The State of India’s Digital Economy Report 2023

The State of India’s Digital Economy  Report 2023

by ICRIER-Prosus Centre for Internet and Digital Economy (IPCIDE)

India has raced past its G20 peers on digital innovation; must now address the digital divide

  • Mobile broadband subscriptions increased at an annual growth rate of over 40% during 2014-21
  • Internet connectivity divides between the small and large businesses closed during the pandemic years
  • Smaller businesses aren’t leveraging digital tools as much as the larger ones: the post-pandemic gap in the use of digital tools rose to 26% for online sales, 33% for websites, 12% for online marketing and 21% for social media presence
  • 99% of the people in India have 3G mobile broadband coverage, but not all are using it
  • While the population in rural India is twice that in urban areas, the number of active internet users is about half
  • Less than a third of the women in rural India use the internet
  • Co-Win that registered over a billion users in 13 months isn’t an isolated success story; many Digital Public Infrastructure Platforms (DPIPs) are scaling up quickly
  • DPIPs are efficient but also have regulatory blind spots
  • Unless regulated well, DPIPs can create monopolies and conditions leading to exclusion of the vulnerable, worsening the digital divide

New Delhi, 24th February 2023: Shri Saurabh Garg, CEO UIDAI, today launched the ‘State of India’s Digital Economy Report (SIDE) 2023’ and inaugurated the first annual ICRIER-Prosus Centre for Internet and Digital Economy (IPCIDE) conference in New Delhi.

The day-long conference, a T20[1] side event, featured discussions on the digital economy of India and cooperative federalism, digital safety and inclusivity and the role of start-ups in promoting India’s digital economy. A T20 panel discussion on DPIPs was also held. The conference hosted an experiential session for exhibiting immersive and other emerging technologies with exhibits by ChatGPT, Parallax Labs, Dassault Systems, NEAR Foundation, and VVDN Technologies.

Releasing the SIDE report, Shri Saurabh Garg said “India’s Digital Public Infrastructure has proved to be an efficient model for delivering digital services and promoting digital inclusion. The SIDE 2023 report is well-timed; it will support the government’s endeavours for building a more robust DPI ecosystem.”

India’s G20 Sherpa, Shri Amitabh Kant, said in the keynote address: “At the G20, we are working in partnership with countries to promote digital public infrastructure to help deepen financial inclusion, improve the efficiency of service delivery and solve global challenges by leveraging technology. IPCIDE’s report provides much-needed insights into our approach, which we can build on in the future.”

IPCIDE’s flagship SIDE 2023 Report has two parts. India’s progress in the digital economy relative to G20 countries has been traced in Part One. For this, the report makes use of indicators better suited for Indian conditions rather than those that facilitate cross-country comparisons usually preferred by global ranking studies. Comparisons across the states are also included in this part.

The ‘Connect, Harness, Innovate, and Protect’ framework (CHIP) proposed in the report has been used for tracking the participation in the digital economy of three key agents, individuals, businesses and governments.

Part One of the report finds that India’s performance stands out compared to its G20 peers on the ‘innovate’ pillar that measures the development and adoption of emerging technologies. The same is also seen in the case of the ‘harness’ pillar with the impressive pace of adoption of digital technologies and digital services in the country. The ‘connect’ pillar, which is an evaluation of the universality, affordability and quality of access, shows mixed results. Despite the second largest population of digitally-connected people, India still has unacceptably high digital divides across geography, gender and income. While 97% of the total police stations in the country are now connected to the internet, the same is true for less than a quarter of government schools and just over half of government-aided schools. The weakest link in India’s digital transition is the fourth pillar, ‘protection’, which is an assessment of the susceptibility to cybercrime and privacy breaches, and requires urgent policy attention.

Sehraj Singh, India Managing Director, Prosus, said: “We set up IPCIDE to support people and organisations working at the intersection of technology, economics, and policy to accelerate solutions rooted in Indian economic realities. We hope that the SIDE 2023 report will provide unique insights to policymakers that will enable them to foster a progressive, inclusive, and sustainable digital economy in India.”

Part two contains an evaluation of the benefits and risks of five DPIPs currently in operation in India: Aadhaar, Unified Payment Interface (UPI), Ayushman Bharat Digital Mission (ABDM), Digital Infrastructure for Governance, Impact & Transformation (DIGIT), and the Account Aggregator Framework (AA). Key findings of this section are:

·      DPIPs have been successful in achieving scale, and tend to accelerate inclusion, improve efficiency, and facilitate innovation.

·      Aadhaar has led to an overall savings of INR 2 trillion (GoI) and has brought down costs of verification through eKYC, leading to savings in costs for customer acquisition from Rs. 500 – 700 per person to Rs. 3.

·      UPI is currently the cheapest alternative among available digital payment channels, but this is because of subsidies adding up to almost Rs. 1,500 crores given by the government for offsetting the mandated zero merchant discount rate (MDR).

·      The focus must shift now from technology to the other determinants of success, such as regulation and institutional design, and implementation capacity. 

·      The high levels of saturation have not eliminated the risk of exclusion in the Aadhaar-based system for authentication.

·      The current adoption of Ayushman Bharat Digital Mission (ABDM) is driven largely by the public sector in contrast to the Aadhaar enrolment, which private sector agencies largely led.

Based on these findings, IPCIDE has recommended a seven-step checklist that follows a project implementation life cycle from identification of the DPI to impact assessment.

Pramod Bhasin, Chairperson, ICRIER said: “By measuring and analysing India’s digital transformation using information that are specifically relevant to the Indian context, the SIDE report is a unique homegrown production that should be of interest to anyone trying to stay up-to-date on India’s rapidly evolving digital economy.”

Annual editions of the SIDE report will be released every year.


Media Enquiries

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Prosus: [email protected]


The ICRIER Prosus Centre for Internet and Digital Economy (IPCIDE), set up jointly by the Indian Council for Research on International Economic Relations (ICRIER), one of India’s premier economic think tanks, and Prosus, a global consumer internet group, is focused towards building policy evidence to shape the next phase of India’s digital transformation. The overarching objective of an efficient, inclusive and sustainable digital economy in India is being met through high-quality research, prominent networking events and resource banks that collectively assist in policy debate and design. It brings together stakeholders from the private sector, academia and government to develop thought leadership and enable the process of evidence-based policy-making in India. The Centre also collaborates with other institutions, both inside and outside India, to deliver high-quality research and assist policy formulation. The Centre’s activities are mentored by a group of eminent academics, policymakers and industry representatives.


Indian Council for Research on International Economic Relations (ICRIER) is one of India's premier economic think tanks with the motto of "linking India with the world." Established in 1981 with the goal of providing policy advice to effectively deal with external economic shocks, it has grown to become one of India's most well-known independent and informative policy research organisations. It is known for providing credible, candid and constructive ideas to accelerate India's inclusive development. While enjoying the trust of the governments, corporates, multilaterals and foundations as its major donors, ICRIER has served as a bridge between the academic world and the policy arena. ICRIER serves as the G20 knowledge partner for the following ministries: Finance, Commerce and Industry, Telecommunication and Energy. ICRIER's Board of Governors includes leading academicians, policymakers, and representatives from the private sector. Mr. Pramod Bhasin is ICRIER's chairperson and Dr. Deepak Mishra is Director & Chief Executive. For more information, please visit www.icrier.org.


About Prosus:

Prosus is a global consumer internet group and one of the largest technology investors in the world. Operating and investing globally in markets with long-term growth potential, Prosus builds leading consumer internet companies that empower people and enrich communities.

The group is focused on building meaningful businesses in the online classifieds, food delivery, payments and fintech, and education technology sectors in markets including India and Brazil. Through its ventures team, Prosus invests in areas including health, logistics, blockchain, and social commerce. Prosus actively seeks new opportunities to partner with exceptional entrepreneurs who are using technology to improve people’s everyday lives.

Every day, billions of customers use the products and services of companies that Prosus has invested in, acquired or built, including 99minutos,  Airmeet, Aruna, AutoTrader, Autovit.ro, Azos, BandLab, Bibit, Bilt, Biome Makers, Borneo, Brainly, BUX, BYJU'S, Bykea, Captain Fresh, Codecademy, Collective Benefits, Creditas, DappRadar, DeHaat, Detect Technologies, dott, EduMe, ElasticRun, eMAG, Endowus, Eruditus, EVERY, Facily, Flink, Foodics, Good Glamm Group, GoodHabitz, GoStudent, Honor, iFood, Imovirtual, IndiGG, Klar, Kovi, LazyPay, letgo, Luno, Mensa Brands, Meesho, merXu, Movile, Oda, OLX, Otodom, OTOMOTO, Oxford Ionics, PaySense, PayU, Pharmeasy, Platzi, Property24, Quick Ride, Red Dot Payment, Republic, Sharebite, Shipper, ShopUp, SoloLearn, SpotDraft, Stack Overflow, Standvirtual, Superside, Swiggy, Thndr, Tonik, Ula, Urban Company, Vegrow, Virgio, watchTowr, and Wayflyer.

Hundreds of millions of people have made the platforms of Prosus’s associates a part of their daily lives. For listed companies where we have an interest, please see: Tencent, Delivery Hero, Remitly, Trip.com, Udemy, Skillsoft, and SimilarWeb.

Today, Prosus companies and associates help improve the lives of more than two billion people around the world.

Prosus has a primary listing on Euronext Amsterdam (AEX:PRX) and secondary listings on the Johannesburg Stock Exchange (XJSE:PRX) and a2X Markets (PRX.AJ). Prosus is majority-owned by Naspers.

For more information, please visit www.prosus.com.

About Prosus

Prosus is a global consumer internet group and one of the largest technology investors in the world. Operating and investing globally in markets with long-term growth potential, Prosus builds leading consumer internet companies that empower people and enrich communities.

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