We have all heard about India’s green and white revolution. But there has been another signifi-cant revolution in India, which has changed India’s perspective and position in the global eco-nomic order.
It has pushed India’s status higher in the global economy. We are talking about In-dia’s IT revolution.
The IT industry and BPOs contribute 51% to India’s service sector. India has become one of the top IT service exporting countries in the world, along with New York, London, Hong Kong, and Singapore. The IT industry has become the new face of modern India. More than 50 lakh work-ers are directly employed in India’s IT industry. In terms of global revenue market share, India’s IT sector share has increased to around 35%. The IT sector is going to play a big role in the present and in the near future as India becomes a $5 trillion economy.
The base of India’s IT industry was created in 1963 by the Bhabha Committee, which made a 10-year plan (1966-1975) to develop local manufacturing capabilities to make computers. Eventually, the Father of the Indian IT industry, Dr. Faqir Chand Kohli, with the direction of JRD Tata in 1968, formed Tata Consultancy Services, which laid the foundation of the IT sector we see today in India. TCS has recently become the world’s second-most valuable IT services brand. Later on, in 1973, India’s first Software Export Zone (SEEPZ) was established in Mumbai, boosting India’s software exports. All these created a big IT wave in India, and slowly Infosys, Wipro, and HCL joined India’s IT hub. The 1970s were a tough time for Indian companies, especially the newly developed IT companies, because of the intense red tape and licence raj prevalent in India. The IT hub finally got a push in 1984, when the Rajiv Gandhi government came out with the New Computer Policy, which deregulated the IT industry. But the golden period of the IT industry came when the LPG reforms of 1991 were implemented, which opened the doors for the world to trade and invest in our IT sector. This reformative step increased technological advancements, FDI inflow, and employment generation manifold.
The collaboration with foreign IT companies enriched our technical know-how and also gave our companies a chance to represent themselves at a global level. During this time, i.e., after the LPG reforms, BPOs, call centres, and IT companies started to be established on a large scale. This pushed the growth curve of the Indian IT sector higher than ever before.
Although the Indian IT sector’s foundation was laid in Mumbai, the actual start of India’s IT in-dustry was in Bengaluru. Bengaluru is the pioneer of India’s IT sector and is popularly known as the Silicon Valley of India. Educational institutions played a big role in making Bengaluru the Silicon Valley of India. The Indian Institute of Science, established by JRD Tata in 1909, made Bengaluru a science and technology educational hub. The Hindustan Aeronautics Limited and Indian Space Research Organisation headquarters were also set up in Bengaluru. With the effort of RK Baliga in the 1970s, an Electronic City was established in Bengaluru on 322 acres of land. Companies like Infosys and Wipro also started to establish themselves in Bengaluru at the start of the 1980s, due to the ready-made pool of talented working IT professionals available there. Currently, Bengaluru has more than 67,000 companies contributing to the Indian IT sector’s economy. The Y2K bug crisis was a big reason behind the booming of Bengaluru’s IT industry. To resolve this issue, the IT companies, finance, and banking sectors around the world needed to reprogram their existing computer programs and for this, they needed a huge number of IT pro-fessionals. And for this, Bengaluru was the best place for these companies due to the availability of a large number of skilled workers with low labour cost. India and the USA also came together to help each other due to the ‘Follow the Sun’ model of the IT industry. Now big companies like Infosys, Wipro, IBM, Intel, HP, Oracle, and Google operate from Bengaluru. Bengaluru is home to around 35% of India’s IT employees. As per the fiscal report of 2016-17, Bengaluru ac-counted for around 38% of the total IT exports from our country, worth around $45 billion, and provided employment to approximately ten lakh people directly and around thirty lakh people indirectly. Bengaluru city has become an important growth engine for India. Another city, Hyde-rabad, has also boomed, especially due to its IT industry, and is popularly called Cyberabad. Hy-derabad has emerged as an important innovation hub in the country in recent times.
There have been a large number of futuristic innovations that have taken place in Hyderabad. Big companies like IBM, Facebook, Microsoft, Google, Yahoo, and Dell have branches in Hyderabad. Hydera-bad has progressed in the field of bioinformatics as well. It has become the second largest city in IT technology exports from India. Similarly, Chennai is another city that has become a major IT hub as well, with IIT Madras giving impetus to the knowledge pool of IT professionals. Tidel Park and Zoho Park have contributed immensely to attracting investments in the IT sector. Al-most 14% of products made by programming organizations are manufactured in Chennai. Simi-larly, the Rajiv Gandhi Infotech Park in Pune is a dedicated IT park spread over 2800 acres and has contributed to Pune becoming another major IT hub in India. Noida in Uttar Pradesh is another IT hub in India and has become the largest IT hub in North India. Service outsourcing and software development companies have their bases in Noida. Gurgaon is another such IT hub which has the offices of the world’s famous MNCs and BPOs. India has a share of around 55% in the global outsourcing market for the IT industry. The service sector currently contributes around 54% of India’s GDP, and the IT sector has a big role to play.
These IT hubs in India have not only established themselves as growth engines of the IT industry but also the growth engines of their respective states and India’s economy. COVID-19 has digi-tized each sector of India in an unprecedented manner. India’s education sector, government ser-vices sector, health sector, and finance sector are rapidly getting digitized day by day, contribut-ing to the growth of Digital India. In the fiscal year 2022-23, the IT industry contributed around 7.4% to India’s GDP. The estimated revenue of the IT industry during the fiscal year 2023-24 is around $245 billion, of which $51 billion will be domestic revenue and $194 billion will be ex-port revenue, according to the estimation made. Karnataka, Maharashtra, Telangana, and Tamil Nadu are the top four states in India in terms of generating revenue from IT exports. In the year 2023, the IT industry will have attracted around $9.39 billion in FDI. This industry provides around 5.34 million direct and indirect jobs. The IT hubs not only create mass job opportunities for the youth of India but also have a multiplier effect on the Indian economy and its growth.
India’s Tier 2 and Tier 3 cities are also competing now to become IT hubs. But for India to con-tinue being the home of IT companies, more strategic and concrete planning needs to be done. For India to keep up its dominance in the IT sector, it needs to revamp its IT infrastructure, like high-speed internet, modern, well-equipped IT parks, reliable power supply, etc. India needs to make some improvements in the STEM (Science, Technology, Engineering, and Mathematics) educational field. It isn’t difficult to get engineers in India nowadays, but a highly skilled engi-neer is difficult to get, and this has been due to the loopholes in the educational system of India. Even IT professionals need to be updated with the latest IT developments so that they can stay relevant in their field. So, India needs to run upskilling and reskilling programmes for its work-force.
India spends only 0.7% of its GDP on research and development, which needs to increase. The more innovations and technologies there are, the more the IT industry will boom. Existing cyber-security infrastructure should also be strengthened to prevent any possible cyber attacks. The In-dian government has taken steps towards promoting the IT industry. Special Economic Zones have been created for easier clearances and the simplification of procedures. The National Policy on Software Products, 2019 has been approved by the GOI to boost the software product hub of India. The New Generation Incubation Scheme has also contributed to creating a vibrant soft-ware product ecosystem as well as generating new employment opportunities. But much more needs to be done by the government for India to reach the target of $2 trillion in exports by 2030, as the IT industry will play a pivotal role in achieving this target.
