Internet Applications to contribute Rs 36 lakh crore to India's GDP by 2020:Report

NEW DELHI: A 17% increase in the total internet traffic in India in 2015-16, contributed to an increase of Rs. 7 lakh crore in Gross Domestic Product (GDP), of which at least Rs 1.4 lakh crore (US$ 20.4 billion) was due to Internet based app services, according to ICRIER and  Broadband India Forum study.

This puts the Internet’s contribution to India’s GDP at about 5.6% in 2015-16. The contribution is estimated to grow to nearly 16% of the country’s GDP by 2020 or Rs 36 lakh crores (USD 534 billion), of which apps will contribute about half.

The study on “Estimating the Value of New Generation Internet based Application Services in India” was unveiled by Communications Minsiter Manoj Sinha in the presence of senior officers from MeiTY, TRAI, Niti Aayog and champions of the broadband industry.

“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. Interestingly, we found that the ecosystem’s contribution went beyond just economic into social areas such as mainstreaming the differently abled and enabling women safety among others,” said Dr. Rajat Kathuria, Director and Chief Executive, ICRIER, who was one of the four researchers on the project including Mansi Kedia, Gangesh Varma and Kaushambi Bagchi.

The study, beyond econometric estimations, also captures in-depth case studies of 16 service/app companies capturing impact generation at a micro level in key sectors of travel, healthcare, education, entertainment, utilities, digital payments, social, navigation and Government services. Companies covered include Makemytrip, Practo, PayTM, Urbanclap, Netflix, Wynk, Byju’s, Truecaller, farMart and MP Mobile.

The case studies bring alive different aspects of impact created, such as potential for increased income and job creation, easy access to credible information and Government services, lowering costs for buyers and sellers, creating a platform for smaller businesses and individuals to market their products and services, popularizing the use of vernacular language and enabling women safety among others.

“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. 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,” said TV Ramachandran, President, Broadband India Forum.

The study also makes 10 recommendations on the demand and supply side to ensure long-term growth of the internet services and apps economy and its sustained contribution to India’s GDP.