ICT’s contribution to output growth surged to 13.2 pc during 1992-2023: RBI paper

New Delhi (The Uttam Hindu): The contribution of information and communication technology (ICT) to output growth in India increased from 5.0 per cent in 1981-1990 to 13.2 per cent during 1992-2023, according to a recent RBI paper. On average, the ICT sector’s productivity fared better than the non-ICT sector for the whole sample period, the paper noted. Following the global trend, India is also experiencing rapid digitalisation, and the impact of digital goods and services on India’s economic growth has become more pronounced, especially after the pandemic. The share of the ICT sector in the total economy Gross value added (GVA) increased over time. Digital technologies let businesses innovate by streamlining operations and lowering expenses associated with communications with clients and suppliers. “ICT, when used as an input in the production process, also improves productivity via deepening,” said the report.

Companies can reduce their ICT expenditures and associated costs like energy, labour and maintenance by switching from owning ICT assets to acquiring ICT services. The economy’s overall productivity performance may eventually benefit from these savings as they improve resource allocation and increase efficiency, said the RBI paper. Meanwhile, the enterprise ICT market in India is set to increase at a sound compound annual growth rate (CAGR) of 17.1 per cent, increasing from $161.3 billion in 2023 to $354.6 billion in 2028. The revenue opportunity is driven by the ongoing digital transformation initiatives taken up by businesses and government, forecasts GlobalData, a leading data and analytics company. This is in line with the positive ICT investment sentiment seen among the enterprises in the country. The BFSI sector to be the largest end-use vertical segment for the ICT market in India, in terms of revenue contribution, and will remain so over the forecast period. The segment is set to account for a 11.3 per cent share of the total cumulative revenue forecasted for 2023-2028.