Integrated Intelligent Research (IIR) International Journal of Business Intelligents

Volume: 06 Issue: 02, December 2017, Page No.38-41

Economic Growth of Information Technology

Abstract - Information Technology (IT) is an divided into four major segments – IT services,
important emerging sector of the Indian Economy. IT Business Process Management (BPM), software
in India is an industry comprising of two noteworthy products and engineering services, and hardware.
segments IT administrations and business process
outsourcing (BPO).The segment has expanded its IT/ITES industry in India has seen an unparalleled
commitment to Indias GDP from 1.2% in 1998 to development since the most recent decade. Different
9.3% in 2015. According to NASSCOM, the segment activities of Government of India and the State
amassed incomes of US$147 billion out of 2015, with Governments like, progression of outside exchange,
send out income remaining at US$99 billion and end of obligations on imports of data innovation
household income at US$48 billion, developing by items, setting up of Export Oriented Units (EOU),
more than 13%.Indias present Prime Minister Software Technology Parks (STP), unwinding of
Narendra Modi has begun a venture called ‘DIGITAL controls on both internal and outward speculations
INDIA i.e., Computerized India to help secure IT a and remote trade, and Special Economic Zones (SEZ),
position both inside and outside of India. The IT have assisted IT industry with gaining overwhelming
sector has served as a fertile ground for the growth of position in world's IT situation. So we can state that
a new entrepreneurial class with innovative corporate the IT business has developed throughout the years
practices and has been instrumental in reversing the and has turned out to be a noteworthy supporter of the
brain drain, raising Indias brand equity and attracting worldwide monetary development. It has helped India
foreign direct investment (FDI) leading to other to develop as a worldwide compel in the present
associated benefits. The Size of this sector has regularly expanding focused and requesting condition.
increased at a tremendous rate of 35% per year during
the last 10 years. This Paper examines the India’s II. OBJECTIVES OF THE STUDY
growth in IT industry and also studied the impact of
IT on the Indian Economy. To analyse the relationship between Information
Technology and Indian Economy
Keywords: Information Technology, Economic To analyse the economic growth in the IT industry.
Development, Foreign Direct Investment, Gross To study the employment growth in the IT industry.
Domestic Product.
III. RESEARCH METHODOLOGY
I. INTRODUCTION
The study focuses on extensive study of Secondary
India is the world's largest sourcing destination for the data collected from various books, National &
information technology (IT) industry, accounting for international Journals, government reports,
approximately 67 per cent of the US$ 124-130 billion publications from various websites which focused on
market. The industry employs about 10 million various aspects.
workforces. More importantly, the industry has led
the economic transformation of the country and IV. IT INDUSTRY IN INDIA
altered the perception of India in the global economy.
India's cost competitiveness in providing IT services, A particular industry that has been instrumental in the
which is approximately 3-4 times cheaper than the growth of the Indian economy is the IT sector. IT
US, continues to be the mainstay of its Unique Selling stands for Information Technology. The design,
Proposition (USP) in the global sourcing market. development, implementation or management of
However, India is also gaining prominence in terms of information systems is referred to as information
intellectual capital with several global IT firms setting technology. It describes the production, storage,
up their innovation centers in India. The IT industry manipulation and dissemination of information. IT
has also created significant demand in the Indian industries account for 7.2% of the GDP of India and
education sector, especially for engineering and provide employment directly or indirectly for over 3.1
computer science. The Indian IT and ITES industry is million people in the year 2014. It also contributes

38
Integrated Intelligent Research (IIR) International Journal of Business Intelligents
Volume: 06 Issue: 02, December 2017, Page No.38-41
ISSN: 2278-2400

very significantly to India’s exports: accounting for billion out of 1997-98 to USD101.7billion in the year
around 18% in 2001. India produces roughly 150,000 2011-12.
technically and socially adept engineers every year.
Most of them migrate to developed countries and Table 1: India’s GDP and information technology
form an integral part of the workforce there, thus industry growth
becoming India’s most beloved export. The IT
industry in India has seen massive change, growth and Year India’s Income % share
development over the years. The future of this GDP from IT of IT
industry seems bright with more growth being (USD sector indusdry
predicted. Financial analysts are optimistically billion) (USD in the
predicting strides in software technology development billion) GDP
in India. Additionally, the growth of the IT sector is 1997-98 411.57 5 1.2
expected to bring about a corresponding growth in 1998-99 440.59 6 1.4
other sectors like employment, exports and Foreign 1999-2000 461.91 8.2 1.8
Direct Investments. IT sector is also intimately linked 2000-01 473.05 12. 2.6
to other relevant sectors like biomedical technology, 2001-02 494.99 13.4 2.7
defense and infrastructure. Thus the future of the IT 2002-03 573.17 16.1 2.8
sector will directly impact the growth of the nation. 2003-04 669.44 21.5 3.2
2004-05 783.14 28.2 3.6
IT area has helped the residential economy to 2005-06 877.22 37.4 4.3
coordinate with the world economy. It has had critical
2006-07 1098.95 47.8 4.3
effects on the lives of many individuals. It has
2007-08 1232.95 64 5.2
likewise helped individuals settled in far flung
2008-09 1227.1 69.1 5.8
geologies to associate with whatever is left of the
world.It has brought forth e-administration hones, 2009-10 1365.4 74.2 6.0
because of which individuals get a simple get to by 2010-11 1710.92 88.3 6.1
means of e-wellbeing, e-training, e-ticketing and so 2011-12 1872.9 101.7 6.9
forth to the different legislative administrations.
Today nearly everything should be possible online Source: www.nasscom.com, voice of research, vol. 2,
whether its shopping, ticketing, documenting Income issue 4.
Tax returns and so forth. In spite of the fact that the
year 2014 was brimming with difficulties and The contribution of India’s IT industry to economic
vulnerabilities however the IT area figured out how to progress has been quite significant. It has the
accomplish twofold digit development rate and tremendous potential of becoming an engine of
achieved incomes of USD 108 billion in the monetary accelerated economic growth. It provides facilities for
year 2014-2015. productivity improvement for all sectors of the
economy and means of efficient governance. India is
Key drivers of development in the IT sector one of the leading offshore destination in delivering
engineering research and development (ER&D)
 Low cost of operation and duty focal points services with a greater market share. According to
 Supportive government arrangements NASSCOM, IT industry includes the five principal
 Availability of in fact talented labor components, namely: (i)Online business, (ii) IT
 Rapid presentation of IT advances in real services, (iii) IT-enabled services (iv)Software
divisions, for example, telecom, BFSI. merchandise and (v) Hardware merchandise.
 Strong development in send out request
 use of new advances like distributed The technology revolution for the last 15 years has
computing triggered a huge growth in, massive educated, and
 Government built up SEZs technology focused workforce, which is leading India
to become one of the major economies of the world
Growth of Information Technology (IT) Industry by 2020.
in India
Table 2: IT-ITES industry Revenue trend in (USD
In Indian economy, the offer of data innovation billion)
industry's pay in India's total national output has
expanded from 1.2percent out of 1997-98 to 6.9 Year ITES IT-ITES Tota CAG
percent, in 2011- 12.During the year 2010-11, the Exports Domesti l R
genuine GDP has developed to USD 1872.9 billion c
and the IT sector's income has expanded from USD 5 2001- 7.6 2.6 10.2 -
02

39
Integrated Intelligent Research (IIR) International Journal of Business Intelligents
Volume: 06 Issue: 02, December 2017, Page No.38-41
ISSN: 2278-2400

2002- 9.5 3 12.5 22.5 Directly the growth of the computer, hardware and
03 software industries are generating new job
2003- 12.9 3.8 16.7 33.6 opportunities in India. Indirectly the adoption of
04 computer technology by other industries expands the
2004- 17.7 4.8 22.5 34.7 range of services they provided and can stimulate
05 more rapid growth of these sectors.
2005- 23.6 6.7 30.3 34.6
06 Source: www.nasscom.com
2006- 31.1 8.2 39.3 29.7
07 The IT sector is one of the largest sectors providing
2007- 40.4 11.7 52 32.31 employment of more than 3 million people directly in
08 the year of 2014. For the year of 2011-12 number of
2008- 46.3 12.4 58.1 11.7 people employed in IT, exports are 1.29million, BPM
09 exports are 0.88million. It domestic is 0.60million and
2009- 49.7 14.3 64 10.15 totally, it is of about 2.77million. The sector provides
10 indirect employment opportunities in construction,
2010- 59 17.3 76.3 19.21 catering security, services, retail, and transport. In
11 addition the IT sector provides employment to over
100,000forgine national and 30-35 %( 8000, 000)
2011- 68.8 19 87.8 15.07
women, the sector has a diversely qualified workforce
12
with 25% of the workforce being domain specialists
2012- 76.1 19.2 95.2 8.42
(chartered accountants, doctors, lawyers, statisticians,
13
mathematicians, etc.).
2013- 86 19 105 10.29
Table – 4: Employment in IT-ITES industry (in
14
millions)
Source: www.nasscom.com.india.gov.in
Year/ 2009 2010 2011 2012 2013
Segment -10 -11 -12 -13 -14
The IT-ITES industry has been developing at
IT services 1.0 1.15 1.29 1.4 105
exceptional pace since 2001-02. IT and BPO sector’s
exports
income as an extent of India's GDP has extended from
BPO exports 0.77 0.83 0.88 0.92 0.95
1.2% of every 1998 to an expected 7.5% out of 2012.
6
Indian IT-ITES industry income is assessed at
USD105billion in FY2013-14 as contrasted with Domestic 0.53 0.56 0.60 0.64 0.67
USD95.2billion in FY2012-13 enlisting an expansion markets 6
of around 10.3%. Fare incomes of IT and BPO Total 2.30 2.54 2.77 2.96 3.13
administrations (barring equipment sends out) in Employment 2
FY2010 are relied upon to develop at 5.5%.According
to the Indian Finance Ministry the yearly development V. CONCLUSION
rate of the Indian economy is anticipated to have
expanded to 7.4% of every 2014-15 as contrasted and India is the highest off shoring goal for IT
6.9% in the monetary year 2013- 14. In a yearly organizations over the world. Having demonstrated its
report, the IMF estimate that the Indian Economy abilities in conveying both on-shore and seaward
would develop by 7.5% percent in the 2015-2016 administrations to worldwide customers, rising
fiscal years starting on April 1, 2015, up from 7.2% advancements now offer a whole new array of
(2014-2015). chances for top IT firms in India. Social, Mobility,
Analytics and Cloud (SMAC) are all in all normal to
Employment offer a US$ 1 trillion open door. Cloud speaks to the
Nasscome report stated that during 2013, the IT biggest open door under SMAC, expanding at a
industry added 160,000 employees and provided CAGR of roughly 30 for every penny to around US$
direct employment to 3.1million people and indirect 650-700 billion by 2020. The online networking is the
employment to 10million people.This sector has also second most lucrative portion for IT firms, offering a
led to massive employment generation. The industry US$ 250 billion market opportunity by 2020. The
continues to be a net employment generator expected Indian online business portion is US$ 12 billion in
to add 230,000 jobs in FY2012, thus providing direct estimate and is seeing solid development and in this
employment to about 2.8 million, and indirectly way offers another appealing road for IT
employing 8.9 million people. The potential organizations to create items and administrations to
contribution of information technology to take into account the high development buyer
employment generation is both direct and indirect. fragment. Therefore, the present study concludes that
the Indian IT industry is growing steadily and

40
Integrated Intelligent Research (IIR) International Journal of Business Intelligents
Volume: 06 Issue: 02, December 2017, Page No.38-41
ISSN: 2278-2400

positively contributes in terms of income and

REFERENCES
[1] Nirvikar Singh, Information Technology and
India’s Economic Development, April 2002.
[2] Sanjay Kumar Pal,” 21st Century Information
Technology Revolution” Ubiquity Volume 9,
Issue 24 (June 17 - 23, 2008).
[3] Yojana, “Electronics & Information
Technology”, September 2012.
[4] www.nasscom.com
[5] www.nasscom.com.india.gov.in

41