Agenda for India: Information Technology presents “Agenda for India”. Series editor is Charu Bahri.

Challenges & Solutions

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Information technology professionals Amin Ismaili and his wife Shahin Ismaili, both of whom work as Assistant Systems Engineers with TATA Consultancy Services Ltd., identify India’s heavy dependence on markets in the USA as the greatest challenge presently facing the Information Technology (IT) and IT enabled services (ITES, more commonly spoken of as outsourcing) industries.

“The Indian IT sector predominantly serves the American market. Consequently, any slowdown in the American market adversely impacts the Indian IT and ITES industries. At present, these industries are reeling under the impact of recessionary conditions prevailing in the USA. Fortunately, other sectors of the Indian economy which are under government control, like banking, agriculture and so on, are strong and self-sustaining, thanks to which the impact on the Indian economy as a whole has not been considerable. But if conditions persist, then you never know – our situation may mirror what is happening in the USA.”

At the “Student Internet World” program of the 2002 Bangalore Information Technology Exposition, in Bangalore, India, hundreds of computers were set up in the Kanteerva indoor stadium.

“The Government should focus on making the Indian IT sector more self-reliant so that it can withstand waves of recession. It could do this by expanding opportunities for IT and ITES projects in domestic markets. The government should also spread awareness of these opportunities in the IT and ITES sectors among the masses, so that our youth are inspired to train for a career in IT.”

“However, speaking of government control, it is also well known that most sectors that are minutely controlled by the government suffer from the interference of local politicians. The IT sector also suffers from the governments’ tending to follow a closed economic system which leads to less opportunities and lower growth rates.”

“The economy needs to open up. The government should allow more foreign investments. Collaborations between national and international institutions should be encouraged. Regulatory bodies like NASSCOM should be empowered so that they have more control and decision-making powers.”

“Another challenge is the fairly rapid emergence of competitors to the Indian IT sector. East Europe, China, Nigeria, Philippines are a few strong competitors to the Indian IT industry. In order to counter this threat, the government and the industry must accept the fact that the Indian IT industry has somewhat lost its sheen; the Satyam scandal questioned the Indian model of corporate governance. We need to prepare for a new level of competition by introspecting into the pros and cons of the Indian corporate governance structure.”

“The government could push this process by ensuring that corporate audits are completely accurate and honest. It has emerged from the Satyam scandal that ‘private firms’ and non-government institutions have absolute powers when it comes to auditing the accounts of IT giants. The government should attempt to control such firms and institutions by establishing regulatory provisions. The government should appoint high level officers to ensure that such incidents do not recur. To add to that, legal provisions should be made for share-holders to have a complete and transparent picture of a company’s activities and processes. Purchasing shares is not just about making profits and enjoying bonuses.”

“As far as emerging competition is concerned, self sustenance is the answer.”

Disclaimer: The views expressed in this write-up are the personal opinion of the respondents Amin Ismaili and Shahin Ismaili, and do not reflect the views of their employer TATA Consultancy Services Ltd.

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