefiting women and gig workers. As India progresses towards its vision of Viksit Bharat by 2047, a digitally empowered economy will be fundamental to achieving this goal. The integration of advanced digital technologies across sectors will accelerate financial inclusion, enhance efficiency in governance, and drive innovation-led economic growth. Strengthening digital infrastructure, upskilling the workforce, and ensuring inclusive digital participation will be critical to positioning India as a global digital leader. By fostering a robust ecosystem for digital transformation, India is poised to leverage its digital prowess to build a resilient, sustainable, and inclusive economy—one that aligns with the aspirations of Viksit Bharat.