rmation imports of information technology products, relaxation of controls

rmation
technology (IT) industry in India has been one of the most significant growth
contributors for the Indian economy. The industry has played a significant role
in transforming India’s from a slow moving bureaucratic economy to a land of
innovative entrepreneurs and a global player in providing world class
technology solutions and business services it has also played a role in
transforming India from a rural and agriculture-based economy to a knowledge
based economy. Information Technology has made possible information access at
gigabit speeds. It has made tremendous impact on the lives of millions of
people who are poor, marginalized and living in rural including all the
topographies. Internet has made revolutionary
changes with possibilities of e-government measures like e-health,
e-education, e-agriculture, etc. Today, whether its filing Income Tax returns
or applying for passports online or railway e-ticketing, it just need few
clicks of the mouse. India’s IT potential is on a steady march towards global
competitiveness, improving defense capabilities and meeting up energy and
environmental challenges amongst others. IT-ITeS sector in India, with the main
focus on increasing technology adoption, and developing new delivery platforms,
has aggregated revenues. After the economic
reforms of 1991-92, major fiscal incentives provided by the Government of
India and the State Governments, like, liberalization of external trade,
elimination of duties on imports of information technology products, relaxation
of controls on both inward and outward investments and foreign exchange,
setting up of Export Oriented Units (EOU), Software Technology Parks (STP), and
Special Economic Zones (SEZ), has enabled India to flourish and acquire a
dominant position in world’s IT scenario. In order to alleviate and to promote
Indian IT industry, the Government of India had set up a National Task Force on
IT and Software Development to examine the feasibility of strengthening the
industry. Venture capital has been the main source of finance for software
industry around the world. The Government of India is also actively providing
fiscal incentives and liberalizing norms for FDI and raising capital abroad. In 2011, India’s growth has
reflected new demand for IT goods and services, with a major surge in the use
of private and public cloud and mobile computing on a variety of devices and
through a range of new software applications. Foreign technology induction is
also encouraged both through FDI and through foreign technology collaboration
agreements. India welcomes investors in Information Technology sector. Greater
transparency in policies and procedures has made India an investor friendly
platform. A foreign company can hold equity
in Indian company’s up to 100%.
Challenges Cyber security and quality management are few key areas of concern
in today’s information age. To overcome such concerns in today’s global IT
scenario, an increasing number of ITBPO companies in India have gradually
started to emphasize on quality to adopt global standards such as ISO 9001 (for
Quality Management) and ISO 27000 (for Information Security). India aims to
transform India into a truly developed and empowered society by 2020. However,
to achieve this growth, the sector has to continue to re-invent itself and
strive for that extra mile, through new business models, global delivery,
partnerships and transformation. A collaborative effort from all stakeholders
will be needed to ensure future growth of India’s IT-ITeS sector. India is now
one of the biggest IT capitals in the modern world and has presence of all the
major players in the world IT sector. HCL, Wipro, Infosys and TCS are few of
the household names of IT companies in India. Future prospects Globalization
has had a profound impact in shaping the Indian Information Technology
industry. Over the years, verticals like manufacturing, telecom, insurance,
banking, finance and lately the retail, have been the growth drivers for this
sector. But it is very fast getting clear that the future growth of IT and IT
enabled services will be fueled by the verticals of climate change, mobile
applications, healthcare, energy efficiency and sustainable energy. The near
future of Indian IT industry sees a significant rise in share of technology
spend as more and more service providers both Indian and global target new
segments and provide low cost, flexible solutions to customers.

The IT sector has also led to massive employment
generation in India. The industry continues to be a net employment, thus directly employing about 2.8 million people and
indirectly employing 8.9 million, making it a dominant player in the global
outsourcing sector. However, it continues to face challenges of competitiveness in the globalized and modern world,
particularly from countries like China and Philippines. The IT sector in India
has paved employment for many people. The Indian IT market currently focuses on
providing low-cost solutions in the services business of global IT. The
presence of Indian companies in the product development business of global IT
is very meager, however, this number is slowly on the rise. The other prominent
trend is that IT jobs, once confined to Bangalore, and are slowly starting to
experience a geographical diffusion into other cities like Chennai, Hyderabad
and Pune. According to Google
estimates, the Indian community of developers will be the largest in the world
by 2018

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India’s growing stature in the Information Age enabled it
to form close ties with both the United States and the European Union. However,
the recent global financial crises have deeply impacted Indian IT companies as
well as global companies.

The fundamental structural changes in the IT services
such as

–         
Cloud
computing

–         
Proliferation
of Social media

–         
Big
data

–         
Analytics

All leading to digital
services and digital economy,
many of the leading companies in India’s IT sector reported lower headcounts in
their financial results.

 

Importance of Information Technology in Modern Commercial
Scenario:

 

It is an accepted
fact that the most important scientific and technological development of
contemporary history is Information Technology (IT). IT has pervaded all walks
of modern life and society so profoundly that the modern society is
colloquially known as Information Society. It has revolutionized the
development process itself by influencing its manifold dimensions be it
economic, social, political, cultural, environmental, ethical, behavioral, etc.
The contribution of IT to Gross Domestic Product (GDP), employment generation,
market diversification, operation of free markets, foreign exchange earnings,
poverty reduction, environmental development, economic globalization and
liberalization, women’s empowerment and gender equity are evidences to what
extent it influences the economy. It fosters socio-cultural development and the
concept of global village & borderless society by enhancing the promotion
of social cohesion, harmony and integration, spread of education and knowledge
through distance learning in cost effective manner. The degree of contribution
of the IT to economies and societies vary according to their stage of
development (developed, developing or underdeveloped), nature of political
economy, availability of appropriate complementary infrastructure, etc.

 

 

Challenges
faced by the IT sector in India

 

• The IT sector of India needs to discard its old model
of service providing and operations. The old model popularly known as the ADM
(Application, Development and Maintenance) is obsolete. It is imperative that
the IT sector resorts to the new model of ‘outcome based billing’ and fixed
contract based services

• The maturity of the offshore models has created a
demand among the customers for a close proximity of the service providers which
may even involve setting up of near shore stations for support.

• There is a stiff competition from China, Philippines
and Eastern Europe which are also proving to be low cost and competitive
countries. It is estimated that by 2020 they will be a 20% stakeholder in the
global IT export scenario.

• A shrinking talent pool in our country is also largely
affecting the IT sector. The number of employable graduates in the business
sector is as low as 10% to 15% while that of qualified and employable engineers
is 26% only.

• IT giants like IBM and Accenture have now opened up
their own centers in India with the same target audience as that of the Indian
IT Sector.

• The proposed development of the tier 2 and 3 cities has
not gone as planned so the entire IT sector is stagnated in the 9 major cities.

• It is imperative that the IT sector of India should
focus on the new emerging trends like Social media, Mobility, Analytics and
Cloud (SMAC)

• There is a need for a total revamping of the
infrastructure of the IT sector which unfortunately is pending due to fund
unavailability. Fund shortage is also affecting the medium and small IT
enterprises which need a basic financial injection for their start-up.

 

 

 

 Information
Technology Industry Profile

 

Information
technology (IT) industry in India has been one of the most significant growth
contributors for the Indian economy. The industry has played a significant role
in transforming India’s from a slow moving bureaucratic economy to a land of
innovative entrepreneurs and a global player in providing world class
technology solutions and business services it has also played a role in
transforming India from a rural and agriculture-based economy to a knowledge
based economy. Information Technology has made possible information access at
gigabit speeds. It has made tremendous impact on the lives of millions of
people who are poor, marginalized and living in rural including all the
topographies. Internet has made revolutionary
changes with possibilities of e-government measures like e-health,
e-education, e-agriculture, etc. Today, whether its filing Income Tax returns
or applying for passports online or railway e-ticketing, it just need few
clicks of the mouse. India’s IT potential is on a steady march towards global
competitiveness, improving defense capabilities and meeting up energy and
environmental challenges amongst others. IT-ITeS sector in India, with the main
focus on increasing technology adoption, and developing new delivery platforms,
has aggregated revenues. After the economic
reforms of 1991-92, major fiscal incentives provided by the Government of
India and the State Governments, like, liberalization of external trade,
elimination of duties on imports of information technology products, relaxation
of controls on both inward and outward investments and foreign exchange,
setting up of Export Oriented Units (EOU), Software Technology Parks (STP), and
Special Economic Zones (SEZ), has enabled India to flourish and acquire a
dominant position in world’s IT scenario. In order to alleviate and to promote
Indian IT industry, the Government of India had set up a National Task Force on
IT and Software Development to examine the feasibility of strengthening the
industry. Venture capital has been the main source of finance for software
industry around the world. The Government of India is also actively providing
fiscal incentives and liberalizing norms for FDI and raising capital abroad. In 2011, India’s growth has
reflected new demand for IT goods and services, with a major surge in the use
of private and public cloud and mobile computing on a variety of devices and
through a range of new software applications. Foreign technology induction is
also encouraged both through FDI and through foreign technology collaboration
agreements. India welcomes investors in Information Technology sector. Greater
transparency in policies and procedures has made India an investor friendly
platform. A foreign company can hold equity
in Indian company’s up to 100%.
Challenges Cyber security and quality management are few key areas of concern
in today’s information age. To overcome such concerns in today’s global IT
scenario, an increasing number of ITBPO companies in India have gradually
started to emphasize on quality to adopt global standards such as ISO 9001 (for
Quality Management) and ISO 27000 (for Information Security). India aims to
transform India into a truly developed and empowered society by 2020. However,
to achieve this growth, the sector has to continue to re-invent itself and
strive for that extra mile, through new business models, global delivery,
partnerships and transformation. A collaborative effort from all stakeholders
will be needed to ensure future growth of India’s IT-ITeS sector. India is now
one of the biggest IT capitals in the modern world and has presence of all the
major players in the world IT sector. HCL, Wipro, Infosys and TCS are few of
the household names of IT companies in India. Future prospects Globalization
has had a profound impact in shaping the Indian Information Technology
industry. Over the years, verticals like manufacturing, telecom, insurance,
banking, finance and lately the retail, have been the growth drivers for this
sector. But it is very fast getting clear that the future growth of IT and IT
enabled services will be fueled by the verticals of climate change, mobile
applications, healthcare, energy efficiency and sustainable energy. The near
future of Indian IT industry sees a significant rise in share of technology
spend as more and more service providers both Indian and global target new
segments and provide low cost, flexible solutions to customers.

The IT sector has also led to massive employment
generation in India. The industry continues to be a net employment, thus directly employing about 2.8 million people and
indirectly employing 8.9 million, making it a dominant player in the global
outsourcing sector. However, it continues to face challenges of competitiveness in the globalized and modern world,
particularly from countries like China and Philippines. The IT sector in India
has paved employment for many people. The Indian IT market currently focuses on
providing low-cost solutions in the services business of global IT. The
presence of Indian companies in the product development business of global IT
is very meager, however, this number is slowly on the rise. The other prominent
trend is that IT jobs, once confined to Bangalore, and are slowly starting to
experience a geographical diffusion into other cities like Chennai, Hyderabad
and Pune. According to Google
estimates, the Indian community of developers will be the largest in the world
by 2018

India’s growing stature in the Information Age enabled it
to form close ties with both the United States and the European Union. However,
the recent global financial crises have deeply impacted Indian IT companies as
well as global companies.

The fundamental structural changes in the IT services
such as

–         
Cloud
computing

–         
Proliferation
of Social media

–         
Big
data

–         
Analytics

All leading to digital
services and digital economy,
many of the leading companies in India’s IT sector reported lower headcounts in
their financial results.

 

Importance of Information Technology in Modern Commercial
Scenario:

 

It is an accepted
fact that the most important scientific and technological development of
contemporary history is Information Technology (IT). IT has pervaded all walks
of modern life and society so profoundly that the modern society is
colloquially known as Information Society. It has revolutionized the
development process itself by influencing its manifold dimensions be it
economic, social, political, cultural, environmental, ethical, behavioral, etc.
The contribution of IT to Gross Domestic Product (GDP), employment generation,
market diversification, operation of free markets, foreign exchange earnings,
poverty reduction, environmental development, economic globalization and
liberalization, women’s empowerment and gender equity are evidences to what
extent it influences the economy. It fosters socio-cultural development and the
concept of global village & borderless society by enhancing the promotion
of social cohesion, harmony and integration, spread of education and knowledge
through distance learning in cost effective manner. The degree of contribution
of the IT to economies and societies vary according to their stage of
development (developed, developing or underdeveloped), nature of political
economy, availability of appropriate complementary infrastructure, etc.

 

 

Challenges
faced by the IT sector in India

 

• The IT sector of India needs to discard its old model
of service providing and operations. The old model popularly known as the ADM
(Application, Development and Maintenance) is obsolete. It is imperative that
the IT sector resorts to the new model of ‘outcome based billing’ and fixed
contract based services

• The maturity of the offshore models has created a
demand among the customers for a close proximity of the service providers which
may even involve setting up of near shore stations for support.

• There is a stiff competition from China, Philippines
and Eastern Europe which are also proving to be low cost and competitive
countries. It is estimated that by 2020 they will be a 20% stakeholder in the
global IT export scenario.

• A shrinking talent pool in our country is also largely
affecting the IT sector. The number of employable graduates in the business
sector is as low as 10% to 15% while that of qualified and employable engineers
is 26% only.

• IT giants like IBM and Accenture have now opened up
their own centers in India with the same target audience as that of the Indian
IT Sector.

• The proposed development of the tier 2 and 3 cities has
not gone as planned so the entire IT sector is stagnated in the 9 major cities.

• It is imperative that the IT sector of India should
focus on the new emerging trends like Social media, Mobility, Analytics and
Cloud (SMAC)

• There is a need for a total revamping of the
infrastructure of the IT sector which unfortunately is pending due to fund
unavailability. Fund shortage is also affecting the medium and small IT
enterprises which need a basic financial injection for their start-up.