DIGITAL PAYMENT GROWTH AND ECONOMIC GROWTH IN INDIA: AN EMPIRICAL ANALYSIS

Abstract

Digital payments have become an important part of Indias financial system, with significant growth in the volume of digital transactions over the years. The present study examines the growth of digital payment volume and its relationship with economic growth in India using secondary data for the period 2011-12 to 2025-26. The study uses digital payment volume and real GDP growth as the major variables. Annual growth rates are calculated to examine the growth pattern of digital payments. Pearsons correlation is used to examine the relationship between digital payment volume and economic growth, while a One-Sample t-test is applied to assess the significance of annual growth in digital payment volume. The findings show that digital payment volume grew substantially and significantly, with an average annual growth rate of 47.84%. However, the Pearson correlation coefficient of 0.142 with a p-value of 0.615 indicates that the relationship between digital payment volume and real GDP growth is not statistically significant. The study concludes that although digital payments have expanded considerably in India, their growth alone does not establish a significant statistical relationship with overall economic growth. The study highlights the continuing importance of digital payment development while recognising that several other economic and structural factors influence economic growth.