IT industry is at crossroads

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SummaryAn oft repeated refrain from other industry players about the IT sector is that the sector has been the blue-eyed boy of the government for many years and now there is no need to do anything for the IT guys—let them fend for themselves!

An oft repeated refrain from other industry players about the IT sector is that the sector has been the blue-eyed boy of the government for many years and now there is no need to do anything for the IT guys—let them fend for themselves! And as a new set of budget announcements is just around the corner, it may be a good time to assess how government policy has facilitated the growth of our industry to its hundred billion dollar level and what more needs to be done now.

There is no doubt that the visionary Software Technology Parks of India (STPI) scheme formulated by the erstwhile department of electronics provided the initial fillip to the industry and encouraged early investors to chase the pot of gold at the end of the software exports rainbow—a pot that many enterprising entrepreneurs did find and continue to fill even today! There are also many excellent initiatives the industry can thank successive IT ministers and the bureaucrats in the ministry of IT for—the IT SEZs, the collaborations to create the Data Security Council of India and the National Institute of Smart Governance and the mission mode e-government projects announced with much fanfare and slowly seeing implementation.

However all this has not just resulted in success for the industry but also provided substantial collateral benefits for the country. Over ten million direct and indirect employment opportunities created, enhanced balance of payments position through exports earnings and foreign exchange repatriations and the ability to say that at least in one industry segment, India is the undisputed number one are just three of the many advantages that a robust software exports sector has given India. Surely a case of symbiotic government-industry relationships that have helped the country a great deal!

The industry is today at a cross-road and will need among other things, some visionary government policy support to continue its leadership and widen the gap with competitors. Today we have competitors like the Philippines, Vietnam, Mexico and of course China nipping at our heels, all aided by government incentives and subsidies for the sector. The IT services industry has matured and is proudly paying its share of taxes all over the world and through initiatives like Nasscom Foundation and company specific CSR and employability initiatives, doing more than its share to work for the cause of national progress. So what do we expect from the Budget? Nothing much,

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