States with higher internet penetration can be expected to grow faster, and by 1.08 per cent for every 10 per cent increase in the number of internet subscribers. So, if Bihar had half as many internet subscribers as in Punjab, it would have resulted in an increased growth of over 7 per cent in the State per capita income.
Similarly, States with higher penetration rates show a greater growth. Developed States (having higher per capita income and level of internet penetration) will grow at 2.36 per cent for every 10 per cent increase in the number of internet subscribers, a study has said.
Given the low internet penetration levels in India, it is not surprising to find a lower growth dividend for internet than for mobile (1.08 versus 1.5). Increased internet penetration will add significantly to State-level growth demonstrated by the growth impacts seen for the relatively developed States, according to India: The Impact of Internet, a study done by the Indian Council for Research and International Economic Relations (ICRIER) sponsored by the Internet and Mobile Association of India (IAMAI) and the Department of Information Technology.
Pointing out that internet and broadband are expected to make significant contribution to economic and social development in the country over the next 5 years, the study estimates that slow movement of coverage had cost India over $100 billion in its gross domestic product (GDP) over the past decade. New internet users in India will log on mostly via their mobile phones. Of the 723.28 million access lines, more than 95 per cent are mobile, while fixed access is, in fact, declining. Mobile internet will also be cheaper and more convenient than any other option.
Releasing the report, R. Chandrasekhar, Secretary, Department of Telecommunications said after mobile telephony, broadband was the next revolution India awaited.