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Contents
Vision :
The Mission :
Objectives
13. All matters relating to personnel under the control of the Department.
In the past decade, Governments in India, both at the Centre and the States,
have launched a variety of initiatives and interventions to promote the IT
industry and sustain its role as the growth engine of the economy. While
concurrent efforts were also initiated to stimulate overall IT development, a
majority of investment incentives, including tax and fiscal concessions, and
provision of support infrastructure were initially largely targeted towards the
software industry. Consequently, while the BPO and software industry has
grown rapidly in response to these initiatives, large segments of the Indian
economy and society continue to be outside the purview of IT. India is yet
to harness the dramatic economy-wide productivity , efficiency gains and
transformation experienced by the US, Europe and other parts of the
developed world consequent to IT induction. [It may be noted that 75 %
of all Fortune 500 Companies outsource IT to India in other words, Indian
software services contribute significantly to global productivity] A key
reason underlying this is the significantly lower levels of IT investment and
How can India similarly leverage ICT as a general purpose technology , and
its inherent strengths in IT and software services to address the critical
challenges of the future and meet the aspirations of its citizens?
The challenges that India confronts are diverse and numerous; ranging from
lack of modernization of its traditional sectors to gross inadequacy of
services to meet the aspirations of its people. While India’s large talent
pool, diversified industrial base , entrepreneurial talent and low cost wage
structure constitute significant comparative advantages, the expanding skills
deficit, key infrastructure bottlenecks , and severe inequities in service
provisioning pose major constraints to growth. India also faces an
increasingly uncertain external environment, with rising competition and
globally depressed markets.
- Generating employment
This would however require a bold vision and strategic, high velocity
interventions and investments capable of triggering a transformational ,
economy wide impact; rather than incremental and fragmented measures
whose impact is likely to be sub-optimal.
Korean is the leading example of a country rising from a low level of ICT
access to one of the highest in the world. At the turn of the millennium, the
republic of Korea had a broadband penetration of just 1% . To promote
adoption of Broadband, the Korean Government launched Cyber Korea 21, a
program offering affordable IT education to marginalized groups like
housewives, the elderly and the disabled.
Countries the world over have recognized the need for national broadband
networks; and have invested significantly in creating such networks.
Broadband networks have also been found to pay for themselves through the
resultant cost savings in sectors such as health, education, energy and
transport which this makes them highly cost effective. Recent estimates
show that in some countries, cost savings of 0.5% to 1.5% over ten years in
these four key sectors alone justify the cost of building broadband networks.
What kind of strategy would India need to pursue to maintain its BPO and
software leadership, improve service levels and meet the aspirations of its
citizens for a better life?
- Global benchmarking
India’s share is currently under 5 % of the global IT- services spend of 1.6
Trillion USD; although it commands an impressive 52 % of the offshoring
13 | P a g e Strategic Plan Document for Information Technology: 2010-2015
market. The last two years however are indicative of future trends : slower
growth in BPO post the financial crisis and growing competition from SE
Asia, Latin America and E Europe for the BPO market.
These trends highlight both the opportunity and threat for India. A robust
strategy would hence require to plan both for a substantial expansion of
India’s share of the global market while growing the domestic market as a
long term risk mitigation measure.
Pro-active and continued support to the industry for a further period would
be critical in this context, given the extremely competitive nature of the
industry as more countries seek to tap into the growing BPO business and
develop in-house competencies. Countries like Philippines, Vietnam, China ,
Egypt and European countries are expected to emerge as strong contenders
to India with lower wages, and attractive incentives for BPO companies.
China:
Malaysia :
The Malay Government has a strong focus on promoting the IT-BPO
industry in Penang through initiatives such as ‘Invest Penang’ and
creating the Software consortium of Penang (SCoPe)
Philippines:
Iloilo City has been identified by the Philippines government as one of
the ‘next wave’ cities for the ICT industry.The city is suited for creating
supporting operations for companies who wish to set up a hub-and-spoke
model in the Philippines, by providing a lower cost alternative to Manila
and Cebu City Australia
Australia
The Queensland government promotes the growth of the ICT sector
through its “Smart ICT Strategy” that extends support to the ICT industry
for raising capital, export enhancement, research and development and
business development.
create strong demand pull within the country for IT/ITES , thus
mitigating the risk of depression/ competition in export markets
As noted earlier, the general level of IT penetration in India amongst the non
IT sectors and major urban centres is fairly low. Domestic IT spend by
industry is also significantly lower . [ India’s IT spend at 2 % is lowest
among the 4 BRIC countries , and one third of China’s]
India has already launched the NUID , E-Gov infrastructure , and MMPs as
foundational projects for e-governance in the country. Mandated Electronic
Service Delivery by a specified date, speedy implementation of the NeGP
and massive capacity building are other priority areas for intervention.
Innovation Hub
India also has a fairly high level of foreign co-inventors, suggesting both its
relative openness in research activities and its dependence on foreign
partners.
The creation of the Core Access Network is envisaged as the basic public
access network linking Government, enterprises and citizens for laying the
foundation of the digital economy ; and would be the platform for all smart
applications of the future. The network is expected to play a key
transformational role for the Indian economy and society as did Korea’s IT
839 PLAN and take India to a leadership position in the digital
competitiveness index.
While the network is envisaged to be publicly funded for the most part,
mechanisms such as the USO may be considered to incentivize
supplementary private investment.
India has initiated implementation of the National UID project which aims
to provide a unique ID number to each Indian on the lines of the Social
Security Number in the US . Under this flagship scheme, all residents of
The following SDIs are proposed to be launched during the next 5 years:
2. E-Governance
4. Focus Hardware
Cyber-security:
While India already has basic legislation in place for ensuring cyber-
security ; it requires to develop the requisite capabilities for cyber
forensics , law enforcement and digital evidencing on an emergent basis.
It also requires to develop a robust policy, strategy , guidelines and tools
The strategy and implementation plan outlined delineate the high level goals
to be achieved and direction of actions to be pursued. They shall constitute
the basis for drawing up Detailed Implementation Plans , specifying the
time-frames, quantitative and qualitative targets to be achieved and
resources to be earmarked ; and shall be suitably reflected while framing the
Department’s RFD.
This would however require clear and unambiguous policy prioritization and
cohesive, synergized actions to achieve the desired objectives, particularly in
key areas such as strategic IT infrastructure , broadband and NUID.
Conclusion:
Nasscom 2010