"Internet is a gamechanger... Common citizens (can) now directly engage in policy making process," Modi said through video-conferencing at an event organised by Internet search giant Google here called the Big Tent Summit.
He said Internet has empowered people and made communication with leaders and the government a two-way process.
Coining a new equation, Modi said 'Indian Talent' plus 'Information Technology' is equal to 'India Tomorrow'.
Earlier, politicians used to bombard people with their views but now it is not only two-way but also real time and updated, the BJP leader said.
"Citizens now have a direct say (in governance). Earlier this was limited to once in five years or from one election to another. Internet has truly empowered the citizens," Modi said in his short speech delivered in English.
Hailing new technology like 3D holographic projection which he had used recently during the Gujarat elections, the chief minister said today one can connect with the "dreams and aspirations of the people".
"It is the new town square, what we call the 'nukkad'. Citizens are netizens...This is a wired republic," Modi said, adding that technology can bring accountability, transparency and help in good governance.
Showcasing his achievements in Gujarat, the BJP leader said he uses Information and Communication Technology (ICT) to redress grievances of common man. He emphasised that these efforts were applauded by the US, which has conferred a public service award on the state.
Modi invoked futurist Alvin Toffler and said illiterates of the 21st century will be those who cannot "learn, unlearn and relearn".
"This applies even more to politicians...It (technology) is very important for a large democracy like India... Technology is a challenge to the political class," he said.
He, however, maintained that politicians "have readily adopted any new technology soon after its inception, be it microphones, motion pictures or television."
Technology has become synonymous with politics and is "fundamentally redefining" it, the BJP leader said.
Modi said his government has used modern technology in governance and implementation of policies.
Gujarat has used Geographic Information System (GIS) to map forests and allocate land for hospitals, he said, adding that it is also the first state to use GIS for watershed management.
"We have e-gram and vishwa gram programmes through which we are connected to all villages," Modi said. He claimed Gujarat used technology for dealing with disaster management due to which no life was lost during recent floods.
Gujarat, he said, is a step ahead in use of technology in elections as it has moved from use of EVMs to e-voting in municipal polls.
"Technology in itself is neither good nor bad. It all depends on how we harness it," Modi said.