Internet-based apps contributed Rs 1.4 lakh cr to GDP in 2015-16: Study

The joint study by ICRIER and Broadband India Forum said India's internet traffic increased by 10%

Internet-based applications have contributed Rs 1.4 lakh crore to the country's GDP in 2015-16, a report by the think-tank organisation, ICRIER. along with the Broadband India Forum said.

As per the study, a 10 per cent increase in India's total Internet traffic, delivers an average increase of 3.3 per cent to India's GDP.  Whereas a 10 per cent increase in mobile Internet traffic delivers an average increase of 1.3 per cent to the country's GDP.

A 17 per cent increase in India's Internet traffic during the period 2015-16, resulted in an absolute increase of $103.9 billion (Rs 10,390 crore) in GDP during the year. Applications contributed a minimum of $20.4 billion (Rs 2,040 crore) in the year 2015-16 to India's GDP. "The Internet economy could contribute up to $537.4 billion to India's GDP in 2020, of which a minimum of $270.9 billion (Rs 27,090 crore) could be attributed to apps," the study said.

Companies covered in the study include Makemytrip, Practo, PayTM, Urbanclap, Netflix, Wynk, Byju's, Truecaller, farMart and MP Mobile. The case studies captured different aspects of impact created, such as the potential for increased income and job creation, government services, lowering costs for buyers and sellers, creating a platform for smaller businesses, popularising the use of vernacular language and enabling women safety among others.

Apps have evolved from being offline, and locked-in to devices, to being connected online and available across different operating system platforms. This disruptive innovation resulted in what is commonly referred to as the 'app economy'.

India now tops the chart in Google Play downloads when compared to Indonesia, Russia, Brazil and USA. The top downloaded apps from Google's Playstore by Indian users are Whatsapp and Facebook Messenger. Indigenous entertainment apps such as Hotstar and Jio TV have also climbed the charts as popular apps among Indians.

The evolution of apps had regulators of legacy services such as telecommunications, cable and broadcast, commercial public transport among others scrambling to manage the disruption.

"We found that the ecosystem's contribution went beyond just economic into social areas such as mainstreaming the differently abled and enabling women safety among others," said Rajat Kathuria, Director and Chief Executive, ICRIER.

The growth of the app economy in India has been impressive. App Annie, an app-analytics company, recently ranked India as the fourth largest app economy in the world, with annual app downloads to touch 7.7 billion by the end of 2017.

"Internet apps and services are disrupting traditional industries. Regulation, globally, is evolving to strike the right balance between protecting consumer/business interests and encouraging the ecosystem to innovate further," said TV Ramachandran, President, Broadband India Forum.