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Information Technology Working Group on Information Technology TFYP WORKING GROUP Sr. No. 73/2001 REPORT OF THE WORKING GROUP ON INFORMATION TECHNOLOGY FOR THE FORMULATION OF THE TENTH FIVE YEAR PLAN GOVERNMENT OF INDIA PLANNING COMMISSION November, 2001 Working Group on Information Technology Foreword The advancement in information technology has a profound impact in country's economy, thus the quality of human life. The convergence of computer, communications and content creates tremendous opportunities as well as challenges. The IT revolution will be of much greater significance than the Industrial Revolution of 17th century. This revolution has opened up new possibilities of economic and social transformations from which both developed and developing countries can potentially benefit. In the context of preparation of the Tenth Five Year Plan (2002-07), the Government has constituted a Working Group on Information Technology sector to make recommendations on the various policy matters to enable to formulate the Tenth Five Year Plan for Communication and Information sector. This report is the result of efforts of the Members of the Working Group drawn from a cross section of the IT community and seven specialized, subject specific Study Teams. India does have enormous opportunities emerging from globalization and consequent lowering of tariff barriers. These need to be consolidated through brand equity, marketing contacts, upgrading of manpower skill base, moving up the value chain, better infrastructure and economies of scale through larger domestic market base, R&D especially on e-Security aspects and strengthening of hardware sector. There is urgent need to strengthen IT infrastructure both for software exports and citizen centric interface. Distance learning is the need of the hour to spread education and regular upgradation of skills. This will need interconnecting all schools and colleges in the country (60,000 approx.) through a network with initial support from the Government. This will promote IT among masses and minimize digital divide. If Indian manufacturing companies have to compete globally, we need to have a clear and comprehensive national policy for hardware manufacturing industry. The basic philosophy to induce manufacturing of electronics and IT products in India should be to provide world-class environment. I would like to thank all members of the Working Group and Study Teams for their valuable inputs and Shri Y.S. Bhave, Member Convenor and his team (S/Shri R.S. Buttoo, Rajiv Rastogi, R.K. Marwah, T. Santosh) for preparing this Report. Rajeeva Ratna Shah Chairman - Tenth Plan Working Group on Information Technology & Secretary, Ministry of Information Technology Working Group on Information Technology Preface As a part of the exercise relating to the formulation of the Tenth Five Year Plan (2002-07) for Communication and Information Sector, the Planning Commission had constituted a Working Group on Information Technology under the Chairmanship of Secretary, Ministry of Information Technology. The Working Group had 32 Members drawn from various Government Department and Organizations, State Governments, Industry Associations, R&D Institutions and Industry. The Terms of Reference of the Working Group are given in the Appendices. For getting a wider participation from different Industry Sectors, Industry Associations, R&D Laboratories, Experts and other Intellectuals, the following seven Study Teams were constituted: 1. Computer Software and Services, 2. Application Development, 3. Infrastructure, 4. Manufacturing Sector, 5. Electronics and IT Policy & Procedures, 6. Human Resource Development, and 7. Research & Development. The Terms of Reference and Composition of various Study Teams are given in the Appendices of the Report. The reports of the Study Teams in abridged form are included in this Report. However, full reports will be brought out separately. Working Group on Information Technology Contents Executive Summary............................................................................................ 1 1. Performance during Ninth Plan ............................................................... 6 2. Tenth Plan - A Perspective...................................................................... 20 3. Computer Software & IT Services........................................................... 28 4. IT Infrastructure...................................................................................... 65 5. Application Development ....................................................................... 92 6. Manufacturing Sector.............................................................................. 110 7. Policies & Procedures............................................................................. 140 8. Human Resource Development ............................................................... 161 9. R&D for Information Technology........................................................... 187 10. Appendices ............................................................................................. 208 Working Report on Information Technology Executive Summary Global IT products and services market is at an estimated size of $ 1.5 trillion today. It is estimated that the share of IT in the GDP of nations will exceed that of any other industry in the next ten years. There is a great deal of inter-dependency even as fiercer competition emerges in a rapidly growing market. It is increasingly a border less world, thanks to the interactivity provided by the Internet and telecom infrastructure. India has to recognize this reality and make use of the best brains that exist in the NRI community. Foreign companies are being acquired by software companies in the country even while global MNCs are setting up their shop here. All these need to be encouraged. We need to ensure that India is a net gainer in the process and substantial foreign exchange, jobs and productivity gains are achieved through IT. Competitors and collaborators have to be identified and suitable strategy evolved. On one side, India has a unique opportunity to emerge as an IT leader among developing nations. On the other side, India has the opportunity to increase its share in the trade with advanced countries substantially. Sectors of IT which do not recognize this will perish. Prime Minister has observed that Information Technology is an area where India can quickly establish global dominance in terms of wealth creation and generation of high quality employment. Ambitious targets have been laid down by Nation IT Task Force, as well as by industry. To realize these targets, Ministry of Information Technology is of the view that beside providing proactive support to industry in terms of WTO compatible custom duty and import policy frame work for attracting investment and providing competition, it is also necessary to enhance domestic consumption of IT products and services by taking IT to masses. In this regard, it is proposed to: i) spread computer literacy at various levels, ii) develop products and services needed by masses, iii) expand the network of Computer Information Centres (CIC) through-out the country and also utilize existing base of PCO’s into internet kiosks, iv) facilitate industry to go global through e-commerce, v) develop tools to enable multilingual usage of computers, and vi) provide thrust to e-governance at both centre and state levels. Software For the past decade, Indian software industry has been growing at a consistently high rate of over 50% annually. During the IX Plan, the overall software industry is estimated to grow at a CAGR of 52%. The software export industry grew at a CAGR of 57%. Indian IT software and services of US $ 6.2 billion exports accounted for 14 % of India’s total exports of US $ 44 billion during 2000-01. It is expected that by the year 2008, Indian IT software and services exports targeted at US $ 50 billion, which would account for 35 % of India’s total exports. The IT industry in India is estimated to be over US $ 87 billion (Rs.3,91,500 crores) by 2008. By 2008, it is expected to become single largest contributor to the GDP of the country. 1 Working Report on Information Technology India, being a large country, has a domestic market with a vast potential. By the end of Tenth Plan, the software export and domestic software turnover is estimated to be Rs. 200,000 crores and Rs. 67,000 crores per annum respectively. There are huge opportunities available throughout the globe. India has the potential to become IT superpower; it will require cohesive concerted efforts from Government and IT Industry to achieve the ambitious plans and multi-pronged targets. India’s rise to fame in the international software and services marketplace is commendable. Through an orientation and adherence to high quality processes, a vast English speaking manpower base, expertise on state-of-the-art hardware and software platforms, and cost competitiveness, the software industry has established itself in the global segment. For the software industry, the issues of concern are related to Telecom infrastructure, Bandwidth availability, access to international gateways, inter-connectivity across networks, Venture Capital, Labour Laws, physical bonding, depreciation on PCs, legality of electronic contracts, taxation and security aspects of e-Commerce, IT Focus in technical education and promotion of e-Governance in Government. IT infrastructure is very important for Defence Services. All the services are having their own
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