The Information Technology (IT) industry is a vital component of the technology-driven knowledge economy of the 21st century. Worldwide India has been recognized as a knowledge economy because of its impressive IT industry. The role of IT in India’s economic development has been imperative. The IT industry mainly involves IT services, IT-enabled services (ITES), e-commerce (online business), and Software and Hardware products. This industry is also instrumental in developing infrastructure to store, process, and exchange information for necessary business operations and other organizations. Furthermore, IT-based services and products have become indispensable for booming any business enterprise and achieving success.

This industry has a noticeable impact on improving the efficiency of almost every other segment of the economy. Also, the role of IT in India’s economic development has a huge potential for further accelerating growth. Information Technology not only contributed to the economic development of the country but has also made governance more responsive and efficient. Information technology in India has also made the management and delivery of government services (such as consumer rights, health services, etc.)  more effective by improving transparency.    

The role of IT in India’s economic development is unprecedented across the economies of the world. All the sub-segments of this industry (hardware products have relatively seen less progress) have made developments in revenue growth in the last 20 years. Additionally, it fueled the growth of the Indian economy. The speedy advancement within the IT industry and liberalization policies such as reducing trade barriers and removing import duties on technology products by the Government of India are instrumental in the development of this industry. Also, several other government initiatives like setting up Software Technology Parks (STP), Special Economic Zones (SEZ), Export Oriented Units (EOU), and Foreign Direct Investment (FDI) have facilitated this industry in attaining a dominant position in the world IT industry.   

IT in the pandemic era

In the present time, when the COVID-19 pandemic has grappled the entire world and economies have been hard hit. The Indian IT industry is still delivering positive signs. Also, it has the potential to overcome this exceptional catastrophe. Moreover, it has arisen as a global economic force and a major contributor to the Indian economy especially and the world in general.

IT industry boosting India’s growth

The role of IT in India’s economic development has expanded rapidly with an exponential growth rate after the economic reform of 1991-92. Indian IT companies have set up thousands of centers within India and around 80 countries across the globe. The majority of global corporations are sourcing IT-ITES from the Indian IT sector. Since it accounts for approximately 55 percent of the world service sourcing market (US$ 200-250 billion) in 2019-20. The market size (particularly export) of the IT industry has expanded manifold from approximately $67 billion in 2008-09 to 191 billion US dollars in 2019-20. The revenue is further anticipated to grow in the next coming years with an accelerating growth rate and is projected to reach 350 billion US dollars by 2025.

In addition, the notable feature of India’s IT industry is that along with its expansion in terms of market size, it is also incrementally adding a considerable share to India’s gross domestic product (GDP). Consequently, improving the growth and development of the country. From a minuscule 0.4 percent in 1991-92, the IT industry contributed around 8% in 2017-18 to the total GDP of India. This share is projected to increase to 10% by 2025. 

Subsequently, India’s digitally skilled pool has increased over the period and accounted for around 75% of global digital talent. Furthermore, India’s four large IT companies (TCS, Infosys, Wipro, and HCL Tech) have employed more than one million employees. New IT-based technologies such as remote monitoring. telemedicine, etc. is growing and increasing the demand in the digital economy. The rollout of fifth-generation (5G) communication technology and the increasing adoption of artificial intelligence, cloud computing, Big Data analytics, and the Internet of Things (IoT) will further enlarge the size of the IT industry in India. As the size of India’s digital economy is improving, IT companies are starting their centers in tier II and tier III cities which will further advance the growth. And therefore, mitigate the existing disparities.     

Conclusion

The role of IT in India’s economic development is crucial. Future belongs to India with a great share of work from different parts of the world and the placement of Indian experts across the world. The central government has started a transformation process in the education sector. In the next few years, the last year of a degree course will be considered as an R & D year and the syllabus is being developed based on the latest technological advancements, knowledge, and skills. This will certainly add value to our graduates not just as job seekers but will be as job creators.