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

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IT and the Economy

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India’s information technology sector is under pressure to reinvent itself. Infosys’s guidance for the current financial year, that it expects revenues to grow at 30 per cent, in the wake of three digit growth in the last several years, summarises the problems faced by the IT sector. In order to sustain its phenomenal momentum, Indian IT must not only move up the value chain but also reorient itself away from the American market and seek fresh markets in Europe and Asia, particularly in India itself.

Information technology is important for India’s policy-makers not just because it is a fast growing sector in which Indian firms and Indian professionals seem to be doing exceptionally well or because of its great potential to boost productivity across the board but also because it has become the new great white hope of the Indian middle class. Entry into the industry depends on hard work and merit, it offers not only well paying jobs that take even lower middle class youth around the world and up the managerial ladder but also scope for entrepreneurship largely unaffected by the inspector raj that bedevils traditional industry. The sterling performance of Indian software professionals and entrepreneurs in Silicon Valley has convinced the world that India and Indians have an edge over the rest when it comes to IT. Consequently, developed country capitals have, for the first time, started viewing India as a potential partner. The wooing of Indian software professionals by country after country has given the Indian middle class a new sense of self-esteem and India new diplomatic leverage.

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