India's digital economy poised to make up 1/5th of GDP by 2026: RBI

New Delhi: India's digital economy is expected to make up a fifth of GDP by 2026, up from the current one-tenth, according to a Reserve Bank report released on Monday.

In the foreword of the 'Report on Currency and Finance (RCF) for the year 2023-24', Reserve Bank Governor Shaktikanta Das highlighted that digitalisation in finance is paving the way for next-generation banking and improving access to financial services at an affordable cost.

India is leading the digital revolution, the report stated. The country has not only adopted financial technology by accelerating digital payments but has also embraced India Stack, which includes biometric identification, the Unified Payments Interface (UPI), mobile connectivity, digital lockers, and consent-based data sharing.

The digital revolution is enhancing banking infrastructure and public finance management systems, covering both direct benefit transfers and tax collections, the report said. Vibrant e-markets are emerging and expanding their reach. "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 said.

Several factors have come together to drive this revolution. Internet penetration in India reached 55 per cent in 2023, with the internet user base growing by 199 million over the past three years. India's cost per gigabyte of data is the lowest globally, averaging Rs 13.32 (USD 0.16) per GB. The country also has one of the highest mobile data consumption rates in the world, with an average per-user per-month consumption of 24.1 GB in 2023.