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Infotech: The Indian
take-off
By Madanmohan Rao
 Few other countries
illustrate the vast potential and also the domestic
challenges of unleashing and harnessing information and
communication technology (ICT) as vividly as the
billion-strong subcontinent of India. As a content-rich
country with a free press climate, an affluent
tech-savvy diaspora population spread across the world
from Silicon Valley to Sydney to Singapore and London,
and with a huge pool of cutting-edge infotech and design
skills, India has a lot to offer to the domestic and
global Internet market. But there is also the dark side
to the proverbial coin: poor connectivity outside the
major cities, low levels of B2B (business to business)
activity online, and government policy footdragging in
terms of creating a level playing field for
infrastructure players.
India has about 10-12
million Internet users, eight million cellphone users
and a teledensity of just over three percent in a
country with close to half the population hovering
around the poverty line. Though India is still by and
large a developing nation, there is also a burgeoning
information society within. Twenty-five percent of
India's workers are in the service sector, 60 percent
are in the agricultural sector and 15 percent in
industry.
India has more information workers
than Japan and the same number as the US. Overcoming the
digital divide in conjunction with other socio-economic
divides will remain one of the key development issues
for decades to come. Innovations in low-cost devices
have yet to reach a takeoff stage, and the open source
movement is making notable but slight inroads into the
education and government sectors.
Standardization of local language fonts and
keyboards has been a stumbling block for local language
digital content publication, though some initiatives are
beginning to make headway. The youth - especially in
urban areas - are very Internet savvy, and the gender
divide is narrowing in this segment as well. At a time
of growing inter-religious conflict, the Internet is
being used actively to spread messages of peace via
web-based signature campaigns and circulation of
awareness-raising articles via email.
In terms
of employment, the IT and IT-enabled services sector in
India is a burgeoning industry and continues to draw
significant pools of talent and energy, despite the
current global economic downturn. India seems to have
cemented its position as an "outsourcing center of the
world" and Indian software, services and content
companies are gearing up to migrate up the value chain
from basic services to products.
In addition to
tapping the global software market, having a sizable
domestic user base means India can sustain a lot of
local infrastructure, content, foreign capital
investments and an online market in general - unlike
other smaller countries which need to be focusing much
more on overseas markets.
"No other nation
provides a better example of the role of the new
communication media in the development process through
which a country moves from being an agriculture-based
economy towards becoming an information society,"
according to communication scholars Arvind Singhal and
Everett Rogers, in their recent book India's
Communication Revolution.
Let us survey the
IT industry in India, the Internet content environment,
IT in development situations, and government policy
regarding IT.
Content
India is an
extremely content-rich country with a very free press
climate, unlike some of its other Asian counterparts:
the news, culture, entertainment, sports and medical
knowledge base of this country represent a formidable
pool of content for the digital publishing industry.
Like some other emerging economies, one peculiar
feature of the Indian Internet scenario has been that
there were initially more Internet users of Indian
origin outside the country than within. As a result,
much of the initial push to create India-related content
came from outside the country, especially from the
academic and non-profit sectors in the US, in the form
of mailing lists and usenet newsgroups. As local
diffusion of the Net picked up, more content development
work mushroomed at home.
In terms of content,
the number of web sites focusing on India is estimated
to be around 150,000 sites, mostly in English (followed
by Hindi, Tamil, Telugu, Bengali, Gujarati and Kannada).
Many Internet consumers in India are beginning to find
significant local benefits from accessing local content
on the web; sub-national content is beginning to appear
on sites dedicated to specific cities and states (eg
Goa, Kerala). Most sites prefer to register themselves
under the ".com" domain name rather than ".in" due to
lengthier and more bureaucratic procedures for the local
registration.
A comprehensive directory and
search services covering local content in English have
been in existence since 1997, such as Khoj and
123India.com. Portals like Rediff and Indya also offer
search engine services; international portals Yahoo,
Altavista and MSN have set up Indian editions of their
services in the last year as well.
Third-party
audits of online traffic to Indian web sites are largely
lacking, and it is difficult to obtain periodic
authoritative assignments of user popularity across the
various categories of sites. According to studies like
the Indian Readership Survey and National Readership
Survey, India's media industry reaches 180 million
readers, 384 million television viewers and 189 million
radio listeners out of a total population of 1.1 billion
speaking dozens of languages. The reach of the press is
57 percent in urban areas and 24 percent in rural areas.
Seventy-two percent of India's population lives in the
villages. But besides India's vast illiterate adult
population (252 million), there are 248 million literate
adults who do not read newspapers or magazines.
Most English language newspapers and magazine
groups in India have an online presence (full lists of
online media around the world can be obtained from sites
like Newslink.org and MediaInfo.com). Some traditional
media groups like the Times of India group (which
launched a portal called IndiaTimes.com) have also
joined the fray with web-only publications and portals
(eg Rediff, Indya). In India, content aggregators and
syndicators like ValueNotes and FridayCorporation have
emerged, providing content for entertainment and
e-finance sites. Among the major international portals,
local editions have been launched by Altavista, Lycos,
MSN, Yahoo and Orientation.
English has
generally been the national language for business
(especially in the cities), and has been the dominant
language of the IT and Internet professional
communities. But the local language publishing gap is
closing; newspapers of most regional languages are
online. Indian-language portals have emerged in most
local languages, such as WebDunia, NetSansar and
TeluguPortal. Part of the problem was an initial neglect
of local language IT products and services by the Indian
IT industry; however, in the past couple of years there
have been moves to standardize representation schemes,
fonts and keyboard layouts for Indian languages like
Tamil.
India's Center for Development of
Advanced Computing has recently launched a multilingual
webware promotion scheme called iLEAP-ISP; a
multilingual word processor with Internet and email
support in Indian languages has been made for Internet
subscribers through their respective ISPs.
The
company i-DNS.net International, which is behind the
Internationalized Domain Name System technology that
allows people to use the language of their choice for
domain name registration, expects to raise US$50 million
in revenues within the next two years from Netizens in
India from its Indian language domain name and email
services.
India is the world's largest producer
of movies and has a prolific music industry as well.
Online gaming is emerging as a popular sport,
particularly among youth. Higher disposable incomes in
the post-liberalization era that began in the early
1990s has spurred the growth of numerous lifestyle
sites. Cricket is a massively popular game in India
(despite recent allegations of corruption and
match-fixing), and a handful of cricket sites is engaged
in heated competition to capture the clickstream of
trivia-hungry cricket fans.
Notable sports and
entertainment sites include Cricket.org,
CricketNext.com, Khel.com, Hungama.com, Rajshri,
BollywoodExchange.com and the entertainment sections of
sites like Indya and Rediff. MP3 files of Bollywood hit
songs freely circulate over the Net, and the music
industry has been generally cautious in embracing the
web.
The Net can be very well leveraged for
public health information and for disaster relief during
the region's frequent national calamities (eg publishing
lists of victims and survivors, contact numbers of
relief agencies, live news updates). Some organizations
effectively used the web and email campaigns to raise
relief funds during the Andhra Pradesh cyclone and
Gujarat earthquake (eg. India Network Foundation;
CauseAnAffect.org, but much more can be done in this
regard in India. Sites geared at medicine, personal
healthcare, indigenous medicine (where India has strong
traditional knowledge bases) and the medical care
industry include IndOrth.org, WebHealthCentre.com, and
Dabur.com.
Internet diffusion in schools,
colleges and universities has not quite reached adequate
levels; academic journals published from India are just
emerging online. Access to research-oriented content -
such as online databases from the Institute of
Scientific Information, which is a major provider of
online research content to Western academics - is
available at many academic institutes.
"Now that
the ISP monopoly has been lifted, India needs to look at
creating powerful content and knowledge infrastructure"
says N V Sathyanarayana, managing director of
Bangalore-based Informatics, and a member of the
National IT task force's working group on content
creation and the content industry.
Informatics
is a Rs 140 million (US$3 million)company involved in
the compilation, consolidation and distribution of
CD-ROM and online databases. It has tie-ups with other
international database companies like the Institute of
Scientific Information, Silver Platter, Reuters,
Elsevier, McGraw-Hill and UMI. It manages titles like
Exim India (trade policies), India Business Insights
Database (news abstracts), and CABSAC (South Asian
agricultural literature).
"Web-enabled databases
can provide more enhanced, multi-functional and
personalized services that the print medium cannot
provide," Sathyanarayana says. Informatics' clients are
academic, corporate, and government research
institutions in India, such as the Indian Institutes of
Technology (IIT), the Indian Institutes of Management
(IIM), the Council of Scientific and Industrial Research
(CSIR) and Tata Chemicals.
Numerous professional
training and education institutes in India have launched
online content offerings in infotech areas like software
development and e-commerce design; these include ApTech,
NIIT, SSI, and Pentagon Academy. The Indira Gandhi
National Open University has expanded its educational
offerings to include online courses. Other notable
players here include eGurucool.com. Today, most state
governments in India have some degree of departmental
computerization under way; many have basic informational
web sites, and some even have IT secretaries and IT
parks. Indian state and federal governments are likely
to spend about $890 million in 2001-02 towards
e-government, according to the National Association of
Software and Services Companies (NASSCOM).
Many
government agencies are actively publishing reference
information online. These include the National
Informatics Center in India, and various state
governments like Tamil Nadu and Karnataka. Spurred by
the boom in the Indian Internet user base, a number of
state governments have announced modest Internet
initiatives, ranging from online trade and investments
services to high-tech corridors conducive to foreign
investments.
Andhra Pradesh Chief Minister
Chandrababu Naidu has launched initiatives to publish
government content and services online such as land
records, property taxes, birth and death data, and
applications for certificates. Tamil Nadu is also making
notable progress in online citizen services in Tamil and
English languages, especially web-based information
about land records, birth/death certificates, subsidy
schemes, college admission forms and examination
results.
National NGOs (like the AIDS relief
Freedom Foundation in Bangalore), international
non-governmental organizations (NGOs) - like Child
Relief and You (CRY) - and global organizations - like
the United Nations Development Program (UNDP) - have a
modest online presence in India. IndiaLink and the
Center for Education and Documentation have played a
major role in documenting the work of NGOs and
publishing them online. NGOs and voluntary organizations
are expected to play a key role in bringing the Net to
rural areas, as well as in compilation of traditional
knowledge in sectors like medicine, cuisine, and folk
culture (eg Archival Resource Consortium of India) .
Digital democracy must include online publishing
and participation by socio-cultural complexes like arts
clubs, libraries, youth associations, gender groups,
cooperatives, tribal organizations, human rights
activists, disaster relief agencies and advocacy groups
for disabled citizens, according to Damodaran Sivakumar
of the University of Kerala. "There is no doubt at all
that the Net has been invaluable in assisting
communities which are vulnerable and have been
victimized," says Manchin Hangzo, based at the Bangalore
office of ActionAid.
"We found that AIDS
patients were able to uncover a lot of useful
information online and get in touch with support groups
via the Net. The relative anonymity of the Net can also
help rape victims come out and talk about their problems
and find help and resource organizations online," she
says. Bangalore-based media advocacy NGO Voices is
setting up a community Internet access program for
persons with disabilities in the Kannakkapura area.
Much of the drive towards e-commerce in India
will be led by transactive content, ie content which
facilitates the completion of entire commercial
transactions, or a significant part of them. Many
business sites have gone beyond the basic brochure stage
to offer task-specific content. E-commerce sites like
Rediff.com and business portals like SteelRX publish
reviews of books and updates on the steel industry,
respectively. E-trading sites like ShareKhan and
IndiaBulls offer copious information on stockmarket
movements for prospective traders. PlanetCustomer.com
empowers consumers by aggregating content about their
experience with products and services of Indian
corporates. Trade databases of importers and exporters
are published by numerous government agencies and
third-party publishers. Yellow pages business listings
of dozens of Indian cities are available on the Internet
thanks to the online efforts of yellow pages publishers
like IndiaCom Directories.
Business articles,
sector reports and credit ratings information are
available on a pay-per-download or subscription basis
from sites like IndiaInformer.com (recently acquired by
Friday Corporation) and CRISIL (Credit Ratings and
Information Services of India, Limited). In addition to
the above categories, special measures must be taken for
providing online content rapidly during times of
disaster like earthquakes and floods. Legal developments
concerning content classification, regulation and
enforcement in countries around the world must be also
be tracked more closely by Indian publishers and
lawmakers.
In addition to content drivers from
the media and organizational sector, a key role is
played by community-driven content. India has a globally
dispersed diaspora amounting to over 20 million. Over a
million are in the US, 2 million in the UK, and hundreds
of thousands in other European countries, Africa and
Australia. Numerous sites thrive on content and
community geared at various pockets of the Indian
diaspora, many of whom find the Net to be the perfect
"online glue" for tying together the global Indian tribe
to catch up on news, discussion, culture, business and
entertainment.
A good example of an Indian
community leveraging the Net across state and national
boundaries is the 75 million-strong Tamil speaking
population worldwide. The Tamil Nadu state government
and business community is also working closely with the
governments and IT sectors of Singapore, Malaysia and
Sri Lanka on such Tamil language initiatives; Tamil is
an official language in these countries as well, and
standardization efforts are being coordinated by the
International Forum for Information Technology in Tamil
(INFITT).
Other Indian languages with a
significant presence on the Net include Hindi, Gujarati,
Bengali, Kannada and Telugu. India has over 18 official
languages and over 400 dialects; and just as the cable
television industry tapped greater revenue streams by
branching out from English to local language fare, so
also the various Indian communities can leverage the
Net.
The cultural environments of the various
diaspora pockets differ, of course, and accordingly many
Indian sites have a focus which includes their newly
adopted countries of residence: such community sites
include IAOL.com (Indians Abroad Online) and Sulekha.com
(a literature site).
Industries and
services
Although the growth in percentage has
dipped a bit, the Indian IT industry still continues to
grow at a steady pace. Irrespective of the slowdown,
leading Indian IT software and service companies have
continued to grow at over 50 percent (as compared to
over 65 percent in the past).
The Indian
software and services industry has mushroomed from $50
million in 1988-1989 to $3.9 billion in 2000-2001, over
half of it in exports to countries like the US. It
covers the entire spectrum from low-skilled medical
transcription and remote call centers to high-end
telecommunications software and e-commerce services and,
in the last part of the last decade, a number of
Internet media pioneers have emerged as well, led by
Rediff and Satyam Infoway, which have listed on Nasdaq.
Creating and sustaining a mature ICT economy
requires building and harnessing the requisite capacity
in areas ranging from software and hardware to datacom
and management skills. This requires a significant
availability of formal educational and vocational
training offerings for students and workers in
e-business and m-commerce. In India, the Indian
Institutes of Technology (IITs) and Indian Institutes of
Management (IIMs) are offering courses and modules in
areas like Web publishing and e-commerce. Professional
training institutes like ApTech, NIIT, Pentagon Academy
and SSI Technologies offer a range of courses in Java,
C++, XML, object oriented programming and web design in
India and dozens of other countries as well.
As
a result, India's software sector accounts for close to
325,000 employees, and at least 55,000 are needed each
year to meet existing levels of demand. Indian software
exports have risen from $100 million in 1990 to $5
billion in 2000. Software currently accounts for over
two percent of gross domestic product (GDP) today, and
is set to cross the 10 percent threshold by 2010.
Today, close to 300 Indian software companies
have a US presence. At one end of the spectrum, the Net
opens up a huge market in teleservices transcription,
translation, data entry, project design, accounting,
network management, web services, remote education, and
help desks. Some critics view these companies as
low-tech sweatshops for multinationals, but they provide
much better salary levels as compared to local jobs
while also exposing employees to global standards of
professionalism and new emerging ideas for potential
startups.
A highly publicized report on the
infotech industry in India, released by NASSCOM and
McKinsey Consulting, urged the Indian software and
services industry to lift its revenue goals from $3.9
billion in 1998-1999 to $87 billion by 2008. Software
exports of Rs 400 billion in 2001-2002 will represent a
41 percent growth over the previous year's software and
service export revenues which was Rs 283.5 billion.
India will have to develop over 2.2 million
high-quality knowledge workers in software related areas
by 2008. A recent study by NASSCOM and the Boston
Consulting Group projects a $9 billion business
opportunity for Indian IT companies from global
e-solutions services market by 2005. The domestic market
for e-solutions is expected to grow from a base of $65
million in 2000 to $500 million in 2005. The worldwide
market for e-solutions products and services, estimated
at $180 billion in 2000, is expected to grow to $640
billion by 2005. Customer Relationship Management (CRM)
and Supply Chain Management (SCM) solutions account for
70 percent of e-solutions spending with over 50 percent
of the market concentrated in North America.
Now
accounting for two percent of the GDP, the IT sector's
share is expected to cross ten percent of GDP by 2010.
Venture capital investments in Indian technology
companies amounted to $20 million in 1996, $750 million
in 2000, and could reach $10 billion in 2008.
India currently has an estimated 325,000
employees in the IT sector but it will be hard pressed
to produce the 55,000 new IT workers needed each year.
Courses in IT and technology management are offered by
the prestigious Indian Institutes of Technology and
Indian Institutes of Management, as well as dozens of
professional training institutes like NIIT, ApTech, Zee
Education and STG.
With its strong base of
government defense labs and manufacturing companies in
the automotive and electronic sectors, the south Indian
city Bangalore has blossomed and matured as a major
design and development location. Sun, Intel, Sun
Microsystems, ZiLOG and a number of other companies have
set up design and development centers in Bangalore.
Sun's India Engineering Center in Bangalore may
eventually become its largest such center outside the US
Lucent Technologies, Hewlett-Packard and Oracle also
plan to exploit Bangalore's cost and talent advantage
and expand their operations here.
Numerous
companies are targeting the e-CRM space in India, such
as Talisma, Interact Commerce, Parsec Technologies,
Syntax Soft Tech, Sovika InfoTech, Trivium, Customer
Asset, 24X7 Customer, Rave Technologies, Datapro
Infoworld, Vision Info Solution, Daksh, Knoah
Communication, and Trisoft. Some, like 24X7Customer
(which manages 85 percent of Altavista's email-based
customer support), manage the entire outsourcing
operation right from setting up telecom switches in
client premises and routing calls to managing the
private leased circuit to offices in India and servicing
the customer requests.
Voice-based call centers
and web-enabled CRM services are being offered not just
for technical support as with QSupport.com but for other
customer-centric activities for US and European
companies like financial order processing and payroll
processing to ticket bookings and medical transcription.
These are run either by Indian companies or the Indian
subsidiaries of MNCs like GE Capital and Dell. The
trend-setter here is GE Capital, of which the service
center in Gurgaon (near Delhi; another one is planned in
Hyderabad) offers other companies services in
accounting, phone support, transaction processing and
e-commerce support. The India centers form part of a
global GE service network which includes Mexico, Ireland
and the Philippines.
Other examples of global
companies with service centers in India include Bechtel
(CAD and 3D modelling), British Airways (airline
reservations, frequent flier program management),
Healthscribe (medical transcription for US hospitals),
Convergys (call centers for 3Com), and CitiBank
(customer service, telebanking).
Indian software
and services companies are scrambling to migrate from
legacy application development and maintenance to
Internet-centric computing and convergent platforms.
Wipro, NIIT and Aptech have software development centers
in India for high-volume offshore work, and have
marketing presences in over 35 countries. Companies like
Infosys are moving to a more value-based pricing
approach as compared to a cost-based approach. Some
Indian companies have also begun making small
acquisitions in the US and have set up alliances abroad.
Precious management expertise from Indian
Internet veterans in Silicon Valley is increasingly
being plowed back into the home country, via numerous
start-ups and outsourcing partnerships; these
entrepreneurs have become popular role models for an
entire generation of aspiring ICT-savvy youth. Much of
this "brain bridge" from Silicon Valley also extends to
venture capital.
IT and socio-economic
development
The NGO Drishtee has set up 90 kiosks
across five Indian states for rural ICT infrastructure,
providing government information and market prices; the
states include Punjab, Uttar Pradesh, Rajasthan and
Orissa. Drishtee is also a part of the core team
constituted by the Ministry of Technology and MediaLab
Asia for the implementation of community information
centers in North-East India. As part of the India
Healthcare Project in Rajasthan, village healthcare
workers used handheld computers made by Apple (the
Newton) for data entry in local languages, reducing data
entry and speeding up decision making.
The
Gyandoot government-to-citizen network won the Stockholm
Challenge Award in 2000 as well as the Computer Society
of India's National Award. Launched in 1999, it was a
rural community network initiative to meet information
needs like agricultural commodity prices in nearby
markets, land records, property registration,
microcredit financing, employment listings, grievance
redressal, application forms, matrimonial services,
weather forecasts, local news, ration shop information,
village council records, distance learning, voter lists,
marketing services for dairy and handicraft products,
emergency services, and access to expert advice (health,
agriculture, cattle, law).
In Maharasthtra, site
of a severe earthquake in 1993, a GIS-based disaster
management information system has been rolled out to
better ensure resource mobilization, decision making,
and situation monitoring. The M S Swaminathan Research
Foundation is developing "knowledge centers" in south
Indian villages to help ensure food security; the
project includes local language content and wireless
Internet access.
In Gujarat, IT-enabled machines
at the milk-collection centers of the Amul Cooperative
are used to measure butterfat content of milk and
increase the efficiency of making payments to farmers.
This has helped reduce tendencies to increase the
quantity of milk by adding water, reduced time for
payments from 10 days to a matter of minutes.
World Links, a Washington DC-based international
NGO, has announced its plans to bridge the digital
divide in India by training secondary school teachers in
125 Indian schools in the classroom application of
information technology. World Links, the lead NGO in the
World Economic Forum's Digital Divide Initiative for
India, will provide school connectivity, basic computer
literacy, and teacher professional development training
to teachers in Delhi, Karnataka, Kerala, Andhra Pradesh,
Punjab, Gujarat and Tamil Nadu.
One of the most
IT-savvy state governments in India is Andhra Pradesh.
The bilingual CARD (Computer-Aided Administration of
Registration Department) initiative is spread over 200
locations in the state, and has helped create a more
transparent and less-corruptible system of property
valuation, reduce archival problems from old paper
documents, and introduce a more scientific structure to
document classification and retrieval. Automated systems
for delivery of certificates of income and nativity as
well as ration cards, court documents, and census data
are being rolled out in over 1,124 mandals (the
administrative level just above village level) in Andhra
Pradesh. Other systems are being implemented at post
offices as well.
In Tamil Nadu's Madurai
district, WLL technology is being used by the
Sustainable Access in Rural India (SARI) project,
jointly undertaken by Media Labs, MIT, TeNeT Group of
IIT Madras, Harvard Center for International Development
and I-Gyan Foundation, Boston for deployment of
telephones and Internet in villages. SARI is tying up
with a number of content developers and application
providers, encouraging creation of a variety of Internet
contents useful to rural areas. It has tied up with Dhan
Foundation, an NGO in the area, for agricultural
information systems and transactions.
At the
level of grassroots innovation, the Honey Bee knowledge
network catalogs innovations pioneered by villagers in
the form of a multimedia database. Entries include a
tilting bullock cart for easier offloading and a powder
preservative for grain storage.
A kiosk system
has been launched in Tamil Nadu's Nellikuppam, the town
where the Parry sugar factory is located, 40 Internet
connections have already been given in the villages of
the command area. A portal called indiagriline.com has
been created, with latest weather updates,
fertilizer/pesticide stock positions of dealers in the
area, seed/seedling availability with local
dealers/nurseries, scheduling of migrant labor, tractor
rentals, farm consultancy offered by farmers in the area
and more, all in the local Tamil language.
The
Warana Wired Village project covers 70 villages around
Maharashtra's Warana river, and provides a network of
kiosks for information services in agriculture, medicine
and education. Software and training institute NIIT
pioneered an innovative "Hole in the Wall" experiment to
expose slum children to the Internet. This initiative of
IT training via "technical emergence" of Net browsing
skills has received $1.3 million in funding from the
World Bank.
The Self-Employed Women's
Association (SEWA) uses one-way video two-way audio
teleconferencing networks for training rural women
managers in water conservation, child development, and
financial services. Another notable example of what ICT
can do for quality of life in developing countries is
the computerization of India's railway reservation
system, one of the largest in the world. It has saved
millions of citizens hours of waiting time in long
queues, which used to be the case before
computerization.
Policies and regulation
Since independence from British colonial rule in
1947, India has made progress: life expectancy has
increased from 32 to 63 years. The Green Revolution in
the 1970s and White Revolution in the 1980s have ushered
in massive expansion of the agricultural and dairy
sectors, respectively. The New Economic Policy of 1991
effectively ended centralized approaches to economic
planning, and ushered in a decade of deregulation,
privatization and liberalization along with increasing
Westernization and consumerism. The Indian government
has also decided to allot at least 2-3 percent of its
budget for information technology expenditures.
Until the year 2000, the datacom environment in
India was governed by colonial-era legislation like the
Indian Telegraph Act of 1885, which stipulated that the
government is the sole owner and controller of telecom
and broadcast channels. Other regulatory blocks include
the forbidding of coupling between different service
infrastructures (eg VSAT and Internet backbones).
Regulatory bodies such as the Telecommunications
Regulatory Authority of India have unfortunately been
hamstrung by inter-departmental politicking in their
efforts to create a conducive Internet climate. While
India may often be criticized by outside observers as
being a fractious and divided set of communities who
have yet to align their interests with overall national
considerations of proficiency and professionalism, the
Internet sector of companies has come together very well
as an integrated set of interests.
The rise of
the software industry in India owes its success in part
to the tremendous lobbying efforts of the National
Software and Services Association (www.nasscom.org),
which has done a stellar job of rallying software
companies under its banner, conducting market research,
hosting frequent industry forums, lobbying for
progressive IT legislation, and evangelizing the prowess
of the Indian IT sector to government agencies and
chambers of commerce around the world.
Throughout the coming decade, NASSCOM hopes to
aggressively promote the India Inc or India.com brand
abroad, on lines similar to Ireland's IDA. Numerous
memoranda of understanding for bilateral cooperation in
the software sector have been signed with countries like
the US, UK, France, Ireland, Australia, Japan, Spain,
South Korea and Singapore.
The hardware sector
has a similar lobby called MAIT (Manufacturers
Association for Information Technology), but
unfortunately hardware has been generally treated as a
stepchild by much of the IT industry and government. As
a result, precious opportunities in tapping the
exploding market for personal digital communication
devices are being lost to other parts of Asia.
The Indian government began to promote the
software industry in the late 1980s, via the Software
Technology Park initiative, which included tax breaks
and affordable bandwidth. The prime minister launched an
IT Task Force in the late 1990s. While there was
initially some alarm at the creation of an IT Ministry
as well several IT companies prefer a hands-off approach
by the government in the IT sector the track record till
now seems to be more of open cooperation, with
considerable space for inputs on policy making on key IT
decisions.
At the state level, Karnataka, Andhra
Pradesh and Tamil Nadu have the most forward-looking ICT
policies and are active users of ICTs themselves. Others
like Kerala are also catching up. For instance, the
tourism board of Kerala has launched French and German
editions of its informative tourism site, and is now
used by 12,000 tourists a month.
IT tends to be
one sector where all political parties are generally in
agreement that there is some potential relief for
alleviating some of the society's problems. But there is
need for a considerable amount of sharing of lessons and
expertise between the different states of India. At the
government level, India's Commerce Ministry has selected
several organizations for coordinated EDI (electronic
data interchange) implementation, such as Customs,
Directorate General of Foreign Trade (DGFT), Reserve
Bank of India, and Container Corporation of India.
The IT Act 2000 has several useful features. It
legally recognizes email as a valid form of
communication in India. Acceptance in an electronic form
of any offer, culminating into an electronic contract is
legal and enforceable. It has recognized digital
signatures for the first time in Indian law. The new law
has also granted a hierarchy of infrastructure
consisting of a controller for certifying authorities,
adjudicating officers and a Cyber Appellate Tribunal.
"The Indian government demonstrates a strong
reluctance to give up its control over
telecommunications services. Government control is not
always benign; in most instances, in India, it has been
neither customer nor industry-friendly" according to
Singhal and Rogers. The Center for Development of
Telematics, set up in 1984 and headed initially by Sam
Pitroda, played a major role in the proliferation of
650,000 public call offices across India for local and
long distance calls.
Future
trends
Efforts will be stepped up by government
and private sector agencies to tackle obstacles like
poor infrastructure, high telecom tariffs, government
bureaucracy, low R&D spending by IT companies,
inadequate original and locally developed IP, lack of
user-friendly citizen interfaces in local languages, and
unwillingness among government agencies to embrace open
styles of functioning.
According to an IDC study
in 2002, in the Asia-Pacific region (excluding Japan),
India is expected to be next only to China in terms of
total number of Internet users by the close of 2005. The
number of cable TV households is expected to increase to
70 million by 2004-2005, up from 37.5 million in
2001-2002, driven by increased content availability and
affordable pricing from large, consolidated operators.
About 10 percent of all cable TV households are expected
to subscribe to the Internet, driven by lower prices of
cable modems and lower access charges.
Projections for the number of cellphone users in
India for the year 2010 have been released by Goldman
Sachs (67 million), Morgan Stanley (68 million) and KPMG
Consulting (76 million). Wireless channels and handheld
devices may usher in new and more powerful forms of
development-oriented ICT services than offered by the
current PC-centric generation.
India's Achilles
heel is lack of a cutting-edge hardware industry for
affordable PCs and cellphones as compared to its East
Asian counterparts. Access to basic reliable electricity
also hampers the widespread diffusion of PCs. Promising
developments like the low-cost Simputer, developed in
Bangalore but to be manufactured in Singapore, could
help improve IT diffusion.
On the telecom front,
better revenue sharing between telecom providers and
ISPs could help bring dialup costs lower still. In rural
areas and poor urban neighborhoods, more community
centers and cybercafes should be spawned to provide
shared Internet access and local content generation, as
with the case of the Gyandoot networks in the state of
Madhya Pradesh.
(Copyright Heartland. This
version has been edited by Asia Times Online.) To
subscribe to Heartland, please email: cassanpress@sina.com.
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