History Of Information Technology In India And Why The Recent Boom In It Sector In India?


This article explains the history of IT and how the IT sector evolved in India. Why is there such a boom in the IT industry in India currently? What is the salary of the IT professionals in India? How did the economic reforms in 1991 change the IT scenario in India? Answers to all such questions are answered in this article. Read this article to get all the details regarding the IT sector in India.

History of IT sector in India before 1991


In 1965, immigration laws in USA were modified and the restrictions on immigrants were reduced considerably. As a result a lot of Indian professionals migrated for research opportunities in USA. The IT revolution in USA and the much fancied Silicon Valley in the US during the 80s and 90s could not have been possible without the work of these migrated Indians. What this migration did for the Indian IT industry was creating innumerable opportunities in the USA in the IT sector. Due to the fast growing IT sector in USA, there was a need for IT professionals outside USA. India had a huge number of educated people and the education in India being in English, there was a large population of English speaking technically strong people in India. Hence outsourcing of work started gaining momentum and this led to the huge boom in the IT sector in India, whose most of the work is exporting software and software services to the US and other overseas clients.

Tata Consultancy Services (TCS) was started by the TATA group for software development services in India in 1968. TCS started the software services by developing punched card facilities for TATA steel employees (TSICO). The first overseas client for TCS was Burroughs Corporation, United States. The job of TCS was to write software code for the Burroughs machines in 1974. With word of mouth, TCS grabbed a number of projects, small and big during the following years and today TCS is India's top IT company with a turnover of more than $10 billion. In 1966, Azim Premji became the chairmen of the large company WIPRO and the focus of WIPRO was concentrated on the IT services sector. Patni Computer Systems started developing software and providing services since the beginning of the company in 1972 (At that time it was named Data Conversion Inc). In 1981, Infosys was founded by Narayan Murthy and his colleagues. Infosys was completely committed towards providing quality software services and also developed an IT business model which was later followed by most of the IT companies in India.

The Indian economy during this period was completely controlled by the Indian Government and there were strict restrictions and regulations for private business entities in India. Hence there was no major growth in the IT sector in India till 1991.

Economic reforms in 1991 and development of IT sector in India


The Indian government had strict control over the private business entities in India before liberalisation of economy in 1991. Moreover, the wide area networks and internet lines were completely controlled by the central government. As a result, the Indian IT sector was totally held back due to these restraints on the functioning of the software services providers.

The first major IT reform by the Indian Government was the creation of corporation called Software Technology Parks of India (STPI). This corporation provided satellite links to major IT developers enabling them to transmit the work done in India directly abroad. This reduced the costs incurred to the Indian IT companies as well as helped the clients in US trust Indian industries and go for outsourcing. Finance minister, Dr. Manmohan Singh, introduced the major economic reforms in 1991 to solve the debt problem created during that time. As per these economic reforms the internation integration became possible. The huge restrictions on overseas business were lifted and foreign investments were welcomed. As a result, the IT industry in India became free and the business of outsourcing would finally gain momentum with more and more clients and enterprises going for outsourcing of IT. Also, the inception of Windows and other user friendly operating services made the PC experience even more simple and less time consuming. Coupled with development of high level programming languages like Basic, C and others, the Indian IT brains had the perfect platform to rise in the global arena. The Indian IT sector boomed and growed at gain of nearly 50% every year.

Another major event for Indian IT industry post the 1991 reforms was the Y2K bug. Fear of a complete breakdown of computer services, the US corporations outsourced all the equipment and upgrading work to Indians. The task of rectifying the Y2K bug was thrown to the Indians and as a result the modification of all the codes and softwares, which were initially designed till a date of 1999 was to be edited and huge work was outsourced to the Indian IT industries. The Indian IT industry has helped provide a national GDP of more than 6% since these economic reforms took place 20 years ago and today, India is known as the IT hub of the world.

National Task Force, NTP and IT Act, 2000 helped IT sector grow in India


The NDA(National Democratic Alliance) government, under the leadership of prime minister Atal Bihari Vajpayee, included the development of IT as the top priority in their long term agenda. Indian National Task Force was formed for this purpose which overtook the development of IT services in large and small IT enterprises in India. The National Task Force, within 3 months, provided a detailed report on the Indian IT and technological industries with more than 100 recommendations which would help improve the IT services in India. A swift action plan by the Central Government towards IT services growth was executed and all the recommendations were acted upon sooner than later. The result of these efforts from the Indian Government bore fruit with the IT exports touching more than $50 billion. Indian economy was no longer that of a developing nation, but at par with those of the developed nations in the world.

The New Telecommunications Policy, 1999 (NTP 1999) helped free the telecommunications sector in India. This helped availability of the infrastructure for the telecommunication. The satellites, towers and other telecom related businesses were no longer owned by the Central Government. The entry of private sector in these departments helped the telecom sector grow rapidly resulting the boom in IT sector in India eventually. The growth of IT is totally dependent on the innovation and development of telecom industry. The Information Technology Act 2000 provided legal recognition of the electronic documents, digital signatures, offences and contraventions. This helped a long way in striking deals with US clients as no longer the person to person meeting was required for finalisation of business deals.

Salary details of professionals in IT industries in India


There is a huge hype regarding the salaries of IT professionals in India. One may hear a salary as low as Rs. 2500 per month to a salary as high as Rs. 1 lakh per month for software professionals. Hence there is no way there can be a generalisation of the salaries of the IT professionals. The salaries are dependent on the skills of the professionals, qualification of the employees and the experience of the employees. I have enlisted average salaries of IT professionals based on the experience and designation. This list cannot be taken as the standard salary packages for IT professionals an the information cannot be used to demand equivalent salaries from IT employers. It is just an average estimate of the salaries only for comparison purpose.

  • Average Salary of IT professional having experience of 0-2 years: Rs. 2-4 lakh per year

  • Average Salary of IT professional having experience of 2-5 years: Rs. 4-7 lakh per year

  • Average Salary of IT professional having experience of 5-8 years: Rs. 7-12 lakh per year

  • Average Salary of IT professional having experience of 8-12 years: Rs. 12-18 lakh per year

  • Average Salary of IT professional having experience of more than 12 years: More than Rs. 18 lakh per year


  • Conclusion


    The IT sector in India today outsources software services across the world and because of the economic reforms in 1991 and the various liberalisation acts introduced by the subsequent Governments helped the IT sector in India grow immensely. The IT sector has provided employment to more than 30 lakh Indians and has become a source of income for more than 2 crore Indians indirectly. Because of the IT sector, Indian middle class has attained an important status and standard of living has increased considerably in India because of the IT revolution.


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