Indian Information Technology Sector Performance: A Two-Decade Analysis


In the information age, the development and advancement of the information technology sector can push a developing economy into the category of developed countries. This study revealed that India’s IT sector boomed and prospered in the first decade of this century. Therefore, supporting policies and laws, such as the Information Technology Act 2000, the National Broadband Policy 2004 and the Special Economic Zones Act 2005 have a favorable impact on the sector. information technologies. Meanwhile, it is heading for recession in the second half of the second decade of this century. However, the study confirms the good performance of the Indian information technology sector in terms of contribution to gross domestic product, foreign exchange earnings and job creation in the Indian economy.

India is an emerging economy fueled by a cutting-edge workforce and world-class information technology (IT)1 industry (Bhatnagar 2006). The sector took advantage of the global outlook and took off once the government provided roughly adequate basic infrastructure and human capital development for software development and IT services (Singh 2012). India had no strategy or driving 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, highlighted the role of electronics and computers in India’s growth. The Government of India (GoI) established 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 introduced a new software program in 1972, allowing the import and export of software and hardware, and thus marking a halt in the evolution of the Indian computer industry. . In 1974, Tata Consultancy Services (TCS) received its first international client, Burroughs Corporation of the United States (US).

The IT industry has experienced phenomenal growth during the post-economic reform period (Singh and Kaur 2017). The IT industry contributed €63 billion in 1994-95 to India’s Gross Domestic Product (GDP) and it grew to €1.276 billion in 2004-05 (Allad 2015). In terms of scale, the Indian IT industry has not only made significant progress over the past century, but has also grown at an unprecedented rate with the start of the current century. All subsectors of this industry (hardware products grew relatively less) have made progress in revenue growth over the past two decades, and thus fueled the growth of the Indian economy (Sirohi 2020).


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