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Indian Information Technology Industry : Past, Present and Future& A Tool for National Development
Somesh.K.Mathur1

Abstract
India's software and services exports have been rising rapidly. The annual growth rate ranges between 20 -22% in IT services and nearly 55 % in IT-enabled services (ITES), such as call centres, Business Process Outsourcing ( BPO) and other administrative support operations. Together they are predicted to grow at 25% pa till 2010.The IT industry is highly export oriented and the exporters are predominantly Indian. The Indian BPOs (ITES) are moving up the value chain, handling high end data for airline information, insurance, banking sector and mortgage companies, enterprise resource planning, among others. Some of the companies have already moved into significantly higher value added segments such as mission- critical applications, development and support, product design, HR Management, knowledge process outsourcing for pharmaceutical companies and large complex projects.

Software exports make up 20 % of India's total export revenue in 2003-04, up from 4.9 % in 1997.This figure is expected to go up to 44% of annual exports by 2010. Though India accounts for just about 3 % of the world market for information technology services, this sector has been growing at a scorching pace, helped by a large pool of English-speaking workers, nearly 2 million engineers and the increasing tribe of tech-savvy entrepreneurs in the country.

The Information Technology industry currently accounts for almost 4.8 % of India's GDP. It will account for 7 % of India's GDP by 2010.
Software and IT enabled services have emerged as a niche sector for India. This was one of the fastest growing sectors in the last decade with a compound annual growth rate exceeding 50 per cent. Software service exports increased from US $ 0.50 million in 1990 to $5.9 billion in 2000-01 to 23.6 billion dollars in 2005-06 recording a 34% growth. A compound annual growth of over 25% per annum is expected over the next 5 years even on the expanding base. The impact on the economy of projected software and IT enabled service exports of $ 60 billion by 2010 is likely to be profound. One manifestation is that India notched up a current account surplus in 2001-02, for the first time in 24 years. India further needs an open environment under GATS to promote exports of services through outsourcing and off-shoring2.

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Fellow ,RIS. Email: someshmathur@ris.org.in,som3@vsnl.com. Most of the figures in the paper are from NASSCOM and International Data Corporation(IDC)
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Cross border IT enabled services are services provided from one country to another over telecommunication or data networks; and are either externally contracted (outsourced) or provided by a remote subsidiary of the same company( off-shored /out-located). Offshore outsourcing jobs can be performed at a fraction of the cost in low wage countries such as India and China. Though issues such as wage inflation and rising competition from other low-cost contenders has narrowed their overall lead. Due to a revolution in digital technology and reduction in telecommunication costs,

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The present study examines the growth performance of India’s IT industries, with particular attention paid to the role of policy in this process. The study recognizes that emergence of a strong Indian IT industry happened due to concerted efforts on the part of the Government, particularly since 1980s, and host of other factors like Government-Diaspora relationships, private initiatives, emergence of software technology parks, clustering and public private partnerships. In this study we further look at the major parameters of the Indian IT industry and give justification for including the main factors responsible for the IT boom in India. The study has looked into the past and present trends of the Indian IT industry and has considered further needs of IT sector to act as a catalyst of growth and...
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