FE Editorial : Broadening the band
The Financial Express: Dec 21 2012, 01:33 IST
The fact that India is currently home to the third-largest population of internet users and is set to become the second-largest by 2015 is more a factor of our sheer population size than any great effort to increase internet penetration in the country. The 120 million internet users in India constitute just 10% of our population, compared to the 250 million internet users in the US who make up 81% of that country’s population, and the 486 million users in China who form 36% of its population, according to a McKinsey report. By 2015, the report predicts, India’s internet users will number 330-370 million, and the internet will contribute 2.8-3.3% to India’s GDP, up from the 1.6% at present. The benefits of increased internet penetration have been analysed before, notably by Rajat Kathuria and Mansi Kedia Jaju in a paper that said that every 10% increase in internet penetration would add 1 percentage point to GDP, and another paper by Kathuria and Mahesh Uppal that said Indian states can increase their growth rates by 1.2 percentage points for every 10% increase in the mobile penetration rate. This is particularly of interest because, as the McKinsey report mentions, India is following a relatively unique path of leapfrogging past fixed-line broadband internet straight to mobile broadband. By 2015, the report says, users who access the internet only through mobiles or tablets will constitute around 75% of new users and 55% of the aggregate user base. So, if the focus on internet has
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