growth in it sector

7/28/2019 Growth in IT Sector

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Growth In IT Sector

Presented By- Vijay Kumar


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

with the establishment of Tata Group in partnership withBurroughs. The first software export zone SantacruzElectronics Export Processing Zone SEEPZ was set

up here way back in 1973, the old avatar of the modernday IT park. More than 80 percent of the country'ssoftware exports happened out of SEEPZ, Mumbai in80s.

Poised to become a US$ 225 billion industry by 2020, theIndian information technology (IT) industry has played akey role in putting India on the global map. The IT-BPOsector has become one of the most significant growthcatalysts for the Indian economy.


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In addition to fuelling Indias economy, this industry isalso positively influencing the lives of its peoplethrough an active direct and indirect contribution tovarious socio-economic parameters such as

employment, standard of living and diversity.


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Current Situation Between April 2000 and February 2011, the computer

software and hardware sector received cumulativeforeign 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 confidentof a 16-18 per cent growth rate of the countrys

information technology (IT) industry in FY12, with thesector slated to bring in about $68-70 billion inrevenue. Growth in the domestic market is estimatedat 15-17 per cent, with revenues of about $19-20billion.


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India's top technology firms like TCS, Infosys, Wiproand HCL are readying plans to gain a bigger share oftheir largest market, US, by aggressively chasingcontracts being served by multinational rivals.

Analysts expect the top IT firms to grow between 23-27 per cent in the FY2012 on the back of morenumber of discretionary projects, improved pricing,and robust business volumes.


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The Unbelievable Achieve

India is a preferred destination for companieslooking to offshore their IT and back-officefunctions. It also retains its low-cost advantageand is a financially attractive location when

viewed in combination with the businessenvironment it offers and the availability of skilledpeople.

Indias Information Technology industry growth is

unparalleled in the history. No other industry inIndia has grown at such fast and scorching paceas the IT industry. Indias IT industry startedblooming in the 1990s and was estimated at 150

million (or 0.15 billion) US Dollars in 1990-91.


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By 2006-2007, the industry has grown to 50,000million (or 50 billion) US dollars; that is a 330 foldincrease in just 15 years! By year 2008, the industrywas estimated to increase to 87 billion US dollars.

The annual growth rate of the industry in India isestimated at 30%.


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Reasons for growth of IT sector

India made a widely welcomed strategic shift in itsnational policy in the early nineties and removedmany restrictions to liberalize the Indian economy.This has given an unimaginable impetus for

growth of all industrial sectors, and IT was in theforefront to take advantage of the liberalizationpolicies. The relaxed policies made it easier forinflow of foreign capital into this industry.

India has the second largest technically qualifiedmanpower, the first being US, with skills inEnglish language. It is estimated that there areover 4 million technically qualified workersavailable for employment in India. Cost of labor is

perhaps one tenth of the wages prevalent in US.


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The Government of India has also suitablychipped in with reducing import duties onsoftware and hardware products to encouragegrowth of the IT industry.

Many local governments have activelyparticipated in the growth of IT industry and setup dedicated IT parks with all infrastructure andpower for the smooth functioning of participating

companies in these IT parks.


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Steps taken by the Indian government Constitution of the Technical Advisory Group for Unique Projects

(TAGUP) under the chairmanship of Nandan Nilekani. The Groupwould develop IT infrastructure in five key areas, which includes theNew Pension System (NPS) and the Goods and Services Tax (GST)

Setting up the National Taskforce on Information Technology andSoftware 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 electronictransactions.

Setting up of Software Technology Parks of India (STPIs) in 1991 for

the promotion of software exports from the country.There arecurrently 51 STPI centres where apart from exemption from customsduty available for capital goods, there are also exemptions fromservice tax, excise duty, and rebate for payment of Central SalesTax.

Plans to formulate Information Technology Investment Regions(ITIRs). These regions would be endowed with excellent


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Emerging Trends in IT

Quantum computers-which harness the powerof atoms and molecules to perform memory andprocessing tasks. Quantum computers have thepotential to perform certain calculations

significantly faster than any silicon-basedcomputer

Device Modularity-Device modularity isessentially when one device, when docked or

connected to another one, becomes somethingeven better or more functional. Its a world wherea phone becomes a tablet; a tablet becomes anotebook and even a phone or tablet becomes a

desktop


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Cloud computing- Itis the delivery of computing as aservice rather than a product, whereby sharedresources, software, and information are provided tocomputers 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 theuser would need for his or her job. Remote machinesowned by another company would run everythingfrom e-mail to word processing to complex dataanalysis programs. It's called cloud computing, and

it could change the entire computer industry.


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On his recent visit to New Delhi, Microsoft CEO SteveBallmer said cloud computing would generate300,000 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 millionexpected this year.


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IT Sector-Road Ahead

The Indian information technology sector continues tobe one of the sunshine sectors of the Indian economyshowing rapid growth and promise.

According to a report prepared by McKinsey forNASSCOM called 'Perspective 2020: Transform

Business, Transform India', the exports component ofthe Indian industry is expected to reach US$ 175billion in revenue by 2020. The domestic componentwill contribute US$ 50 billion in revenue by 2020.Together, the export and domestic markets are likelyto bring in US$ 225 billion in revenue, as newopportunities emerge in areas such as public sectorand healthcare and as geographies including Brazil,Russia, China and Japan opt for greater outsourcing.
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