10% Hike in Investment in Telecom May Add 3.3% to GDP: Report

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As envisioned in National Digital Communications Policy 2018, the investment of US$ 100 billion in telecom industry would lead to an increase of US$ 1.21 trillion in GDP

A hike of 10 per cent in investments in India’s telecommunication sector may result in an increase of around 3.3 per cent in the country’s gross domestic product (GDP), on an average, according to a report.

As envisioned in the National Digital Communications Policy 2018 (NDCP), the investment of US$ 100 billion in the country’s telecom industry would lead to an increase of US$ 1.21 trillion in the GDP on a cumulative basis, said a joint report by Indian Council for Research on International Economic Relations (ICRIER) and Broadband India Forum (BIF). Presently, India’s economy is estimated to be US$ 2.5 trillion.

Multiplier effect

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“The multiplier effect of investment in telecom sector suggests that the US$ 100 billion investment proposed in the NDCP policy could cumulatively add around US$ 1.21 trillion (approximately Rs 78.9 lakh crore) to the country’s GDP over the duration of the planned investment,” said the report.

“These are major impacts and still it could be underestimated taken into consideration that internet penetration is still below compared to global levels,” it added.

Exponential benefits to GDP

Speaking at the report launch, Aruna Sundararajan, Secretary, Department of Telecommunications (DoT) said, “While the first wave of mobile revolution heralded a new age of growth and dynamism to the economy, the second wave is now being led by the growth of internet subscribers and investments in telecommunication infrastructure, leading to exponential benefits to the economic and GDP growth.”

Sundararajan further said that therefore, it is crucial for states across the country to use it to ensure larger direct and spill-over benefits.

This is the right time for policy makers to involve in serious discussions on how to enable investments of US$ 100 billion in digital communications infrastructure, she added.

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