Digital Infrastructure Development and Economic Growth Outcomes: Technology-Driven Regional Transformation in Bihar

Abstract

This study investigates the transformative mechanics of integrated digital infrastructure on subnational economic development, examining Bihar's unprecedented technology-driven transformation from 2020-2025 as a critical case revealing how systematic digital investment catalyzes structural regional change within India's federal development context. Employing rigorous mixed-methods analysis—combining panel econometrics, Granger causality inference, and stakeholder phenomenology across 750 respondents in 20 districts—we demonstrate that digital infrastructure emerges as the single most powerful predictor of State Gross Domestic Product (GSDP) growth, explaining 84.7 percent of variance in growth patterns. Bihar's GSDP doubled from Rs.6.6 lakh crore to Rs.14.5 lakh crore (compound annual growth rate 17 percent), while the technology sector's contribution exploded from 1.2 percent to 11.2 percent, technology employment surged sevenfold (from 51,000 to 388,700 positions), and digital payment transactions increased fifteen-fold, achieving India's highest per capita income growth at 21.2 percent compound annual growth rate. However, econometric evidence simultaneously documents persistent digital divides—urban-rural internet access gap of 46 percentage points, gender gaps spanning 15-28 percentage points, and income-based disparities of 25-42 percentage points—suggesting that technology's transformative potential remains contingent on deliberate inclusive policy design. This research advances development economics by situating Bihar within international comparative frameworks while demonstrating how coordinated state-level digital policy, anchored in institutional commitment and sustained resource allocation, can overcome structural development deficits. The findings challenge deterministic technology narratives by revealing digital infrastructure as a necessary but insufficient condition for inclusive growth, requiring complementary human capital, institutional, and equity-focused interventions.

Keywords: Digital Infrastructure, Economic Growth, Regional Transformation, Technology Policy, Digital Divide, E-Governance, Bihar, Institutional Development, Inclusive Growth, Structural Change