IT Industry Needs Government Support On More Complex Issues

In the two years since prime minister Narendra Modi assumed office, the Digital India initiative is undoubtedly the most significant one as far as the country's IT-ITeS sector is concerned. The Indian IT and ITeS industry is divided into four major segments - IT services, business process management (BPM), software products and engineering services, and hardware. The flagship IT-BPM sector which is currently valued at $143 billion is expected to contribute 9.5 per cent of India's gross domestic product (GDP) and more than 45 per cent in total services export in 2015-16.

Modi launched the much ambitious 'Digital India' programme on July 1 last year which is certainly seen as a significant step towards transforming the country into a digitally empowered knowledge economy. The programme, among others, includes:

* Various schemes worth over Rs 1 lakh crore like Digital Locker, e-eduction, e-health, e-sign and national scholarship portal
* BharatNet in 11 states and Next Generation Network (NGN)
* Projects that aim to ensure that government services are available to citizens electronically and people get benefit of the latest information and communication technology.
* The Ministry of Communications and IT is the nodal agency to implement the programme
* Apps such as Digital India Portal, MyGov Mobile App, Swachh Bharat Mission App and Aadhaar Mobile Update App.

However, industry veterans feel the Digital India wave is yet to create a significant impact on the IT industry, as most of these initiatives are still in its initial phases. BVR Mohan Reddy, Founder & Executive Chairman Cyient and former Nasscom Chairman, opined that the IT industry will face a shortage of digital skills in the coming years, and there is a need for a focussed approach to create a skilled and digitally empowered talent pool.

Reddy also highlighted that while there have been few good initiatives and policy support, there's no new policy specific to the IT industry. "The IT industry in India is mature and has more complex problems, where it would need support from the government. Issues like visa fee hikes, transfer pricing, net neutrality, etc. have been more prominent in the recent past," he says.

Industry leaders have also highlighted that while India witnesses a huge demand for electronics every year, a significant portion of this demand is met through imports. ASSOCHAM pegs the Indian electronics and hardware industry to reach a staggering $112-130 billion by 2018 from the current level of $75 billion. "Several attempts by the government to address this gap, such as the New Electronics Policy 2012, the New Manufacturing Policy 2011 and the most recent 'Make in India' campaign seem promising, but need to be put into execution to deliver results," says Alok Ohrie, President & Managing Director, Dell India and Chairman, ASSOCHAM National Council on Electronics & Hardware.

It may be fair to say that while Modi's Digital India poses lots of opportunities for the IT/ITeS sector, the government should focus more on the industry-specific challenges. Building appropriate skills alongside the Digital India initiative will be a key determinant in materialising the mission. The government has done a good job in marketing initiatives like Smart Cities, Digital India, Make in India, Startup India, and Skill India but the challenge lies in making them a reality.

"The herculean task is in execution, which is where many of the governments fail as they are not able to steer these initiatives towards completion," says Reddy. Ohrie of Dell agrees, "In today's dynamic world, we all expect instant gratification, and therefore also scrutinize the government's progress in this manner."