With the Indian Prime Minister Shri. Narendra Modi resuming duty for the second term, the 2019 growth and development of the Indian economy is going to be much faster and for the next five years.
According to the World Economic Situation and Prospects 2019 report by the United Nations, the current world economic scenario has predicted a global growth to remain at 3% in 2019 and 2020.
In the IMD’s 2019 World Competitiveness Rankings, India moved up a rank from 44th to 43rd. Singapore left behind Hong Kong in second place and the USA at third place to become the world’s most competitive economy.
According to the International Monetary Fund, India’s GDP growth is above 7%, is predicted to surpass the GDP’s of UK and France by the end of 2020 and is expected to reach the GDP growth of Germany by 2023, and becoming the fifth largest economy in the world (IMD.org).
History of Indian IT Industry:
The birth of the Indian IT industry took place in Mumbai in 1967 with the setup of Tata Group and Burroughs Corporation, United States, where Tata Group had to write the codes for the Burroughs machine. The company was set up in the first software export zone, SEEPZ or Santa Cruz Electronics Export Processing Zone, which amounts to 80% of software exports. After which many more companies sprung up to change the face of the Indian Economy.
In 1991, major economic reforms were seen with international economic integration and the positive effect of globalization on the Indian economy. In the same year, the Indian National Task Force on Information Technology and Software Development was formed during the administration of Late Prime Minister Shri. Atal Bihari Vajpayee, which helped in building major information technology hubs in Bengaluru, Pune, Chennai, Hyderabad, and Chandigarh. (Wikipedia)
After passing the Information Technology Act in 2000, e-commerce businesses were given a boost and has helped in the emergence of many e-commerce sites like Flipkart, EAlpha, Jabong, Snapdeal, etc.
Impact of Information Technology on economic growth in India:
Information Technology has a bright future and will see an anticipated growth of 10% in the next few years. The economic growth in India due to Information Technology was immense after the introduction of FDI or Foreign Direct Investment. An increase of 48% in FDI inflow was seen after the ‘Make in Initiative’.
The IT industry is forecasted to also generate around 2 million new jobs, with 13% concentrated in India only, which may reduce the unemployment rate, according to a report by Teamlease. The hiring growth in the IT sector grew by 39% over the last year, according to the Naukri JobSpeak Index report.
In 2018-19, the growth of US$ 181 billion was seen in the IT & ITeS industry. By 2025, the IT-BPM sector is forecasted to expand to US$ 350 billion according to the Minister of Electronics and Information Technology, Shri. Ravi Shankar Prasad.
India’s IT industry is predicted to see companies move towards Industry 4.0, where new technology like Cloud Computing, Internet of Things, Artificial Intelligence, Robotics Process Automation (RPA), Blockchain, Big Data, and Analytics will be adopted.
However, in order to see monetary benefits and develop new products and services, the challenge for the Indian IT sector is to upskill their workforce for the new technology and collaborate to sustain the Digital India Initiative. The IT industry will see an expected growth of 7% in the next few years. (Fortuneindia.com and Businessworld.in).
The Government of India has the mission to provide digital skills to at least one person per household by 2020. To achieve the mission, various initiatives are being carried out by the Government to empower citizens with digital skills.
The IT industry has been instrumental in turning the Indian economy into an emerging superpower. The IT industry has also provided numerous job opportunities across the country and also has also transformed the lives of 1.3 billion Indian citizens through the Digital India initiative so far.
The IT industry has reshaped India from being an agricultural-rural economy to a knowledge-based economy. With Digital India, there has been a tremendous number of programs being run by the government like Digital Empowerment through the introduction of Digital Infrastructure in the form of Digital Identity, services through Digital Delivery, Digital Literacy, Digital Skilling, Digital Payments so that Digital Access to granted to all.
Effect of globalization on Indian economy:
The effect of globalization on the Indian economy has seen landmark progress. The Information Technology industry’s role and contribution to the current economic program have encouraged established companies and start-ups to invest hugely.
The Prime Minister, Shri Narendra Modi’s famous words “Come, make in India. Sell anywhere, but manufacture here. We have the skill and the talent,” has attracted many global companies to invest in the IT industry and has helped in overall economic growth.
The IT industry has contributed immensely to the growth and development of India and has resulted in innovations. According to the Global Innovation Index, India ranks 57th as the most innovative country in the world out of 126 economies in the world. India also ranks No.1 in Information and Communication (ICT) Services exports.
According to the World Bank’s Doing Business Report, (DBR, 2019) for ease of doing business, India came up 23 positions up to rank 77th among 190 countries in the world.
India is well on the way to overtake developed economies with the help of its IT industry along with huge contributions by the government and investments by foreign companies.
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