IT Sector in India

pool of opportunities or start of endless wait

The information technology Sector has very big contribution in growth of Indian economy, it gains distinguished brand identity as a knowledge economy in world. The Information Technology (IT) and IT enabled Services (ITeS) has four major subcomponents: IT services, BPO, engineering services, R&D and software products. Major Players are Infosys, Cognizant, Wipro, Tata Consultancy Services, and Accenture. IT/ITeS industry has been one of the key driving forces fuelling Indias economic growth. As a proportion of national GDP, IT/ITeS sectors contribution has risen from 1.2% in 1997-98 to an estimated 7.5% in 2011-12. As per NASSCOM estimates, IT/ITeS sector (excluding hardware) revenues are estimated at US$ 87.6 billion in FY 2011-12. The IT/ITeS industry is expected to grow by 19% during FY 2012-13. The sector has also created tremendous entrepreneurial and job opportunities, generating direct and indirect employment of nearly 2.8 million and around 8.9 million respectively. Estimates reflect the growth to be more than 14 million (directly and indirectly) by 2015 and around 30 million by 2030. So far in this financial year the growth is not as sector expected, faced different challenges like regular devaluation of Indian currency (INR) , lack of political will in ruling government, high rate of inflation and Global Slowdown. Apart of this there are other challenges includes Increasing competition from other countries with incentivised low costs Rising costs in India with wage-push inflation Increasing costs of relevant talent and skilled personnel Infrastructure constraints with over 90% of total revenues generated from seven Tier-1 locations Risks like currency fluctuations and security, both physical and data related

It does not means that Indian market has no hopes, in past government has taken different initiative to promote IT sector Some of the crucial steps taken by the Indian government to propel the sector growth are: 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 of 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. There are currently 51 STPI centers 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 infrastructure and would reap the benefits of co-sitting, networking and greater efficiency through use of common infrastructure and support services. Opportunities in the sector: The Indian information technology sector continues to be one of the sunshine sectors of the Indian economy. This sector promises huge contribution in the future time also. Some crucial factors depending upon which we can expect the growth of IT sector and hence the contribution to the Indian economy are as follows. India is a big country with big population, it has huge internal demand of IT and its Services in country India is home to a large number of IT professionals, who have the necessary skill and expertise to meet the demands and expectations of the global IT industry. The cost of skilled Indian workforce is reasonably low compared to the developed nations. This makes the Indian IT services highly cost efficient and this is also the reason as to why the IT enabled services like business process outsourcing and knowledge process outsourcing have expanded significantly in the Indian job market. India has a huge pool of English-speaking IT professionals. This is why the English-speaking countries like the US and the UK depend on the Indian IT industry for outsourcing their business processes. Conclusion: According to a report prepared by McKinsey for NASSCOM called 'Perspective 2020: Transform Business, Transform India', the exports component of the Indian

IT 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. So in conclusion it can be said that the growth of India's IT industry has been instrumental in facilitating the economic progress of India.