Infotech needs a greater push to scale the Great Wall

Written by Rachana Khanzode | Mumbai | Updated: May 21 2009, 05:36am hrs
In its second consecutive stint, the UPA government will have to make increased efforts to retain the top position of the Indian IT industry globally, according to industry experts. Neighboring China is expected to emerge as a major competitor to India in the IT sphere, with domestic sales of Chinese software companies poised to reach $143 billion in 2010, according to Chinas National 11th Five-year plan (2005 to 2010). At the same time, according to Nasscom, the Indian IT-BPO industry will achieve revenue of $ 71.7 billion in the financial year 2009.

China is expecting this revenue growth as a result of various government initiatives that are at the moment lacking in India. Besides developing infrastructure, the Chinese government is cultivating high-quality software talent to boost rapid development of software industry through partnership with leading universities in the country, like with Microsoft for its latest technologies.

Pramod Bhasin, chairman, Nasscom and president and CEO, Genpact said, These numbers also include the Microsoft product software and other revenues that we need to factor in. We are, therefore, talking to the government to bring inflation reforms like (extension of benefits on) Software Technology Parks of India (STPI) and have more of public and private partnerships and engagements in foreign policy."

Besides developing infrastructure and bringing changes in the education format, industry experts say that the government should indulge into more of international relationships to explore opportunities for the IT industry like engineering services in avionics with Israel. Also, the government can leverage on the nuclear deal and demand for some outsourcing work to be done out with India for the nuclear set up. The total IT spending in the US government vertical is estimated to be in the region of $100-$ 150 billion, of which 20% is outsourced. Tata Consultancy Services vice-president and head (India) S Venkatramani said, The government and Nasscom should reinvest our policies every three years. At the same time, work on our education formats and develop more of system scientists that are huge in demand." He further adds the industry as a whole should look at the next level of work to consulting, real time management and programme management.

The Chinese government also provides various incentives to companies who set up their base, like the cost of operation for the first two years is almost negligible. Ganesh Natarjan, vice-chairman and CEO, Zensar Technologies, says, The Indian government might not look at such high incentive options as we are already ahead of China but we need to level play and develop 40-50 knowledge centers. We need to bring higher education through private firms while primary education from government so that the industry is ready for the coming years. While the industry sets itself ready for the challenge going ahead, the new government now needs to bring renewed focus on this sector.