Advancing Infrastructure and Digital Transformation in India

Advancing Infrastructure and Digital Transformation in India

Published on :- June 6th, 2023

The remarkable progress of India's infrastructure in recent years is a testament to the country's substantial growth. Roads, banks, digital platforms, telecommunications, and internet services form the infrastructure that can boost India’s growth trajectory. Notably, there has been a strong focus on enhancing the network of National Highways across the country. India’s goal for SDG 9 is to build resilient infrastructure, promote inclusive and sustainable industrialisation and foster innovation which are crucial drivers of economic growth and development.

Over the last seven decades, India’s National Highways have grown 6.3 times from 19.8K National highways in 1951 to 144K in 2023. In 1951, only 0.006 km of the road was available per square km of the total geographic area. In 2023, this is 0.044 - a 6-fold increase!

Digitalization trends

Similar growth trends are seen in the nation's internet density. During the period 2016-21, there has been a significant increase in the internet density across both urban and rural populations. While the Internet density among the urban population increased by ~51%, it surged nearly threefold among the rural population.

In 2016, the average difference in internet access between rural and urban population was 56 people. However, by 2021, this gap has widened, with 67 more people in urban areas having internet access than in rural areas.

Penetration and increase in internet usage can also be attributed to the increasing accessibility and affordability of internet service. The average cost per GB of wireless data has decreased from ₹269 in 2014 to ₹10 in 2021. The average cost per GB has further reduced by a rupee from 2020 to 2021. Consequently, data consumption has increased more than 100 folds in the last 8 years!

This increase in accessibility and affordability has also led to widespread use of digital banking has also meant that people have gained access to digital banking. As a result, both the value and volume of transactions have increased significantly since 2015-16. In 2021-22, the value of transactions was at its highest ~ 1,74,414 thousand crores – a whopping 89% increase since 2015-16. Additionally, the volume of digital payment transactions has increased more than 12 folds since 2015-16.

The impact of COVID-19 was evident in the transaction value during FY 2020-21. While the volume of transactions increased, the overall value dipped by ~13% compared to the previous year’s value.

Digital payments, facilitated by UPI (Unified Payment Interface) and NETC (National Electronic Toll Collection), have simplified digital payments nationwide. While the value per transaction was high upon the introduction of digital payments, due to the increasing volume of transactions, the value per transaction has been either declining or remaining relatively constant for both UPI and NETC over the last couple of years.

As of April 2023, the value per transaction on UPI stands at ₹1597, compared to ₹1512 in April 2020. During the same period, NETC's value per transaction was ₹169 against ₹241 in April 2020.

Role of MSMEs and Startups

MSMEs continue to play a significant role in India’s economy. As per data from the Ministry of Micro, Small, and Medium Enterprises, over the last six years, MSMEs have consistently contributed around 50% of India’s total exports, which has remained stable since 2015 till date

According to the Department for Promotion of Industry and Internal Trade (DPIIT), the startup ecosystem in India is also witnessing remarkable growth. Since the inception of the ‘Startup India Initiative’, till date approximately 92,683 startups have been recognised by DPIIT. In FY 2022-23 alone, 26,542 new startups were recognised. The IT services sector holds the largest share of startups (~12%), closely followed by Healthcare & Lifesciences (9.38%).

Overall, improved infrastructure is helping development spread across the country, with people in rural India gaining access to resources they previously lacked. Similarly, sustainable industries. Investments in scientific research and innovation, streamlining industrial processes are some of the factors enabling India to progress towards its SDG 9 goals.

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