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ICT investment and economic growth in India: An industry perspective

K L Krishna, Abdul A Erumban, Bishwanath Goldar, Deb Kusum Das, Suresh Chand Aggarwal and Pilu Chandra Das
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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

No 284, Working papers from Centre for Development Economics, Delhi School of Economics

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.

Keywords: India; economic growth; information technology; ICT; organized manufacturing; industry-wise investment, aggregate economy (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cse and nep-ict
Date: 2018-03
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