Digital Transformation and Economic Growth in India: An Empirical Study
Prof. B. Sudhakar Reddy
Senior Professor, Department of Economics, Dean, Faculty of Social Sciences, & Director, ICSSR-SRC, Osmania University, Hyderabad.
Dr. K. Shobha Rani
Associate Professor in Economics, Department of Economics, Government Degree College for Women, Hussainialam, Shah Gunj, Hyderabad.
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http://doi.org/10.37648/ijps.v21i01.001
Abstract
Digital transformation has become a vital driver of economic growth in emerging economies by improving productivity, increasing financial access, and enhancing institutional efficiency. Over the past decade, India has experienced swift digital development, powered by widespread internet use, the expansion of digital payment systems, and continuous progress in the information and communication technology (ICT) sector. In this context, the current study empirically investigates the impact of digital transformation on India’s economic growth from 2011 to 2023, using official secondary data from the World Bank, the Reserve Bank of India, the National Statistical Office, and the Ministry of Electronics and Information Technology. The study employs time-series econometric techniques, including descriptive analysis, Augmented Dickey–Fuller unit root tests, and multiple regression, to analyze the relationship between key digital indicators and GDP growth. The results reveal a statistically significant, positive connection between internet access, the expansion of digital payments, the ICT sector's contribution, and economic growth, indicating that digital infrastructure and digital financial services are essential for enhancing macroeconomic performance. While the findings highlight the growth-promoting potential of digitalization, they also identify ongoing challenges such as digital inequality, unequal access, and skill gaps that may hinder the inclusiveness of digitally driven growth. The study contributes to the existing literature with updated macro-level evidence from India. It offers valuable policy insights on leveraging digital transformation as a sustainable, inclusive force for economic growth in developing economies.
Keywords:
Digital Economy; Economic Growth; ICT; Financial Inclusion; India
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