Information Technology and the Changes in Indias Economic Development

M.Rajkumar S.Gautam Abstract :

This paper addresses the impact of investment in information technology (IT) on the recent resurgence of Indian economic growth. We allocate the growth of world output between input growth and productivity and find, surprisingly, that input growth greatly predominates! The contributions of IT investment have increased in all regions, but especially in industrialized economies and Developing Asia. Differences in per capita output are explained by differences in per capita input, rather than by variations in productivity It also discusses the possibilities for broad-based IT-led economic growth in India, including increasing value-added, using better telecom links to capture more benefits domestically through offshore development for developed country firms, greater spillovers to the local economy, broadening the IT industry with production of telecom access devices, improving the functioning of the economy through a more extensive and denser communications network, and improving governance. We also examine the policy environment, arguing that government policy is better focused on removing labor market distortions and infrastructure constraints, rather than providing output or export subsidies to the software industry In the last two decades, the Indian IT/ITES industry has contributed significantly to Indian economic growth in terms of GDP, foreign exchange earnings and employment generation. The industry has been the trigger for many "firsts" and has contributed not only to unleashing the hitherto untapped entrepreneurial potential of the middle class Indian but also taking Indian excellence to the global market

Department of Mba, Sona College of Technology , Salem . Mob no: 90036-43066 , 8122510739 Email:rajkumartechsys@gmail.com, gautam.s.csc@gmail.com

Keywords: Information technology, software, complementarities, telecommunications

References:
Arora, Ashish and Suma Athreye (2002), The Software Industry and Indias Economic Development, Information Economics and Policy, 14, 253-273. Bajpai, Nirupam and Navi Radjou (1999), Raising the Global Competitiveness of Tamil Nadus Information Technology Industry, Development Discussion Paper No. 728, October, Harvard Institute for International Development. Bajpai, Nirupam and Anupama Dokeniya (1999), Information Technology-Led Growth Policies: A Case Study of Tamil Nadu, Development Discussion Paper No. 729, October, Harvard Institute for International Development. Business Week (2001), India 3.0: Its software outfits take on the world, February 26, 44-46 India Today (2000), Is e-Governance for Real?, December 11, pp. 70-75. Kapur, Devesh (2002), The Causes and Consequences of Indias IT Boom, India Review, 1, 1, 91-110. Singh Nirvikar (2002) Information Technology and Indias Economic Development

Department of Mba, Sona College of Technology , Salem . Mob no: 90036-43066 , 8122510739 Email:rajkumartechsys@gmail.com, gautam.s.csc@gmail.com