India has one of the lowest per capita consumption of most goods and services amongst developing economies. Telecom is the only sector where penetration is moving at a fast pace and has touched 60% so far. Bank accounts too have reached just half of India's population. It is even worse in the case of internet, where the figure is as low as 5%.

The causes of low e-savvyness are not difficult to find. Two thirds of India's population that resides in rural areas is increasingly getting familiar to mobile phones. But unfortunately, 84% of them are yet to get introduced to the internet. Infact, not just rural, but also a large section of urban Indians have few means of accessing the internet. Only 4% of Indians owned personal computers in 2009 as against 20% in China. One, computers are yet unaffordable to most low income families. Two, poor wireless connections have been a key dampener. But that does not mean internet has not proven its worth to Indian businesses. Firms offering online travel bookings, recruitment and retail have seen their sales soar in the past decade. Further they are together expected to lock in sales to the tune of US$ 7.5 bn by 2014.

As per the World Bank, the payoffs of higher internet penetration could be exemplary. It states that every 0.1% increase in internet penetration could add 1.38% of the per capita GDP in developing economies like India. The rationale for more Indians clicking on to the world wide web is thus well laid out. However, the pace of growth would be crucial. Only then would Indian companies eyeing a larger pie of the rural market be able to leapfrog their growth targets.
BY: J MULRAJ