Rural India: The Catalyst of the Booming Indian Digital Economy

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Data has undoubtedly become the lifeblood for commercial and governance activities in the 21st century. And with a burgeoning youth population and an estimated 60% being rural, the rise of a data-dominated digital economy is inevitable.

The contribution of rural India has been profound. Approximately two-thirds of the population in the country still belongs to the rural areas. If we crunch some more numbers, there were as many as 574 million monthly active internet users in the country by the end of 2019, which is expected to grow by 11% in 2020. Interestingly, nearly half of this internet population resides in rural areas. And, that’s why all eyes are set on internet users in rural India.

Let’s dig deep to understand, how rural India, amid the changed equations due to Coronavirus outbreak, will emerge as the catalyst of the booming digital economy of India.


Internet Users In India: 634 Million In 2020

According to the latest report from Kantar IMRB, there would be an estimated 20% YoY growth in the number of monthly active internet users in rural India in 2020. It means the user count will be increased to an estimated 304 million by the end of 2020 – nearly half of the total internet users in India estimated by the year-end.

Primarily driven by the growth in rural India, the total number of internet users in India would reach an estimated 634 million by the end of 2020.

The findings are based on the survey of about 75,000 respondents across 390 cities and about 1,300 villages between May and August last year.

To start off, if one uses the internet at least once in 30 days, he or she is tagged as a monthly active internet user in industry terminology. India, coming off a low base, is the second-fastest digital adopter among 17 major digital economies.

Going further, the report suggested that the urban internet population has also grown at a rate of 11% in recent times. From the total data, people belong to the age group of 15 years and below accounted for 38% of the demographic.


Digital India initiatives, removal of language barriers, easy accessibility, e-commerce activities permeating socio-economic layers are some of the key enablers which have influenced this heavy shift. Not to mention, entertainment and communication sectors, which not only keep adding consumers by the hordes, but have also changed the way people and brands interact with each other.

Looking back, over the years, the buying capacity of rural Indians has taken a sharp upward turn. Rural India is expected to leapfrog urban India and constitute nearly half of all Indian internet users by 2020.

Internet users in India: Rural India the real catalyst

It’s is no hidden fact that Millenials play a crucial role in the growth of the digital economy in every country, and India is no exception. Nearly 67% of the millennial population of In India stay in rural areas, which spent approximately $220 billion annually.

At present, with the COVID-19 crisis we now find ourselves in, the digital consumption of internet users, both rural and urban alike, has seen a steep rise. Indoor services are expected to see a spike in both areas as the user behaviour continues to evolve over this tricky period. With schools and colleges suspended all over the country, students from rural communities have gravitated towards digital platforms for their education. Be it lectures through video conferencing, distribution of notes and assignments through WhatsApp and Google Classroom, or registering for courses and internships on various portals, all this has served to add to the digital economy.

Following their favourite stars on social media platforms have also added heaps to the mix. The increasing consumption of video and social media content in rural areas is indicating the changing behaviour of internet users who are getting acquainted with a lot many new opportunities like eAgritech, B2B eCommerce and a lot more.

Rural India has also awakened to the possibilities of telemedicine and health care, making the profession an emerging part of this economy.

Interestingly, it’s the combination of local languages and video content that is driving the growth of internet users in rural areas. And, this eventually opening doors for a lot many new opportunities for companies as well as people staying in remote areas, which were completely neglected by companies so far.

It is estimated that the emergence of technology and the fast adoption of the internet will create over 2.8 million jobs in rural areas by 2029.

The outbreak has caused services like online gaming, ed-tech and groceries to deal with an unprecedented demand, which is likely to continue due to lockdowns and social distancing measures. Digitization has been instrumental in facilitating some of the key needs of rural India including e-governance services, banking and financial services, and mobile/DTH recharge, e-ticketing services, online shopping, etc.

This rural awakening is also creating fresh opportunities for rural entrepreneurship, wherein the rural youth are seen providing digital services to their brethren, ensuring quicker adoption of such services.

Taking a look at the staggering data about the rural consumers in the nation, it is certain that they are significant in number and their needs need to be catered to. The consumer base of rural India is like fertile land, rife with opportunities and endless possibilities. With resources still untapped, the potential for the growth of the digital economy is enormous. Stay tuned to this space for more developments.


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