Digital addiction can hurt jobs, earnings and economy, warns Economic Survey

The risks of digital addiction go far beyond individual physical and mental health, and can significantly hurt the economy and productivity.

The Economic Survey has, for the first time, cautioned against the deep impact of digital addiction on India’s economy. It weighs the benefits of internet access, such as learning, jobs, and civic participation, against the economic and social risks, ranging from lost study hours and reduced productivity to healthcare burdens and financial losses resulting from risky online behaviours, to conclude that digital addiction is becoming a pressing economic concern.

“Beyond direct economic costs from online purchases, gaming, and cyber fraud, it can reduce employability, productivity, and lifetime earnings. Compulsive digital use is linked to anxiety, stress, depression, and sleep disturbances, especially among students facing academic pressure and exposure to cyberbullying and high-stimulus platforms,” the survey noted.

The government's assessment comes at a time when various countries have taken measures to restrict and limit social media usage for minors. Australia, for instance, has banned social media accounts for children under 16. In India, the ban on real-money gaming apps under the Online Gaming (Regulation) Act, 2025, has been a step in the same direction, the survey says.

“The Gen Alpha and Gen Beta are referred to as digital natives as they are born in an era of smartphones and digital devices, where the usage is as high as six-seven hours (daily) on average, leaving no time for their personal development and a lack of focus on other things. The bigger concern, however, is that it is not a part of their life, but a way of their life, and they do not know alternatives, so they don’t realize it is even an addiction and what its downsides are,” said Narayanan Ramaswamy, partner and national leader for education and skill development practice at consulting firm KPMG in India.

Ramaswamy highlights that if a ban on underage social media usage, like Australia, were to be implemented in India, the youngsters will face high-intensity withdrawal symptoms, which will be hard for them to cope with.

The survey highlights the growing contribution of the digital economy, pegged at 11.74% of national income in FY23, which is projected to rise to 13.42% in FY25. However, this clashes with the negative impact it is having on the population. It highlights that 350 million people use social media in India, whereas 400 million use OTT (over-the-top) and food delivery services.

Lack of comprehensive data

The survey also draws attention to the lack of comprehensive nationwide data on mental health risks from digital usage, including standardized metrics for screen time issues like sleep debt, anxiety, productivity impacts, and cyberbullying, as well as limited adult-focused programs. To address these gaps, governments and communities should create offline youth hubs in urban slums and rural areas. Since digital access can't be fully restricted, schools or similar institutions can host moderated, safe online spaces that offer peer support and verified mental health resources, supervised by trained facilitators.

“The most significant concern for psychologists is the ‘displacement effect’—screens replace the hands-on, sensory-rich play that builds neural pathways. Excessive screen time is linked to difficulties with impulse control, organization, and focus,” Aanchal Anand, a Delhi based child and adolescent psychologist at Mindzcraft told Mint. “Over-reliance on screens can limit a child's ability to observe and engage with their natural environment, leading to slower cognitive processing and reduced flexibility in thinking,” Anand added.

Schools must lead by introducing a digital wellness curriculum on screen time literacy, cybersafety, and mental health awareness, supported by cybersafety drills, peer mentor programs, and mandatory daily physical activity to build resilience. Reliance on online teaching tools, which expanded during Covid-19, should shift toward greater offline engagement, the survey suggests.