DPIs to drive India’s GDP Growth by 3X, paving the way to an $8 trillion economy

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Over the past decade, India has witnessed massive transformation, driven by digital revolution, setting it on track to become the world’s third-largest economy within this decade. This change powered by Digital Public Infrastructure (DPIs), is aimed at transforming India into a digitally empowered society and knowledge economy. To assess India’s DPI ecosystem and the impact it has created , nasscom in collaboration with Arthur D. Little, has today released the report, titled, “India’s Digital Public Infrastructure – Accelerating India’s Digital Inclusion.” The report highlights the journey so far, the impact, and significant contribution of DPIs to the Indian economy.

India Impact of DPI

According to the report, matured DPIs (UPI, Aadhaar, GSTN and FASTag), with successful mass adoption and larger economic impact, are impacting approximately 1.3 billion citizens, covering 97% of India’s population. The matured DPIs have enabled a value creation of $31.8 billion, equivalent to 0.9% of India’s GDP in 2022. This assessment encompasses both the direct and indirect impacts generated by these DPIs. Aadhaar has enabled an economic value of $15.2 billion, primarily through the elimination of direct benefits transfer leakages. UPI, on the other hand, has replaced cash transactions and electronic transfers across sectors, contributing $16.2 billion.

Beyond economic value addition, DPIs also contribute to financial benefits, ecological advantages, process efficiencies, and citizen convenience. It saves time by transforming service delivery methods, with each Indian citizen saving an estimated two working days in 2022 through digital services. These initiatives have also enhanced efficiency, eliminated leakages, and boosted profitability across various industries. Ecologically, DPI adoption has led to significant paper savings and carbon emissions reduction. Time saved in logistics & transportation sector reduced carbon emissions by 3.2 Mn tonnes in 2022.  Furthermore, DPIs align with core UN SDG goals by providing citizen-centric solutions.

Speaking on the insights of the report, Debjani Ghosh, President, nasscom said, “India’s digital transformation, propelled by Digital Public Infrastructure, marks a leap towards a digitally empowered economy – a cornerstone of ‘techade, driving the ‘India@47’ growth narrative. DPI’s success has positioned India as a global leader in digital innovation, aiming to influence nations globally, promising equitable access to technology for all and fostering economic growth. DPI’s impact extends beyond borders, envisioning a globally interconnected, inclusive future.”

Impact of DPI at the global level

India’s successful DPIs like Aadhaar and UPI have spurred global interest in similar digital solutions. These interoperable, open-source DPIs are now being adopted or considered by over 30 countries to enhance social and financial inclusion. However, the impact of these solutions depends on the specific challenges they address, often requiring policy changes for maximum effect. Population and demographics also influence social inclusion. If successfully implemented, these nations could reap significant benefits from these digital infrastructures, echoing India’s success.

Echoing the sentiments, Brajesh Singh, President-India, Arthur D. Little shares, “India leads globally in developing Digital Public Infrastructures (DPIs), driving societal transformation through inclusive digital adoption and substantial contributions to the Indian economy. DPIs are poised to propel India towards a $8 trillion economy by 2030, helping the country to achieve a $1 trillion digital economy target. While mature DPIs have witnessed exponential adoption by 2022, the next 7-8 years offer an opportunity for further scalability, reaching even the most remote segments of the population. By 2030, DPIs will significantly enhance citizens’ efficiency and promote social as well as financial inclusion.”

Future impact potential of Indian DPIs by 2030

By 2030, adoption across the matured (with successful mass adoption and larger economic impact) and budding DPIs (with successful proofs of concept and ready for mass adoption) has potential to scale and add higher economic and social impact. The economic value added by these DPIs could potentially increase to ~2.9% – 4.2% of GDP by 2030, up from 0.9% in 2022. These DPIs will pave the way for India to become an $8 trillion economy by 2030 and aid in achieving the target of a $1 trillion digital economy. The incremental value add will be largely driven by ABDM, which aims to provide better healthcare for citizens, resulting in increased labor productivity, and ONDC, which is expected to boost the country’s retail spending. Aadhaar will continue to play a significant role as its use cases expand to a broader range of services.

Opportunities and Challenges

The transformation of matured and budding DPIs through innovative technology integration such as AI, Web3, Metaverse presents significant opportunities. However, key challenges in DPI adoption include lack of interconnectedness among various stakeholders, lack of real time data availability, limited language expansion for users to access in preferred languages, and future partnerships beyond government services.

To realize the 2030 DPI potential, stakeholders must focus on key imperatives. Government agencies need to continue to give proactive policy support, regulatory clarity, and promote existing digital ecosystems by setting up task force to drive adoption and foster innovation through partnerships with corporates and startups. Startups and SMEs should build business models that capitalize on the full-scale adoption of existing digital infrastructure and experiment with new-age technologies like Gen-AI, NLP, and Web 3. Corporates and Big Tech should anticipate future digital demand, build necessary infrastructure, foster innovation through accelerator programs, and maintain a global mindset when developing solutions.