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					YEAR END REVIEW – 2008
INFORMATION TECHNOLOGY


                                 IT 2008- A Saga of Growth with Quality


       India’s strides in Information Technology continued unabated in 2008 with a host of impressive
achievements. Some of these are outlined below.

IT-ITeS Industry – Growth Performance
          The Indian Information Technology- Information Technology-enabled Services (IT-ITeS) industry
has shown remarkable resilience in the year 2007-08. Continuing on its established track record, the
overall Indian IT-ITeS revenue aggregate is estimated to have grown by over 33 per cent to reach US$ 64
billion in fiscal year {FY} 2007-08 as compared to US$ 48.1 billion in FY 2006-07.

       The total software and services exports is estimated at US$ 40.4 billion in 2007-08, as compared
to US$ 31.4 billion in 2006-07, an increase of 28.3 per cent. ITES-BPO exports are estimated to grow
from US $ 8.4 billion in 2006-07 to US $ 10.9 billion in 2007-08, a year-on-year growth of over 29.8 per
cent.

        Though the IT-BPO sector is export driven, the domestic market is also significant. The revenue
from the domestic market (IT Services and ITES-BPO) is estimated to be US$ 11.7 billion in 2007-08 as
compared to US$ 8.2 billion in 2006-07 an a growth of about 42.7 per cent. BPO demand in the domestic
market has witnessed noticeable growth over the past few years.

        The total IT Software and Services employment is estimated to touch 2.0 million mark in 2007-08
as against 1.63 million in 2006-07, a growth of 22.7 per cent YoY. This represents a net addition of
375,000 professionals to the industry employee base in 2007-08.. The indirect employment attributed by
the sector is estimated to about 8.0 million in 2007-08. This translates to the creation of about 10 million
job opportunities attributed to the growth of this sector.

        As a portion of national GDP, the IT-BPO sector revenues are estimated to have grown from 5.2
per cent in 2006-07 to an estimated 5.5 per cent in 2007-08.

         The industry has set a target of US $ 60 billion in export revenues and US $ 73 – 75 billion in
overall software and services revenues to be achieved by 2010.
         The tables in the annexure underline the robust growth achieved by the Indian IT and electronic
industry.


21000 Common Service Centres Rolled Out
        The CSC Scheme, as approved by the Government of India, envisions CSCs as the front-end
delivery points for Government, private and social sector services to rural citizens of India, in an
integrated manner. The objective is to develop a platform that can enable Government, private and social
sector organizations to align their social and commercial goals for the benefit of the rural population in the
remotest corners of the country through a combination of IT-based as well as non-IT-based services. The
MMP is a part of the core & support infrastructure of NeGP.

         CSC RFPs have been issued for 25 States /UTs. Of these, 23 States / UTs have completed the
Service Centre Agency (SCA) selection process covering 1,02,827 CSCs. Of these 23 States / UTs, 21
States have signed the MSA with the selected SCA up till October, 2008 covering 1,01,682 CSCs. As of
October, 2008, a total of 20,558 CSCs have been rolled out in 14 States. In the remaining States UTs,
action is also progressing well. The implementation of this massive project, which is unprecedented
                                               nd
globally, is likely to be completed by end of 2 quarter of 2009.

Achievements under State Wide Area Network (SWAN)
        As on October 31, 2008, SWAN has been implemented in 5 States / UTs of Haryana, Himachal
Pradesh, Tamil Nadu, Chandigarh and Delhi. Implementation is at an advanced stage in another 9 States
/ UTs and is likely to get completed by December, 2008. Implementation is in progress in another 8
States and is likely to get completed between January, 2009 and May 2009. Bid evaluation is in progress
in Rajasthan while Bid process has been initiated in another 4 States. RFP / Proposal is under review in
another 5 States / UTs while Andaman & Nicobar and Goa have opted out of the scheme.

Capacity Building
                                                          st
          The CB Scheme, approved by the CCEA on 1 January, 2008, envisions establishment of
institutional framework for State Level Strategic decision-making including setting-up of State e-
Governance Mission Team (SeMTs). CB scheme also involves imparting of specialized training,
orientation programme for SeMTs and decision makers (state legislature and senior bureaucrats),
knowledge sharing and bringing in international best practices and Strengthening of Training Institutions
in States.

         A Capacity Building Management Cell (CBMC) has bee set-up in DIT for overall coordination and
implementation of CB Scheme. . The RFP process for ‘Empanelment of Agencies for providing
Temporary Staffing Services for SeMTs’ and for ‘Selection of Agency for providing Recruitment Services’
is at an advance stage of implementation.

Electronics Hardware Manufacturing :
         The Scheme has received very positive response from prospective investors. Sixteen proposals
involving an investment of the order of Rs.1,55,000 crores, over a period of 10 years covering setting up
of Semiconductor fab, LCD panel manufacturing and Solar photovoltaics including polysilicon, have been
received under the Scheme.

STPI
        Software Technology Parks of India was established and registered as an Autonomous Society
under the Department of Information Technology in year 1991 with an objective to implement STP/EHTP
Scheme, set up and manage infrastructure facilities and provide other services like technology
assessment and professional training. During the year 2007-08 three new Centres with High Speed Data
Communication facility became operational at Haldia, Shillong and Patna and as of now a total of 51 STPI
Centres/Subcentres are operational across the country.

Free/Open Source Software
         A National Resource Centre for Free and Open Source Software (NRCFOSS) has been set up in
Chennai jointly with C-DAC and Anna University KBC Research Centre with an objective to contribute to
the growth of Free/Open Source software in India to Research and Development, Human Resource
Development, Networking and Entrepreneurship development as well as to serve as the reference point
for all FOSS related activities in the country. NRCFOSS has developed the portal www.nrcfoss.org.in
using open source content management tool and reflects FOSS events in the country.

        The Centre has come out with Indian GNU/Linux localised distribution termed as Bharat
Operating System Solutions (BOSS). BOSS Linux Desktop Edition version 3.0 with wide Indian
languages support and packages that are relevant for use in government domain has been released in
DIT during September 2008.

Creating Digital Opportunity
         To enable wide proliferation of ICT in Indian languages, DIT has taken a major initiative to make
available Software tools & fonts in various Indian languages freely to the general public. Centre for
Development of advanced computing (C-DAC) has released the CD’s for eleven constitutionally
recognized Indian languages viz. Tamil, Hindi, Telugu, Marathi, Urdu, Punjabi, Oriya, Kannada,
Assamese, Malayalam, and Gujarati, for free mass usage. Bengali is in the pipeline. The process of
consolidation for other languages as well as release of second version of CD for some of the languages
is currently underway.

        Approximately 7 lakh free software tools and Fonts CDs have been distributed to the masses.
Apart from online registration and shipment of CDs, approximately 26 lakh downloads have happened
from the website. Other media of distribution includes magazines, pre-bundled software with OEM, etc.

Information Technology Investment Regions(ITIR)
         There is a need to develop infrastructure facilities in tier 2 and tier 3 cities, as there is little scope
of building additional commercial space in the five tier 1 cities, New Delhi, Bangalore, Hyderabad,
Mumbai and Chennai. An important initiative in this direction has been taken in May 2008 through IT
investment Regions Policy Resolution, which could include new integrated townships. The challenge is to
add commercial office space at the estimated rate of 25 million square feet per annum and obtain
commensurate expansion of business infrastructure, residential space and other amenities and facilities
every year to keep pace with the demands.

Human Resource Development
      The Department has initiated a Special Manpower Development Programme in the area of VLSI
Design and related software for generating the key-catalyst ingredient for this sector. This is being
implemented through seven Resource Centres and 25 Participating Institutes.

        DIT is also implementing a scheme relating to Manpower Development for Software Export
Industry with a view to increasing the employability of the students. The Scheme covers Training of the
Trainer’s Program, Enhancement of quality of IT education in colleges, Virtualization of Technical
Education, conducting specialized short term courses in IT/ITES sector, Setting up of National On-line
Test System for Graduate Engineers in Information Technology, etc. This is being implemented through
nine institutions/organizations.

       DIT has approved a proposal of Govt. of Kerala to set up an ICT Academy. The ICT Academy,
Kerala will focus to improve the quality of student passing out of institutions and colleges in Kerala to
make them industry ready and immediately employable in IT and ITES industry.

 National Knowledge Network
         National Knowledge Commission has recommended setting up of high-speed digital broadband
network with adequate capabilities and access speed to encourage sharing of resources and
collaborative research. In accordance with this recommendations, Department of Information Technology
initiated the National Knowledge Network plan scheme with the primary objective to provide Gigabit
broadband connectivity to all institutions of higher learning and research in the country.

 Review of Information Technology Act
        The Information Technology Act 2000, a legal framework for transactions carried out
electronically, was enacted to facilitate e-Commerce, e-Governance and to take care of computer related
offences. Over the years, with several new forms of computer crime, misuse and fraud taking place, a
need was felt to strengthen legislation pertaining to information security. The same is being done through
appropriate legislative measures.


Akshay rout/vk
                                                                                                   Annexure


                         INDIAN IT AND ELECTRONIC INDUSTRY AT A GLANCE


A. Production - 2007-08

                                                                             Growth      CAGR(5 years)

IT & Electronics                        -     Rs 291,100 crore        -          19%          25%

Hardware                                -     Rs 80,800 crore         -          22%          17%

Software & Services                     -     Rs. 210, 300 crore      -          18%          29%
(Source:- DIT, Annual Report)



B. Export - 2007-08
                                                                            Growth*      CAGR(5 years)*

IT & Electronics                        -     Rs.175,700 crore        -
                                              ($43.5 billion)                 27%             31%

Hardware                                -     Rs. 12,700 crore        -
                                              ($3.1 billion)                   7%             22%
Software & Services                     -     Rs 163, 000 crore       -
                                              ($40.4 billion)                 28%             32%
* In $ terms
(Source:- DIT, Annual Report)

C .Hardware(March, 2006)                -     4 lakhs direct employment

                                        -     8 lakhs indirect employment


D. Software & Services (2007-08)        -     16.2 lakhs in 2006-07

                                        -     3.9 lakhs added in 2007-08

                                              20.1 lakhs Total
(Source:- NASSCOM, August,2008)


E. Share of IT-ITES in GDP                                            -     5.5% in 2007-08
(Source:- NASSCOM)



F. Share of Electronics & IT Export in India Exports                  -     17% in 2007-08



                                      Electronics Production
                                                                                                    (Rs.
                                                                                                    crore)
  Item                                  2002-03       2003-04     2004-05      2005-06   2006-07    2007-08
 1. Consumer Electronics                    13,800     15,200      16,800      18,000    20,000       22,500
 2. Industrial Electronics                  5,550       6,100      8,300        8,800    10,400       11,950
 3. Computers                               4,250       6,800      8,800       10,800    12,800       16,400
4. Communication. & Broadcast Eqpt.         4,800      5,350      4,800        7,000     9,500      14,350
5. Strategic Electronics                    2,500      2,750      3,000        3,200     4,500       6,100
6. Components                               6,600      7,600      8,800        8,800     8,800       9,500
  Sub-Total                                 37,500    43,800     50,500        56,600   66,000      80,800
7. Software for Exports                     46,100    58,240     80,180       104,100   141,000    163,000
8. Domestic Software                        13,400    16,250     21,740        29,600   37,000      47,300
   Total                                    97,000    118,290    152,420      190,300   244,000    291,100
                                           Electronics Exports
                                                                                                  (Rs.
                                                                                                  crore)
 Item                                      2002-03    2003-04    2004-05      2005-06   2006-07    2007-08
1. Consumer Electronics                         750    825        1,150        2,000     1,500        -
2. Industrial Electronics                   1,400      1,515      1,500        2,300     3,000        -
3. Computers                                    550    1,440      1,200        1,025     1,500        -


4. Communication & Broadcast Eqpt.              500    165        350             500    650          -
5. Strategic Electronics                         -       -          -              -       -          -
6. Components                               2,400      3,755      3,800        3,800     5,850        -
  Sub-Total                                 5,600      7,700      8,000        9,625    12,500      12,700
7. Computer Software                        46,100    58,240     80,180       104,100   141,000    163,000
   Total                                    51,700    65,940     88,180       113,725   153,500    175,700


Electronics Production

                                                                        (Rs. crore)

      Year           Hardware         Software          Total           Growth(%)

    2002-03             37,500         59500            97,000             21.1

    2003-04             43,800         74490           118,290             21.9

    2004-05             50,500        101920           152,420             28.9

    2005-06             56,600        133700           190,300             24.9

    2006-07             66,000        178000           244,000             28.3

    2007-08             80,800        210300           291,000             19.3

Electronics Exports

                                                                        (Rs. crore)

      Year           Hardware         Software          Total           Growth(%)

    2002-03                5,600       46,100           51,700             22.2

    2003-04                7,700       58,240          65,940              27.5

    2004-05                8,000       80,180          88,180              33.7
2005-06   9,625    104,100   113,725   29.0

2006-07   12,500   141,000   153,500   35.0

2007-08   12,700   163,000   175,700   14.5

				
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