Electronics and Information Technology is the fastest growing segment of Indian industry both in terms of production and exports. Today, the electronics industry is completely delicensed with the exception of aerospace and defence electronics, and alongwith the liberalization in foreign investment and export-import policies of the entire economy, this sector is attracting considerable interest not only as a vast market but also as potential production base by international companies.
In recent times, ‘software development and IT enabled services’ have emerged as a niche opportunity for India in the global context. The Government is taking all necessary steps to make India, a Global Information Technology Superpower and a front-runner in the age of Information Revolution. The Government has announced promotion of Information Technology as one of the five top priorities of the country and constituted a National Task Force on Information Technology and Software Development.
The Indian Prime Minister has given a call to make India an Information Technology superpower and one of the largest generators and exporters of software in the world within ten years. As an initiating step, a high powered National Task Force on IT and Software Development was set up by the Prime Minister’s Office, under the Chairmanship of the Deputy Chairman of Planning Commission. This taskforce has mandate to formulate the draft of a National Informatics Policy.
A special website was created to act as a forum for receiving suggestions, analyzing them and hosting them back on the Website as a structured and classified digest of suggestions from IT Professionals in India and abroad.
In 2001-02 the share of Indian electronics and software industry is less than 1% of the world market. This industry contributes about 1% towards GDP of the country. The IT ministry has set up a target of US $50 billion for software exports and US$ 10 billion for hardware export by the year 2008. Ministry of Information Technology will take a lead role and serve as a nodal point for facilitating the initiatives required in the country to achieve the targets.
The satellite WAN, using VSAT technology, has facilitated reliable and quick access from remote areas. The VSAT network acts as an overlay for the terrestrial WAN by providing backup links between the backbone sites. International connectivity is achieved through gateways at New Delhi, Bombay, Bangalore, Hyderabad, Chennai and Calcutta. The overall production base of the Indian Electronics industry is widely distributed. There are more than 3500 units engaged in Electronics production which include 13 central public sector units with 29 manufacturing establishments, over 65 units in state public sector, about 600 units in organized private sector and more than 2800 units in the small scale sector.
The IT taskforce has planned to increase the PC penetration from the present level of 3.43 per thousand to 20 per thousand by the year 2008. India has achieved the capability of designing and building supercomputers using massively parallel processing technology to address national requirements in science and engineering applications, mission critical applications and business computing. Centre for Development of Advanced Computing (C-DAC) has released its latest model—the PARAM 10000, having a peak computing power in excess of 100,000 million floating point operations per second (MFLOPs). This system is now housed in the National PARAM Supercomputing Facility (NPSF) which is being offered for nation wide use to compute intensive applications and research.
There are several reasons that contribute for the highly skilled work force in India. The education system has traditionally placed great emphasis on mathematics and science, resulting in large pool of science and engineering graduates. Mastery over quantitative concepts coupled with English proficiency has resulted in a skill set that is ideally suited for the IT industry. Indian universities are pumping out 135,00 engineering graduates every year. However even with these large figures McKinsey & Co and NASSCOM predicts a shortfall of IT workers in India. This is due to the fact that the country faces a severe brain drain with most of its IT skilled workers opting to move overseas for better pay & living conditions.
Even though the salary of IT skilled workers has increased over 23% in the last three years in India, there is a crave to earn more and to work in more intellectually stimulating work places abroad. Experienced IT workers earn an average of US $ 20,000 which is approximately one fourth of their counterparts in the US. Nearly 70% of India’s technology industry is concentrated in software services sector. India’s abundant skilled manpower is drawing corporate hubs to back end their operations in India.
The segments that are likely to see tremendous growth in India include back office operations, remote education, data search, market research and customer interaction services. India due to its geostrategic location is in a position to offer 24×7 service and reduction in turnaround times by leveraging time zone differences. The Indian government is also offering special incentives for call centers and medical transcription facilities that are being set up in India. As per Nasscom-Mckinsey report, the IT industry with current capabilities can attain revenues of US $17 billion by 2008 thereby capturing 12% of the market.
To promote and boost software industry in India, the Indian government formulated Software technology Parks. A suitable framework was formulated covering licensing processes and providing the top quality IT infrastructure in a cost effective manner.
The Software Technology Park of India (STPI) is a 100% export oriented scheme for undertaking software development for export using data communication links. This society was set up under Ministry of Information Technology in 1991. At present there are23 STP’s in India.
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