Report By Harvard Business School Affiliate Says Jio’s Entry Will Expand India’s GDP By 5.65 Per Cent

A report by the Gurgaon-based Institute for Competitiveness – an associate of the Institute for Strategy and Competitiveness at the Harvard Business School – has said that Reliance Jio Infocomm’s disruptive entry in 2016 will boost India’s gross domestic product (GDP) per capita by 5.65 per cent, reports PTI.

The report says that the tariff war sparked by Jio’s entry saw data prices in India drop from Rs 152 per GB to Rs 10 per GB, thus bringing a huge section of India’s population under the internet connectivity umbrella.

It goes on to detail that due to the steep drop in tariffs, the annual financial savings would go up by $10 billion, and then went on to cite econometric analysis that put the country’s GDP per capita growth at 5.65 per cent, subject to other factors in the economy being constant.

Data from 18 states from 2004-2014 showed that an increase in internet penetration by 10 per cent saw a GDP growth of 3.9 per cent. GDP growth due to telecom penetration is a contribution of both the telecom sector and other externalities in the internet economy, it said.