Online gaming drives economic growth, boosts GST collections
Online gaming has grown into a sector of significant economic and social impact. In his post-budget interviews, CBIC Chairman Sanjay Agarwal highlighted the growth in the government’s GST revenue and emphasized the online gaming industry’s contribution to revenue collections. Since the imposition of a 28% GST on the industry, revenues from the online gaming sector have quadrupled with GST collections now averaging Rs 1,100- 1,300 crore a month.
Online gaming: a consistent performer
The sector has contributed consistently to the Indian economy over the last few years. In FY 2020-21, online gaming contributed approximately Rs 2,000 crore to the public exchequer. In February this year, Revenue Secretary Sanjay Malhotra GST collections had surged by 475% between November 2023 and January 2024 due to the industry. He further specified that the government was expecting an annual collection of almost Rs. 14,000 crores in tax revenue from the sector by 2025. Over Rs 1,080 crore in tax deducted at source (TDS) was generated by the online gaming industry in FY 2023-24 until February 2024. It can be noted that in FY23, the sector achieved a compound annual growth rate (CAGR) of 28%, reaching a market size of over Rs 16,000 crore, and is expected to surpass Rs 33,000 crores by FY28. It has attracted investments totalling Rs 22,931 crore from both foreign and domestic sources up to FY24 and is projected to add 2.5 lakh in jobs by 2025. The online real money gaming sector dominates the Indian market with over 82% of the market size of the overall gaming market.
With forward and backward linkages to industries like FinTech, Artificial Intelligence (AI), and cloud technologies, the sector’s performance has helped uplift the overall digital ecosystem in India. The growth showcased by the online gaming sector clearly underscores India’s potential to become a global gaming hub. The increasing popularity of online gaming, coupled with India’s large youth population, will help the sector continue its contribution to India’s growing economic prowess.
