To gauge the dimensions of the IT industry in India, it would be
pertinent to look at the achievements, indicators and growth prospects of the segment:
As on 31 March 1999, the software industry in India employed more than 250,000 people and
continues to be amongst the fastest growing sectors in the Indian economy. Out of 250,000
people, almost 80,000 were employed in software exports.
- In 1999-2000, the Indian IT industry was estimated to have earned revenues of Rs. 37,080
crore or U.S.$ 8.67 billion, a growth of almost 50 percent as compared to Rs. 24,781 crore
(US$ 6.05 billion) in 1998-99
.
- In the last five years (1995-2000), the Indian IT Industry has recorded a C.A.G.R.
(Compounded Annual Growth Rate) of more than 42.4 percent, which is almost double the
growth rate of IT, industries in many of the developed countries.
-In India, IT spending as a percentage of the GDP is currently about 1.68 percent. In the
USA, however, the IT spending as a percentage of GDP is more than 6 percent. With the
Government of India’s resolve to increase IT spending, it is forecasted that by 2008,
IT spending in India could touch 3 percent of its GDP.
-The IT manufacturing sector is growing at an average rate of 30-35 percent annually over
the past decade. The industry has over 150 major hardware players supported by over 800
ancillary units and small time vendors engaged in sub-assemblies and equipment
manufacturing.
- Software continues to contribute a major portion of the Indian IT industry’s
revenues. During 1999-2000, the software industry’s revenues constituted over 65
percent of the Indian IT industry’s annual revenues.
- The software industry in India grew by 53 percent in 1999-2000—with revenues
jumping from Rs. 15,890 crore in 1998-99 to Rs. 24,350 crore in 1999-2000.
- More than 185 of the Fortune 500 companies outsourced their software requirements to
Indian software houses.
- R&D spending by Indian software houses touched around 3.4 percent of the total
revenues in 1999-2000. This signifies the ploughing of increased resources in creating IPR
and developing practices and domain knowledge for moving up the value chain.
- Peripheral sales showed a significant increase in volumes and a major surge in revenues.
The peripherals segment grew at more than 38 percent, with revenues at Rs. 1,985 crore
(US$ 462 million) during 1999-2000. This growth was largely dominated by growth in the
printer segment.
- The IT training segment grew at almost 37 percent with revenues of Rs. 1,720 crore
(U.S.$ 400 million) in 1999 -2000. The Web design, e-commerce and high-end certifications
contributed a significant portion of the IT training industry’s revenues.
- During 1999-2000, more than one million PCs were sold in India. This took the PC
penetration in India to 4.3 PCs per 1000 people by the end of 1999-2000 (31, March 2000).
However, since then the penetration rate has gone up to 5 PCs per 1,000 people (as of 31
December 2000)
-The Internet revolution took off in a big way during the year, with the number of
subscribers increasing to 9 lakh (0.9 million) by March 2000. This translates to almost 28
lakh Internet users in the country. However, by 31 December 2000, the Internet subscribers
have gone up to 18 lakh (55 lakh users).
- More than 460 licenses were issued to private ISPs during the year and massive price
reductions were announced by ISPs to corner a larger share of the internet users. An
international gateway by private ISPs are also operational.
- The IT stock dominated the Indian stock market and the market capitalization of listed
Indian infotech stock peaked to a high of US$ 95 billion in February 2000. However, on 31
December 2000, it reached a low level of US$39 billion.
- The Government has conventionally been recognized as a key driver of the domestic IT
demand in India and around the world. For example, in the US, about 23 percent of total
domestic IT spending is derived from government and public sector units. In 1999-2000,
Government spending in India constituted more than 34 percent of total IT spending.
- The sectors that are taking serious initiatives to adopt and implement IT are the
Central/State administrations, insurance companies, banks, financial institutions, the
defence segment, the public tax system, ports, customs, telecom, education and the Small
Office Home Office (SOHO).
- The year witnessed major computerization in Indian banks. 12,000 bank branches out of
45,000 were computerized.
