*The Reserve Bank of India, in a fresh study, aims to measure the size of the country’s Digital Economy, and how it interacts with other non-digital sectors

Gbenga Kayode | ConsumerConnect

Armed with strong technology adoption, a research paper in the latest Reserve Bank of India (RBI) bulletin has revealed that the country’s  Digital Economy grew 2.4 times faster than the overall economy from 2014 to 2019.

The Central Bank said in the bulletin, that “India’s digital economy grew 2.4 times faster than the Indian economy, with strong forward linkages to non-digital sectors.

“Digital output multiplier has increased over time, highlighting the role of investments to drive growth, and 62.4 million (11.6%) workers are employed in the digitally dependent economy.”

In regard to the size estimate, the RBI study was aimed to measure the size of India’s Digital Economy, and how it interacts with other non-digital sectors, report stated.

The research paper, which followed the Asian Development Bank’s 2021 framework, showed the core Digital Economy was estimated to be worth $0.11 trillion, or 5.40 percent or of the Indian economy’s overall gross value added (GVA) of $1.99 trillion in 2014.

The study indicated this increased by more than 15 percent annually in absolute terms and the digital economy contributed 8.5 percent of the economy’s GVA in 2019.

In terms of the pulling effect of the development, the study said the digitally dependent economy comprised around 22.4 percent of the overall economy in 2019.

The report also stated: “The core digital economy prominently acts as a supplier of value-added to the non-digital sectors because the forward linkages are stronger than the backward linkages.”

The research report further noted that policies, such as ‘Make in India’, and schemes that incentivise domestic production would be crucial in increasing this pulling force of the digital economy.