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ICT investment and economic growth in India: An industry perspective

Author

Listed:
  • K L Krishna

    (Centre for Development Economics, Delhi School of Economics)

  • Abdul A Erumban

    (The Conference Board and University of Groningen)

  • Bishwanath Goldar

    (Former Professor, Institute of Economic Growth, Delhi, India)

  • Deb Kusum Das

    (Ramjas College, University of Delhi, India)

  • Suresh Chand Aggarwal

    (Former Professor, Department of Business Economics, University of Delhi, South Campus, India)

  • Pilu Chandra Das

    (Kidderpore College, University of Calcutta)

Abstract

The role of information and communication technologies (ICT) in driving economic growth has been well established in the literature. By reducing communication and transaction costs, and improving the quality of capital, ICT helps firms improve their productivity and growth. Given her linguistic and engineering skills, India has been pioneering in ICT exports, in particular export of software services since the 1990s. However, there is hardly any attempt to understand how Indian industries have been taking advantage of the massive growth potential of ICT use in their production process, looking into the experiences of different industries. This has been primarily constrained by lack of adequate, disaggregated data on the ICT use by industries. While there are a few studies trying to understand the contribution of ICT to aggregate economic growth, almost no study has attempted to unearth the role of ICT at detailed industry level. This paper is a first attempt to construct ICT investment series for the registered or organized segment of manufacturing industries in India, and one of the first few attempts that have made so far to build such ICT series for the aggregate Indian economy. The study extends the capital asset database in India KLEMS to include ICT investment, i.e. investment in hardware, software and communication equipment, in respect of different manufacturing industries. The paper also provides preliminary estimates of the contribution of ICT capital to growth in aggregate economy and registered manufacturing sector.

Suggested Citation

  • K L Krishna & Abdul A Erumban & Bishwanath Goldar & Deb Kusum Das & Suresh Chand Aggarwal & Pilu Chandra Das, 2018. "ICT investment and economic growth in India: An industry perspective," Working papers 284, Centre for Development Economics, Delhi School of Economics.
    • Handle: RePEc:cde:cdewps:284
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    References listed on IDEAS

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    Cited by:

    1. Sugandha Huria & Kriti Sharma & Neha Jain & Ashley Jose, 2022. "Digitalization and Exports: A case of Indian Manufacturing MSMEs," Working Papers 2261, Indian Institute of Foreign Trade.
    2. Jayanti Behera & Dukhabandhu Sahoo, 2022. "Asymmetric relationships between information and communication technology (ICT), globalization, and human development in India: evidence from non-linear ARDL analysis," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 11(1), pages 1-25, December.
    3. Khanna, Rupika & Sharma, Chandan, 2018. "Testing the effect of investments in IT and R&D on labour productivity: New method and evidence for Indian firms," Economics Letters, Elsevier, vol. 173(C), pages 30-34.

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    Keywords

    India; economic growth; information technology; ICT; organized manufacturing; industry-wise investment; aggregate economy;
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