A Study of the Government Developmental Initiatives for IT Industry

I. INTRODUCTION:

The IT Industry is one of the booming industries and has been an ever green one providing enormous job avenues as far as India is concerned. India has not only served as a breeder for the industry domestically but has been a provider of skilled manpower worldwide. This field of IT sector and IT enabled services has been rapidly evolving giving an altogether new outlook to business standards in India. It has boundless purview which is not only restricted to software development but also covers consultancy, management of software, BPO and KPO services and other online services. The industry has served as one of the biggest employment generator with cumulative employee strength growing to 1.02 million for four Indian IT giants viz. TCS, Wipro, HCL technologies and Infosys as on December 31, 2019. The industry has added new jobs from 185000 to over 205,000 in FY19 and had contributed about 884,000 digitally skilled talents in 2019. (IT & BPM Industry in India, 2020) For the past one decade it has not only been contributing to the employment generation but is also contributing enormously to the growth of the country by its contribution in the GDP growth which was estimated to be 7.7% - FY 2020 and is expected to increase to 10% by 2025 (IT & BPM Industry in India, 2020). Starting off from an export of nearly $100 million and an employee strength of 5,000 , it has now emerged as a global one catering to several countries world-wide (India education, 2017). Not only does domestic environment affects the industry but several other factors including international market and sustenance of its growth rate have an impeding impact on this industry. Although the industry is a promising one having huge potential but the demand-supply gap poses great concerns before its growth and development. Amongst other challenges the industry is facing issues of inadequate infrastructure, taxation concerns and global competition from low cost destination countries like China. Not only limited to catering to the domestic market , India has now emerged as a major source for outsourcing to countries of Middle east, Europe, Africa and even other Asian countries. It accounts for more than 55% market share of the US$ 200-250 billion global services sourcing industry (2019-20). Indian IT & BPM companies have been catering to about 80 countries worldwide through their 1000 global delivery centres. The industry has generated around US$ 191 billion revenue in the financial year 2020 with an estimated growth rate of 7.7% which is expected to grow to US$ 350 billion by 2025. Its digital segment revenue itself is expected to be around 38% of the total revenue of the industry by the year 2025 to an estimated amount of about Rs. 69,89,000 crore (US$ 1 trillion).The Industry in India, 2020). Amongst the major players in the industry are included big giants like TCS, Yahoo, Google, Infosys Technologies, HCL technologies, Wipro, Cognizant to name a few. Having realised the enormous growth potential the government has put in place several policies and intervention for its development. The government policies and interventions can be segregated into various categories viz Fiscal policies which include the financial incentives and assistances offered to the companies in the IT sector. The basic objective behind these policy interventions is to encourage research and development activities. Other policy provisions include human capital-related policies, which intend to assist availability of one of the major enablers for growth of the IT sector i.e. the required human capital. The other category of provisions include Policies which have an impact on the investment climate of the nation, so as make the economy attractive for domestic or multinational companies looking out for investments. This paper is an attempt to analyse the impact of key government initiatives and policies and its impact on the development of IT sector in India.

To study the government developmental initiatives for IT Industry

H0– ―Initiatives undertaken by the Government of India for IT Industry have no significant impact on the success of IT companies‖ H1 – ―Initiatives undertaken by the Government of India for IT Industry have significant impact on the success of IT companies‖ Sample Size: A sample size of 50 entrepreneurs and employee in the IT sector have been approached and data has been collected. Sampling Method: Simple Random sampling, Purposive sampling Study area: North Maharashtra Industrial area Questionnaire: Structured Questionnaire Analysis tools: Descriptive analysis, Tabulation, Charts

Government Initiatives in IT Sector.

As the computed F critical-value is higher than the F, one should accept the null hypothesis H0, and reject the alternative hypothesis Ha. Thus, in this case it can be concluded that ―Initiatives undertaken by the Government of India for IT Industry have no significant impact on the success of IT companies‖.

IT industry has been a major contributor to the growth and development of the economy. The government has been taking into consideration several policy measures and initiative to promote the growth of the industry. Although several policy measures have been put in place still their efficacy is under lens. There are apprehensions on whether the measures adopted by the government are sufficient enough to foster growth of the IT sector.The tests applied in the current study reveals that Initiatives undertaken by the Government of India for IT Industry have no significant impact on the success of IT companies and government will have to increase its efforts in the right direction so as to ensure facilitation and advancement of the sector.

i. Brand India. (n.d.). Retrieved January 18, 2021, from https://www.ibef.org/industry/information-technology-india.aspx ii. ii. Chapter 4. (n.d.). Retrieved January 18, 2021, from http://www.infodev.org/infodev-files/resource/InfodevDocuments_628.pdf iii. IAS Score. (n.d.). Government Initiatives in IT Sector. Retrieved January 18, 2021, from https://iasscore.in/upsc-prelims/government-initiatives-in-it-sector

Assistant Professor, MBA Department, Sir Visvesvaraya Institute of Technology, Chincholi, Sinnar, Nashik, Maharashtra