India’s digital economy to constitute 20% of nation’s GDP by 2026: RBI

India’s digital economy could constitute as much as 20 per cent of the nation’s entire GDP by the year 2026, the Reserve Bank of India’s Report On Currency And Finance For The Year 2023-’24 has said. The report noted that digital economy currently comprises around a tenth of the country’s GDP.

“It is estimated that the digital economy currently accounts for a tenth of India’s GDP; going by growth rates observed over the past decade, it is poised to constitute a fifth of GDP by 2026,” the report stated.

UPI REDEFINES RETAIL

The boost in digital economy comes from businesses and startups adopting technology such as Unified Payments Interface (UPI), mobile banking, biometric scanning, and digital locker facilities, among others. This, in turn, has provided an impetus to e-markets, the banking sector and public finance systems, the report said.

The UPI system, in particular, stands out as a success story because it has revolutionised the retail payment process, the report noted by increasingly making transactions cashless and quicker.

HIGH DATA USE, LOW COSTS

The digital revolution in the country is powered by certain key factors, the report said. Among them is the growing popularity of the internet. India’s internet user base has burgeoned by 199 million in only three years and is today spread across 55 per cent of the country, according to 2023 data. The country is among the biggest consumers of mobile data consumption, too, with per-month consumption reaching 24.1 gigabyte (GB) in 2023 on an average.

The rapid spread of internet in the country is because of affordable rates, the report claimed. India’s per GB cost, at Rs 13.32, is the lowest in the world.

eRUPEE PILOT RUN

The RBI report highlighted the potential of its Central Bank Digital Currency (CBDC), the eRupee, while facilitating cross-border transactions and bolstering India’s stature in the international economy scene. The e-rupees is expected to make monetary dealings quicker and hassle-free. Currently, the RBI is conducting pilot runs of the eRupee, the report said.