The impact of Digital Economy on Economic Growth in India

Abstract The digital economy has turned out to be a major contributor to India's economic transformation and growth. The digitalisation of business, government, and consumers has changed the way they interact, with speedy progress in digital technologies, internet penetration, digital payments, e-commerce, and digital public infrastructure (DPI). This study explores the effects of the digital economy on the economic growth of India and specifically on productivity, job creation, financial inclusion, entrepreneurship and innovation. The initiatives like Digital India, Unified Payments Interface (UPI), and the digital banking are helping in economic participation and better access to financial and public services. However, the rise of digital platforms has also opened up opportunities for small businesses and entrepreneurs to reach larger markets and lower transaction fees. There are however challenges that are hindering the inclusive benefits of digitalisation, including the digital divide, the threat of cyber-security, the issue of data privacy, insufficient digital literacy, and unequal access to digital infrastructure. The study finds digital economy has great potential to boost India's economic growth and competitiveness. Development of digital skills, inclusive access to technology, strengthening digital infrastructure and securing cyber security are key to sustainable and inclusive economic growth in India.