This revised paper by M.R. Narayana, ISEC distinguishes the contribution of information and communication technology (ICT) sector to economic development by manufacturing and service activities in Karnataka State. Using the available data in the national and State income accounts, the contribution of manufacturing ICT industries and ICT services is estimated from 1993-94 to 2001-02.
Estimation results show that the (a) ICT services have a dominant share in the ICT sector’s contribution to national and State income, and (b) ICT sector has a positive and higher share in the State income than in India’s national income and in national income of OECD countries. Further, the paper estimates the determinants of demand for ICT use by cross section and panel data models. The results offer evidence for the positive impact of changes in per capita income, teledensity and share of tertiary sector on usage demand for ICT services in Karnataka State.