India is at the forefront of the digital revolution, Reserve Bank Deputy Governor Michael Debabrata Patra said on Wednesday, adding that financial technology (FinTech) is speeding up digital payments. The India Stack is expanding financial inclusion, galvanising banking infrastructure and public finance management systems covering both direct benefit transfers and tax collections. Vibrant e-markets are springing up and expanding their reach. It is estimated that the digital economy currently accounts for a tenth of Indias GDP; going by growth rates observed over the past decade, it is poised to constitute a fifth of GDP by 2026.
In the address, Patra said that India is uniquely positioned to unlock new growth avenues and optimise existing ones with its digital public infrastructure (DPI), a vibrant information technology (IT) sector and a burgeoning youth population, including one of the largest AI talent bases. Forecasts suggest that Generative AI will contribute $359-438 billion to Indias GDP by 2029-30. Indian firms' integration of AI into production processes has increased from 8 percent in 2023 to 25 percent in 2024. India has also committed Rs. 1.25 trillion towards its semiconductor industry development. Yet, new technologies also involve challenges: disruptions in respect of traditional technologies and the labour market; resource-intensity - demanding substantial investment in technology, learning, and infrastructure; potential cyber threats and data breaches; ethical concerns, data privacy and potential malicious use, he added.
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