Internet-based apps can contribute Rs18 trillion to India’s GDP by 2020, says study
Study estimates internet’s contribution to grow to nearly 16% of India’s GDP by 2020, which translates to Rs36 trillion, with half of this coming from internet-based apps
New Delhi: Internet-based applications in India have the potential to contribute Rs18 trillion to India’s gross domestic product (GDP) by 2020, according to study released by the New Delhi-based International Council for Research in International Economic Relations (ICRIER) and telecom lobby group Broadband India Forum on Friday.
The study, titled ‘Estimating the Value of New Generation Internet based Application Services in India” and released by telecom minister Manoj Sinha in New Delhi, estimated the internet’s contribution to grow to nearly 16% of India’s GDP by 2020, which translates to Rs 36 trillion ($534 billion), with half of this coming from internet-based apps.
“As per the study, a 17% increase in the total internet traffic in India in 2015-16 contributed to an increase of Rs7 lakh crore (7 trillion) in GDP of which at least Rs 1.4 lakh crores (Rs. 1.4 trillion ) was due to internet-based app services. This puts the internet’s contribution to India’s GDP at about 5.6% in 2015-16,” the report said.
The impact of the apps economy in India is double the global impact, the survey showed. “A 10% increase in total internet traffic and mobile internet traffic led to an increase in India’s GDP by 3.3% and 1.3% respectively as against the global average of 1.3% and 0.7%.”
Internet apps and services are disrupting traditional industries. Regulation, globally, is evolving to strike the right balance between protecting consumer/business interests and encouraging the ecosystem to innovate further, said TV Ramachandran, president, Broadband India Forum.
Ramachandran added, “India needs to chart its own course from a policy/regulation perspective considering the significant higher impact on its economy. It needs to resist the temptation to follow global precedence or come up with defining laws without active stakeholder discussion.”
The study emphasized the need to address a lack of digital infrastructure, invest in India’s e-governance app-ecosystem, encourage development of vernacular content, use the Startup India programme to accelerate growth in the sector, promote skill development for app developers, promote government and private sector collaboration, strengthen cyber security infrastructure, change perceptions and build awareness among consumers, disentangle regulatory needs, and develop a systematic approach to regulations.
“With internet penetration and the start-up ecosystem achieving critical mass, we felt the time was right to study the micro level impact of the internet services and apps on the country and define interventions needed for long term growth,” said Rajat Kathuria, director and chief executive, ICRIER.
The study also included in-depth case studies of 16 service/app companies like Makemytrip, Practo, Paytm, Urbanclap, Netflix, Wynk, Byju’s, Truecaller, farMart and MP Mobile to capture the impact generation at a micro level in the key sectors of travel, healthcare, education, entertainment, utilities, digital payments, social, navigation and government services.