ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Performance of Indian Information Technology Sector

An Analysis of Two Decades

In this age of computers, the development and advancement of the information technology sector can push a developing economy into the developed countries category. The present study found that the IT sector of India has experienced boom and prosperity during the first decade of this century. Therefore, the supportive policies and acts, such as the Information Technology Act, 2000, National Broadband Policy, 2004, and Special Economic Zones Act, 2005 have favourable impact on the information technology sector. Meanwhile, it is moving towards recession in the second half of the second decade of this century. However, the study confirms good performance of India’s information technology sector in terms of its contribution to the gross domestic product, foreign exchange earnings, and employment generation in the Indian economy.


India is an emerging economy fuelled by tech-savvy humanpower and a world-class information technology (IT)1 ­industry (Bhatnagar 2006). The sector took advantage of the global prospects and took off once the government provided some basic infrastructure and human capital development roughly adequate for software development and IT-enabled services (Singh 2012). India had no driving strategy or structure for computer/software technology after independence until 1970. During this time, however, the government took many steps to begin the design and development of computers in educational institutions. The Bhabha Committee, formed in 1963, stressed the role of electronics and computers in India’s growth. The Government of India (GoI) created the Dep­artment of Electronics (DoE) in 1970 to promote the growth of electronics and computers in India, based on the recommendations of the Bhabha Committee. For the first time, the government made a new software scheme in 1972, enabling the import and export of software and hardware, and thus making a breakpoint in the evolution of the Indian IT industry. In 1974, Tata Consultancy Services (TCS) received its first international client, Burroughs Corporation from the United States (US).

The IT industry has achieved phenomenal growth during the post-economic reform period (Singh and Kaur 2017). The IT industry contributed `63 billion in 1994–95 in the gross domestic product (GDP) of India and it increased to `1,276 billion in 2004–05 (Allad 2015). In terms of scale, India’s IT industry has not only made significant progress in the past century, but also has expanded at an unprecedented pace with the start of the present century. All the sub-sectors of this industry (hardware products have relatively seen less progress) have made strides in revenue growth in the last two decades, and thus fuelled the growth of the Indian economy (Sirohi 2020).

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Updated On : 14th Mar, 2022
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