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Information Technology is amongst the fastest growing sectors in India. In 1999-2000 to 2005-2006, its contribution to the GDP rose to 1.2%. the main growth of the Indian IT industry is mainly contributed by the poignancy of IT software and IT enabled services. This gives India alarming brand equity in the global markets. As such, the software and ITES exports of India grew from US$12.9 billion in 2003-04 to US$17.7 billion in 2004-05 and are estimated at US$23.4 billion during 2005-06 with an increase of 32% over the previous year.

In production and exports in India industry, Electronics and Information Technology is the fastest growing segment. Presently, the electronics industry is attracting considerable interest not only as a vast market but also as potential production base by foreign companies. Recognizing that 'software development and IT enabled services' emerging as a niche opportunity for India to the world, the government is taking all essential steps to make India, a Global Information Technology Superpower and a front-runner in the age of Information Revolution. The Government has decided that Information Technology being one of the five top priorities of the country and constituted a National Task Force on Information Technology and Software Development.

Business Process Outsourcing (ITES-BPO) sector has emerged as a key driver of the growth for the Indian software and services industry. To aid and satisfy its demands, it has become the biggest employment generator amongst college graduates. Furthermore, there are 3 million job opportunities through direct and induced employment in telecom, power, construction, facility management, IT transportation, catering and other services.

Indian companies are expanding their services so that customers can deepen their offshore engagements and shifting from low-end business processes to higher ones. They are also uplifting their global service delivery capabilities through a combination of Greenfield initiatives thus helping them to implement end-to-end delivery of new services.

Furthermore, a majority of companies have already aligned their internal processes and practices to international standards such as International Organization for Standardization (ISO); Capability Maturity Model (CMM); and Six Sigma. This has helped to establish India as a credible sourcing destination.

In order for India a front-runner in the age of information revolution, the department of Information Technology has been making numerous efforts. Some of the major initiatives include:

  • A 'National Taskforce on Information Technology and Software Development' was formed with the intention of framing a long term 'National IT policy' for the country and removing the obstructions to the growth of the InfoTech industry. The taskforce recommended various measures towards building India's IT industry and proliferating the use of IT. It submitted its suggestions in the form of reports to the Government.
  • Enactment of the Information Technology Act provides a legal framework to facilitate electronic commerce and electronic transactions; prevent computer crimes; promote electronic filing or documentation and digital signature. It hopes to construct a sanctioning environment for e-Governance and to boost e-Commerce in the country.
  • For social economic development, Community Information Centres (CICs) have been set up in the seven North East States of the region. They offer internet connectivity, e-mail facilities, interface between citizens and government, distance learning programs, information on national programmes, disaster management system, public health awareness to the public.
  • E-Governance is one of the areas in which the Information and Communication Technology (ICT) is having a profound impact on the governments function and the ways in which government services are made available to the citizens. The e-governance projects are scheduled to increase efficiency, enhance effectiveness and improve the quality of government services. Hence, National e- Governance Plan (NeGP) has create a vision to make all government services accessible, through common service delivery outlets and ensure efficiency, transparency and reliability of such services at affordable costs. Besides, a range of IT activities such as development of software applications packages, creation of e-governance infrastructure, National ID, citizen databases, smart card are being taken up on navigator scale basis.
  • State Wide Area Network (SWAN) is a plan for establishing state wide area networks across the country in 29 States and 6 Union Territories over a period of five years. The scheme ideates and provides central assistance to States and Union Territories (UT) for establishing SWAN from State and UT headquarters up to the block level with a minimum bandwidth capacity of 2 Mbps.
  • State Data Centres have been recognized as one of the important elements of the core infrastructure for supporting e-Governance initiatives under NeGP. It is expected to create data repositories or data centres in various States so that common secured data storage could be maintained to serve host of e-Governance applications.
  • Common Service Centres (CSC), one of the three infrastructure pillars of NeGP, are deemed to serve as the physical front end for delivering government and private services at the doorstep of a citizen. The government has legalized a scheme for facilitating establishment of 100,000 broadband internet enabled CSC in rural areas of the country so as to be implemented in public private partnership.
  • Unique ID for BPL families is a project launched with the intention to create a core database of all residents of the country and assign a unique ID number to all residents over 18 years of age, in order to facilitate a better targeting of government social welfare schemes and poverty mitigation initiatives.
  • E-District projects have been launched with the objective of computerising the backend workflows at the district level with proper business process reengineering (BPR); reducing the workload at the district level; ensuring fast processing of cases or grievances; and enabling better monitoring of various government schemes. It aims at getting a number of services online in a web-based mode, including applications under the Right to Information Act; applications for house sites' ration cards, transfers of teachers, inclusion in the electoral roll, filing of police complaint, issue of birth/death certificates and copies of land records. Most of these services are provided at the district level and they served as the primary interface between the government and the citizens.
  • National Informatics Centre (NIC) has been involved in steering Information and Communication Technology (ICT) applications in Government departments at Central, State and District levels. It facilitate improvement in government services; wider transparency in its functions; and improvement in decentralised planning and management. Some of the major projects undertaken by it include budget, central excise and commercial tax computerisation; computerisation project for supreme court, high courts and district courts; agricultural census and marketing; parliamentary elections data transmission and analysis; land records computerisation; and utility mapping project.

Additionally, in order to ensure that the benefits of IT reach the common man, Government has suggested a move to make available tools and fonts in various Indian languages freely to the general public. The software tools and fonts used by Indian have already been released. All of the Indian languages are expected to be translated soon.

India has a high potential to develop and manufacture Electronics and IT Hardware for the global markets. But the industry have to deal with limitations on the account of certain factors like high incidence of taxes; inadequate infrastructure; high cost of finance; transaction cost; freight and power; low volumes of production and inverted customs duty structure in some products. The Government has identified the growth of Electronics and IT Hardware manufacturing sector as a thrust area and has been providing a package of incentives for them with the goal of:

  1. Institute a globally competitive industry;
  2. Reaching more FDI into the industry;
  3. Decreasing the prices of the end products as well as the production costs
  4. Increasing volumes to get benefit from the efficiencies of scale
  5. Increasing the prerequisite of production.

The proposal for Electronics and IT Hardware Manufacturing Policy is also under consideration which aims to:

  1. reduce the tariff structure on capital goods and inputs;
  2. merge manufacturing for domestic market and exports;
  3. aid in the registration of international patents;
  4. transfer state-of-the-art technology(TOT) and
  5. Improve research and development.

As a result, India is sited among the fastest growing IT markets in the Asia-Pacific region. Global software clients such as Microsoft, Oracle and SAP have established their development centres in India.

Today, India is a perfect destination for IT Enabled Services (ITES) due to its distinct advantages which lay in its supportive government policies; infrastructural facilities; low manpower cost; growing knowledge pool; specialized technical skills; higher productivity and quality of service. The increasing attractiveness as an investment destination in IT has even led to a turnaround of the brain drain. For example, the people of Indian origin who went to pursue careers abroad are now attracted to work in India itself.

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