Chapter 4: Contribution ofIT/ITES. Section 1: Contribution to theIndian Economy. Thecurrent and evolving role of IT/ITES industry in India’s economy is wellestablished.
The sector is proving to be the major growth pole within theservices sector, which in turn drives several economic indicators of growth inthe country. A few key indicators of direct contribution are: .Growing share of the country’s GDP: The sector’s contribution to the country’sGDP has been steadily increasing from a share of 1.2% in FY98 to 5.
2% in FY07 .Boosting the foreign exchange reserve of the country: Export earnings in FY08stood at approximately USD 40.0 billion with a growth of 36%.
.Employment generation: Direct employment in the sector is expected to be 2.0million by end of FY08, growing at a CAGR of 26% in the last decade, making itthe largest employer in the organized private sector of the country. Section2: Other Contributions. .Additional employment generation: The indirect employment generated, at therate of 4 additional jobs created in the economy for every 1 job created in thesector, is even more socially relevant as nearly 75% of the workforce employedin those additional jobs are SSC/HSC or less educated .Driving growth of other sectors of the economy: Apart from contributing to thegrowing income of its direct stakeholders (promoters, shareholders andemployees), the IT/ITES industry has had a multiplier effect on other sectorsof the economy with an output multiplier of almost 2 through its non-wage operatingexpenses, capital expenditure and consumption spending by professionals. Studyshow that USD 15.
85 billion spent by the IT/ITES industry in the domesticeconomy in FY06 generates an additional output of USD 15.5 billion. .
Encouraging balanced regional development: By gradually spreading theirbusiness operations to smaller Tier II/III cities, the IT sector (besidesgenerating revenue and employment) is also assisting in improving the supply oftalent pool and development of physical and social infrastructure, eitherdirectly by themselves or by spurring the Government to action Section3: In case of Bhubaneswar (a Tier III city), some of the key impact of theIT/ITES sector has been:- 1.Increase in software exports – Software exports from the state reached USD 183million in 06-07, a 60% rise over exports in 05-06, on track to reach thetarget of 500mn USD by 2011-12. 2.Increase in registered IT/ITES units – The number of registered and exportingunits has risen steadily showing a CAGR of 118 and 170% respectively. ascompared to 98-99.
Besides the capacity expansion of existing units, many ofthe big companies are also setting up operations in the city 3.Employment – Supply of IT professionals, which was higher than demand till2004, now have a shortfall of 62,697. Demand for IT professionals is expectedto reach 430,000 by 2011-12 with the corresponding figures on indirectemployment being 1,720,000 4.Education – While building and expanding capacity of educational institutes areunderway, IT majors are undertaking training initiatives to improve studentquality. At least 5 new educational institutions (including IIIT and IITKharagpur campus) by both Government and private players are also being set up.
5.Infrastructure and other amenities – Keeping in line with the expansion/entryplans of major IT/ITES companies, IT parks and townships are being built with acorresponding improvement in other amenities like roads, housing, retail andentertainment facilities. Chapter 5: Government initiatives. Some of themajor initiatives taken by the government to promote IT and ITeS sector inIndia are as follows:Mr Ravi ShakarPrasad, Minister of Communication and Information Technology, announced plan toincrease the number of common service centres or e-Seva centres to 250,000 from150,000 currently to enable village level entrepreneurs to interact withnational experts for guidance, besides serving as a e-services distributionpoint.The Governmentof Telangana has signed an agreement with network solutions giant Cisco SystemsIncorporation, to cooperate on a host of technology initiatives, includingSmart Cities, Internet of Things, cybersecurity, education digitisation ofmonuments.The RailwayMinistry plans to give a digital push to the India Railways by introducingbar-coded tickets, Global Positioning System (GPS) based information systemsinside coaches, integration of all facilities dealing with ticketing issues,Wi-Fi facilities at the stations, super-fast long-route train service forunreserved passengers among other developments, which will help to increase thepassenger traffic.The Pune SmartCity Development Corporation (PSCDCL) has signed a memorandum of understanding(MOU) with the European Business and Technology Centre (EBTC), which will allowit to gain access to real-time knowledge of technologies, solutions and bestpractices from Europe.
The e-TouristVisa (e-TV) scheme has been extended to 37 more countries thereby taking thetotal count of countries under the scheme to 150 countries.Department ofElectronics & Information Technology and M/s Canbank Venture Capital FundLtd plan to launch an Electronics Development Fund (EDF), which will be a ‘Fundof Funds’ to invest in ‘Daughter Funds’ which would provide risk capital tocompanies developing new technologies in the area of electronics,nano-electronics and Information Technology (IT).The HumanResource Development (HRD) Ministry has entered into a partnership with privatecompanies, including Tata Motors Ltd, Tata Consultancy Services Ltd andreal-estate firm Hubtown Ltd, to open three Indian Institutes of InformationTechnology (IIITs), through public-private partnership (PPP), at Nagpur, Ranchiand Pune.Government ofIndia is planning to develop five incubation centres for ‘Internet of Things'(IoT) start-ups, as a part of Prime Minister Mr Narendra Modi’s Digital Indiaand Startup India campaign, with at least two centres to be set up in ruralareas to develop solutions for smart agriculture.The Government ofIndia has launched the Digital India program to provide several governmentservices to the people using IT and to integrate the government departments andthe people of India. The adoption of key technologies across sectors spurred bythe ‘Digital India Initiative’ could help boost India’s Gross Domestic Product(GDP) by US$ 550 billion to US$ 1 trillion by 2025@@.India and the UShave agreed to jointly explore opportunities for collaboration on implementingIndia’s ambitious Rs 1.
13 trillion (US$ 16.58 billion) ‘Digital IndiaInitiative’. The two sides also agreed to hold the US-India Information andCommunication Technology (ICT) Working Group in India later this year.The Governmentof Telangana has begun construction of a technology incubator in Hyderabad—dubbedT-Hub—to reposition the city as a technology destination. The state governmentis initially investing Rs 35 crore (US$ 5.14 million) to set up a 60,000 sq ftspace, labelled the largest start-up incubator in the county, at the campus ofInternational Institute of Information Technology-Hyderabad (IIIT-H).
Oncecompleted, the project is proposed to be the world’s biggest start-up incubatorhousing 1,000 start-ups.The Departmentof Electronics and Information Technology (DeitY) plans to start a digitalliteracy programme, aimed at training over six crore Indians in the next threeyears to empower them for digital inclusion. Chapter6: Diversity in EmploymentBesidesbeing the largest employer in the organized private sector, the IT/ITESindustry also consciously follows a diverse employment practice and encouragesdiversity in the work place in terms of qualification, abilities, gender, skillsets. .Creating employment opportunities in smaller towns/cities: By recruiting talentfrom non-metro towns and rural background, the industry has reached out to theeducated resource pool in these places and created employment opportunities,which hitherto was largely limited .
Large IT/ITES companies often have 33 to 50% of their employees coming fromnon-metro/rural areas .Encouraging employment of differently-able: Through their policy and practiceof employing differently able people, training them and creating a conductiveworking environment, IT/ITES companies are initiating a trend which could havea significant impact onemployment opportunities for the differently able in India. . 64%of the companies surveyed by Deloitte employ people with disabilities .Opening opportunities for non-technical personnel: The growing employmentopportunities in this sector (both direct and indirect) are not restricted tothe better educated or technically educated people alone. While 75% of theemployment generated through the indirect route are filledin by candidates who are SSC/HSC or less educated, companies also help underqualified candidates to reach a desired skill level by investing in theirtraining and skill up gradation .Promoting women empowerment: The growing trend in the number of women employedin this sector indicates that not only does the industry offer equalopportunity to women but also has in place proactive and sensitive mechanismswhich counter the common causes that discourage women from pursuing employmentin the corporate sector.
.Women employment in the industry is set to rise to 45% by 2010 from the current30%. .Providing high growth opportunities for the youth: The industry has createdexcellent employment and fast track growth opportunities for the youngersection of the population and is likely to become one of the largest employersof a growing ‘young population’ of India. . Theoverall median age group of the sector is 28.9 years with 70% of the workforcebeing in the age-group 26-35 years. .
Creating opportunities for the ‘out-of-the-mainstream’ candidates: The ITindustry through its innovative recruitment practices has also hired personswho would not typically be considered employable such as retired persons andhousewives. Chapter7: Road Ahead. Thecontribution of the IT/ITES industry to India’s economy and society has beenwell established and is indeed significant. Each of companies has played a rolein this success story. As the industry grows in stature and size, it would beexpected to play an even larger role, especially in contributing to themarginalized and vulnerable sections of the community. This is even moreimportant as the industry has at its call, the two most important tools formaking this impact, a young motivated work force and technology.
Both togethercan make a significant impact on improving the lives of the poor. Thestudy highlights that while there are many meaningful and significantinitiatives being taken by a number of companies. There is both, a need toincrease the participation by member companies as well as to work towardsensuring that the efforts are able to achieve the maximum impact. Chapter 8: Conclusion The IT/ITESsector has brought about revolution in India since 1990s. This is because it hasreduced in business and society, provided solutions sectors (be it agriculturesector or manufacturing sector), firm level behaviour, empowering individualsproviding them with more information and is increasingly an important tool fornational and ruraldevelopmentthrough E- governance, E-Banking and E- programmes. The export performance ofIndia’s and service sector during the last decade has beenunprecedented.As a result, the software and service sector for over 20% of India’s totalexports and 2.6% of.
In addition, there has been a marked decline in theshare of onsiteservices and today almost 60% of India’s and services export takes the formofoff shore. The undifferentiated and service nature of Indian firms has meantthat human capital has acquired an that was hitherto reserved for financial andphysical in Indian industry. In an extremely competitive market for softwareservices, Indian firms havetried toemphasize the quality of procedures and human used by them to gain competitiveadvantage. technology is rapidly changing economic and activities. It providesopportunities and challenges making progress with accelerated growth andpovertyreduction inIndia.Indian IT industry is one of the key tocontribute its significance in thegrowth ofGDP of India, exports, revenue andemployment. Theemergence of Indian information sector has brought about sea changes in the jobmarket. The IT sector of India offers a host opportunities of employment.
WithIT biggies like, Cognizant, Wipro, Tata Consultancy Services, and several otherIT firms operatingin some the major Indian cities, there is no dearth of jobfor the Indian software professionals. The enabled sector of India absorbs alarge number ofgraduates fromgeneral stream in the BPO and KPO firms. these have solved theunemploymentproblem of India a great extent. The average purchasing power of the people ofIndia has improved substantially. The spending has recorded an all-time high.Theaggregate demandhas increased as a result.
All these have the gross production of goods andservices in Indian economy. So in conclusion it can be said thatthe growth ofIndia’s IT industry has been instrumental facilitating the economic progressofIndia. To conclude, can be said that India is now an integral partof theGlobal Village,thanks to the developments witnessed inInformationTechnology.