India's $30 trillion dream: Digital economy and rural telecom hold the key

Viksit Bharat by 2047 requires bridging rural telecom gaps and boosting digital growth

The year 2025 has begun with a renewed promise for Viksit Bharat, with Prime Minister Narendra Modi telling the people of India that the government would work even harder to achieve the objective of a $30 trillion economy by 2047. However, transforming India into a developed nation by the 100th year of Independence would mean many bright spots for the country along the way, well before the target year — which is still 22 years away.

 

Among other sectors, the digital economy, which is growing at a fast clip, should play a critical role in the Viksit Bharat journey. Estimated at around $175 billion in 2023, India’s digital economy could grow to $1 trillion in three years, projections suggest. According to published data, the digital economy, which accounted for 4.5 per cent of the country’s gross domestic product (GDP) in 2014, is expected to account for 20 per cent of GDP by 2026.  

 

With the digital economy leapfrogging, current realities — such as the popularity of UPI transactions, the quick commerce wave, the rise in unicorns, innovations using 5G and 6G technologies, and advancements in artificial intelligence — could grow exponentially. For all this to happen, however, the core communication network and mobile subscriber numbers in rural areas have to strengthen significantly.

 

The digital divide between urban and rural parts of India in the telecom universe has narrowed over the years, but there’s a long way to go. As reported in this newspaper, NITI Aayog Chief Executive Officer BVR Subrahmanyam recently said that an alternative perspective on India’s ambitions to grow tenfold and become a $30 trillion economy by 2047 is that 90 per cent of the country is yet to be built. Similarly, about half of rural India still does not have access to any telecom service for a variety of reasons, leaving that much room for growth. It’s this growth that will eventually drive not just the digital economy, but also the Viksit Bharat dreams.

 

The latest figures from the Telecom Regulatory Authority of India (Trai) show rural telephony subscriber numbers moving closer to those in urban India. While urban subscribers stood at 660.42 million as of October 2024, rural numbers were at 527.79 million. In wireless, the gap is even lower — urban at 625.56 million and rural at 524.86 million. But teledensity, which describes the number of telephone connections per 100 persons in a given area, reveals the real picture of the urban-rural divide. Urban teledensity is pegged at 131.31, while rural is at 58.39.     

 

Going back by about a decade, in August 2014, urban teledensity was higher than it is now at 147.54, compared to a considerably lower rural teledensity of 44.67. In absolute terms, the divide between urban and rural was reflected in these numbers—urban telephony subscribers at 566.60 million and rural at 385.25 million, while urban wireless was at 544.69 million and rural wireless at 379.63 million.

 

The teledensity in the intervening years has moved something like this. In October 2016, urban teledensity was recorded at 160.50, while rural was at 52.43. The following year, in 2017, around the same time, both urban and rural teledensity moved up to 172.98 and 57.73, respectively. Reliance Jio launched its service in December 2015, and the low tariffs disrupted the market, leading to an upward trend in teledensity, including in rural areas.

 

By June 2019, a few months before Covid-19 hit the world, teledensity had begun to taper down. Around this time, the deep discounts in telecom tariffs were getting rationalised. Urban teledensity at this point was 160.78, against 56.99 in rural areas. Following the lockdown in India, there was a noticeable decline in urban subscribers, but rural areas saw no such dip. By June 2020, urban teledensity had dropped to 137.35 (down from 160.78 the previous year), while rural teledensity had risen to 58.96 (up from 56.99 the previous year).

 

As for the urban-rural divide in internet connectivity, total subscribers increased from 251.59 million in March 2014 to 954.40 million in March 2024, according to a government statement last year. The statement had said that, as of April 2024, 95.15 per cent villages had access to the internet, with 3G/4G mobile connectivity. This would likely have been shared access, rather than individual subscription, based on the numbers given here.

 

Even with several flagship schemes of the government such as Digital India and Startup India, policymakers should understand the needs of both the industry and the end users to make a real difference on the ground. For the Viksit Bharat goal to be realised, rural teledensity needs to increase along with other infrastructure and socio-economic measures. For this to happen, many silos will need to be broken—whether it’s for satellite telecom to take off, the unicorn universe to flourish, or quick commerce to expand.