‘Digital and physical infrastructure with skills will drive India’s economic growth’
S. Krishnan, Union IT Secretary, says with its accelerated growth, the digital economy is expected account for 20% of the Indian economy by the year 2030
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Context
S. Krishnan, Secretary of the Union Ministry of Electronics and Information Technology (MeitY), stated that a combination of digital infrastructure, physical infrastructure, and skilled manpower is crucial for India to become the world's third-largest economy by 2030. Speaking at a university event, he highlighted the goal for the digital economy to constitute 20% of India's GDP by 2030, a significant increase from 12% in 2021-22. The statement underscores the government's strategic focus on high-tech manufacturing and skill development as key drivers of future economic growth.
UPSC Perspectives
Economic
The statement aligns with India's ambitious economic targets, including becoming the world's third-largest economy by 2027-28 and reaching a $30-35 trillion economy by 2047. The core of this strategy is boosting the manufacturing sector's contribution to GDP, particularly in high-value areas like electronics. To overcome a historical manufacturing disability of 8-11% due to infrastructural and logistical gaps, the government launched the 'Make in India' initiative and supporting policies. A key pillar is the Production Linked Incentive (PLI) scheme, which offers financial incentives of 4-6% on incremental sales of domestically manufactured electronic goods, including mobile phones and components. This scheme, part of the broader National Policy on Electronics 2019 (NPE 2019), aims to position India as a global hub for Electronics System Design and Manufacturing (ESDM) and targets a turnover of $400 billion in the sector by 2025. The emphasis on electronics exports is crucial for managing the trade deficit and integrating India into global value chains, moving beyond simple import substitution.
Governance & S&T
The government's vision is operationalized through specific missions and institutional frameworks under . The India Semiconductor Mission (ISM), with an outlay of ₹76,000 crore ($10 billion), is a prime example. Its objective is to build a vibrant semiconductor and display manufacturing ecosystem to reduce dependence on imports and establish self-reliance (Atmanirbhar Bharat). The acts as a nodal agency to facilitate the setup of fabrication plants, promote R&D, and foster international collaborations. This initiative complements the PLI scheme by focusing on the most critical and capital-intensive part of the electronics value chain. Furthermore, the growth of the digital economy, projected to reach 20% of GDP, is being propelled by the government's push for Digital Public Infrastructure (DPI). The government's role has shifted from being a mere regulator to an active enabler, creating policies and infrastructure to attract private investment and build domestic capacity in strategic sectors.
Social & Skill Development
Achieving manufacturing excellence is impossible without a skilled workforce. The article's focus on MoUs for capacity building highlights the critical 'skills' component of the growth trilogy. The government's flagship scheme, the Pradhan Mantri Kaushal Vikas Yojana (PMKVY), is central to this effort. Now in its fourth iteration (), the scheme aims to provide industry-relevant skill training to youth, including new-age courses in AI, robotics, and coding, to meet the demands of Industry 4.0. It operates on a demand-driven model, offering short-term training and recognizing prior learning to make the workforce more employable. The collaboration between academic institutions like SASTRA, private companies (Tata, Bajaj), and the government exemplifies the Public-Private Partnership (PPP) model in skill development. This synergy is essential to bridge the gap between academic curricula and industry requirements, ensuring that the 'demographic dividend' does not become a 'demographic disaster'. Initiatives like the Bajaj Engineering Skills Training (BEST) centre are micro-level implementations of this national policy.