Growth In IT Sector

Presented By- Vijay Kumar

Information Technology
India's IT Services industry was born in Mumbai in 1967

with the establishment of Tata Group in partnership with Burroughs. The first software export zone Santacruz Electronics Export Processing Zone SEEPZ was set up here way back in 1973, the old avatar of the modern day IT park. More than 80 percent of the country's software exports happened out of SEEPZ, Mumbai in 80s. Poised to become a US$ 225 billion industry by 2020, the Indian information technology (IT) industry has played a key role in putting India on the global map. The IT-BPO sector has become one of the most significant growth catalysts for the Indian economy.

 In addition to fuelling Indias economy, this industry is

also positively influencing the lives of its people through an active direct and indirect contribution to various socio-economic parameters such as employment, standard of living and diversity.

Current Situation
Between April 2000 and February 2011, the computer

software and hardware sector received cumulative foreign direct investment (FDI) of US$ 10,705 million, according to the Department of Industrial Policy and Promotion. Despite economic uncertainties in the US and Europe, Indias software body Nasscom is confident of a 16-18 per cent growth rate of the countrys information technology (IT) industry in FY12, with the sector slated to bring in about $68-70 billion in revenue. Growth in the domestic market is estimated at 15-17 per cent, with revenues of about $19-20 billion.

 India's top technology firms like TCS, Infosys, Wipro

and HCL are readying plans to gain a bigger share of their largest market, US, by aggressively chasing contracts being served by multinational rivals. Analysts expect the top IT firms to grow between 2327 per cent in the FY2012 on the back of more number of discretionary projects, improved pricing, and robust business volumes.

The Unbelievable Achieve

India is a preferred destination for companies looking to offshore their IT and back-office functions. It also retains its low-cost advantage and is a financially attractive location when viewed in combination with the business environment it offers and the availability of skilled people. Indias Information Technology industry growth is unparalleled in the history. No other industry in India has grown at such fast and scorching pace as the IT industry. Indias IT industry started blooming in the 1990s and was estimated at 150 million (or 0.15 billion) US Dollars in 1990-91.

 By 2006-2007, the industry has grown to 50,000

million (or 50 billion) US dollars; that is a 330 fold increase in just 15 years! By year 2008, the industry was estimated to increase to 87 billion US dollars. The annual growth rate of the industry in India is estimated at 30%.

Reasons for growth of IT sector

India made a widely welcomed strategic shift in its

national policy in the early nineties and removed many restrictions to liberalize the Indian economy. This has given an unimaginable impetus for growth of all industrial sectors, and IT was in the forefront to take advantage of the liberalization policies. The relaxed policies made it easier for inflow of foreign capital into this industry. India has the second largest technically qualified manpower, the first being US, with skills in English language. It is estimated that there are over 4 million technically qualified workers available for employment in India. Cost of labor is perhaps one tenth of the wages prevalent in US.

 The Government of India has also suitably

chipped in with reducing import duties on software and hardware products to encourage growth of the IT industry. Many local governments have actively participated in the growth of IT industry and set up dedicated IT parks with all infrastructure and power for the smooth functioning of participating companies in these IT parks.

Steps taken by the Indian government

Constitution of the Technical Advisory Group for Unique Projects

(TAGUP) under the chairmanship of Nandan Nilekani. The Group would develop IT infrastructure in five key areas, which includes the New Pension System (NPS) and the Goods and Services Tax (GST) Setting up the National Taskforce on Information Technology and Software Development with the objective of framing a long term National IT Policy for the country. Enactment of the Information Technology Act, which provides a legal framework to facilitate electronic commerce and electronic transactions. Setting up of Software Technology Parks of India (STPIs) in 1991 for the promotion of software exports from the country.There are currently 51 STPI centres where apart from exemption from customs duty available for capital goods, there are also exemptions from service tax, excise duty, and rebate for payment of Central Sales Tax. Plans to formulate Information Technology Investment Regions (ITIRs). These regions would be endowed with excellent

Emerging Trends in IT
Quantum computers-which harness the power

of atoms and molecules to perform memory and processing tasks. Quantum computers have the potential to perform certain calculations significantly faster than any silicon-based computer Device Modularity-Device modularity is essentially when one device, when docked or connected to another one, becomes something even better or more functional. Its a world where a phone becomes a tablet; a tablet becomes a notebook and even a phone or tablet becomes a desktop

 Cloud computing- It is the delivery of computing as a

service rather than a product, whereby shared resources, software, and information are provided to computers and other devices as a metered service over a network (typically the Internet). Instead of installing a suite of software for each computer, you'd only have to load one application. That application would allow workers to log into a Web-based service which hosts all the programs the user would need for his or her job. Remote machines owned by another company would run everything from e-mail to word processing to complex data analysis programs. It's called cloud computing, and it could change the entire computer industry.

 On his recent visit to New Delhi, Microsoft CEO Steve

Ballmer said cloud computing would generate 300,000 jobs in India. Adding weight to his estimate, technology research firm IDC has now projected that revenues from cloud services in India will grow to over $3 billion by 2015 from the $534 million expected this year.

IT Sector-Road Ahead
The Indian information technology sector continues to

be one of the sunshine sectors of the Indian economy showing rapid growth and promise. According to a report prepared by McKinsey for NASSCOM called 'Perspective 2020: Transform Business, Transform India', the exports component of the Indian industry is expected to reach US$ 175 billion in revenue by 2020. The domestic component will contribute US$ 50 billion in revenue by 2020. Together, the export and domestic markets are likely to bring in US$ 225 billion in revenue, as new opportunities emerge in areas such as public sector and healthcare and as geographies including Brazil, Russia, China and Japan opt for greater outsourcing.