A loss of $3 billion to Indian economy due to the internet shutdown from 2012-2017

By:Vandita Jadeja 2018-04-30

A study by ICRIER mentioned that the Indian economy has suffered a loss of an estimated $3 billion caused due to the Internet shutdown in the country from 2012 to 2017. This study observed the impact of the Internet slowdown on various devices and the ecosystems linked to them. A number of businesses are heavily dependent on the internet and even a slowdown has a huge impact on the economy. With a complete internet shutdown, the economy had to suffer substantial amount of losses.

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ICRIER director, Rajat Kathuria stated that a total of 16.315 hours of Internet shutdown in the country cost about $3.04 billion in the stated period of five years. He shared details of the report on Anatomy of an Internet Blackout: Measuring the Economic Impact of Internet Shutdowns in India.

Based on the report, about 12,615 hours of mobile Internet shutdown in the country cost the economy approximately $2.37 billion and 3,700 hours of mobile and fixed line Internet shutdown in the country led to a loss of approximately $678.4 million in the period of 2012 to 2017.  The objective behind the study was to estimate the economic cost associated with an internet shutdown. These costs should be considered by the policy makers in order to make a well informed decision. This loss could significantly increase in the future.

Freelancers and E-commerce businesses that operate from small towns are heavily dependent on Internet and are most affected by the shutdowns. Other sectors like tourism and retail are becoming increasingly dependent on the Internet and are affected by the shutdown. Since banking and IT services function on private leased lines, they are slightly less affected as compared to other sectors.  The report throws light on the increased dependency on Internet services by various businesses and professionals. The decreasing cost of internet across the country has made it possible for individuals to gain access and use it with ease. In a move towards digital economy, the policy makers need to consider the concerns related to internet shutdown which affects the economy.

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