(27 February 2007 8:20 pm)

NEW DELHI: The Government has formulated a proposal to establish 100,000 Common service Centres (CSCs) in rural areas, which will serve not only as the front-end for most government services but also as a means to connect the citizens of rural India to the World Wide Web.

According to the Economic Survey 2006-07 tabled in Parliament today by Finance Minister P Chidambaram, the scheme will be implemented through Public Private Partnership (PPP). An outlay of Rs. 57.42 billion has been approved of which the share of the Central Government and the State Governments would be Rs 8.56 billion croe and Rs 7.93 billion, respectively. The balance would be invested by the private sector.

Listing the Policy Initiatives For Electronics and IT Sector, the Survey says that In order to ensure that the benefits of IT reach the common man, the Government has initiated a move to make available tools and fonts in various Indian languages freely to the general public. Tamil, Hindi and Telugu software tools and fonts have already been released. All Indian languages are expected to be covered in the next one year.

A proposal for Electronics and IT Hardware Manufacturing Policy is also under consideration which aims to rationalize tariff structure on capital goods and inputs, unify manufacturing for domestic market and exports, facilitate registration of international patents, transfer state-of-the-art technology (TOT) and enhance Research and Development.

The Information Technology Amendment Bill has been introduced in the Parliament on 15 December, 2006 to put in place technology applications, security practices and procedures relating to such applications. Furthermore, it addresses the issue of technological neutrality in IT laws as recommended by UNCITRAL Model Law on Electronic Signature.

The Survey noted that the Indian IT-enabled Services and Business Process Outsourcing (ITES-BPO) have demonstrated their superiority, sustained cost advantage and fundamentally-powered value proposition in the international market. The software and ITES exports from India grew from $12.9 billion (Rs 582.4 billion) in 2003-04 to $17.7 billion (Rs 782.3 billion) in 2004-05. Software and ITES exports from India estimated at $23.4 billion during 2005-06 was up 32 per cent from the previous year.

This sector is growing with Indian companies expanding their service offerings, enabling customers to deepen their offshore engagements and shifting from low-end business processes to high-value ones.

While there have been no spectacular achievements in the hardware segment as in the case of the software segment of the IT sector, there has been a steady progress in production and exports of hardware.

Contrary to some popular misperceptions, the growth of the IT and ITES sector has had a salutary effect on the employment scenario with total number of professionals employed in this sector growing from an estimated 284,000 in 1999-2000 to
1,287,000 in 2005-06. The increase in the number of employed person in the sector wasas high as 230,000 in 2005-06 itself. In addition, Indian IT-ITES is estimated to have helped create an additional 3 million job oppurtunities through indirect and induced employment in telecom, power, construction, facility management, IT transportation, catering and other services. Government has taken several steps to further enhance this industry.

With strong demand over the past few years placing India among the fastest growing IT markets in the Asia-Pacific region, the industry’s contribution to GDP rose from 1.2 per cent in 1999-2000 to an estimated 4.8 per cent in 2005-06. Indian companies are enhancing their global services delivery capabilities through a combination of greenfield initiatives, cross-border mergers & acquisitions, partnerships and alliances with local players. This is enabling them to execute end-to-end delivery of new services. Global software giants such as Microsoft, Oracle and SAP, have established their captive development centres in India.

A majority of the companies in India have already aligned their internal processes and practices to international standards such as ISO, CMM, and Six Sigma. This has helped establish India as a credible sourcing destination. As of December, 2006, over 400 Indian companies have acquired quality certifications with 82 companies certified at SEI CMM Level 5 – higher than any other country in the world.