The Indian government realizes that Information Technology has the potential to influence extensive economic development in the country. IT is now one of the top priorities of the Indian government and favorable policies are being formulated to extract maximum benefits from the industry. Here, we are highlighting some of the government policies which have proved very beneficial in the growth of IT/BPO industry. These favorable government policies have gone a long way in making India a Outsourcing/IT hub.
. The reforms have reduced licensing requirements and made foreign technology accessible. The reforms have also removed restrictions on investment and made the process of investment easier. This has tremendously helped the IT/Outsourcing industries.
. The Indian government is actively promoting FDI and investments from NRIs (Non-Resident Indians). FDI can be brought in through the automatic route, based on powers accorded to the Reserve Bank of India.
. In pursuance of liberalization and globalization, the Indian government has been formulating and implementing more transparent and investment friendly policies. This is now reflecting in many areas. Till 1994, DOT was the sole provider of basic telecom services in India but the new telecom policy opened the field to the private operators as well. It has made India one of the fastest growing countries in the field of telecom.
. Another significant example of the liberal policy of the Indian
government is the IT Act. The IT Bill passed in 2000 provides a legal framework for the recognition of electronic contracts, prevention of computer crimes, electronic filing of documents, etc.
. In pursuance of the liberal policies, the Indian government has been continuously proposing amendments in the Indian Evidence Act, Indian Penal Code and the RBI Act. The mechanism of digital signature has been proposed to address the issues of jurisdiction, authentication and origination.
. Recognizing the importance of Venture Capital Funding, the Ministry of Information Technology has set up a National Venture Fund for the Software and IT Industry with a corpus of 25$ USD millions. The main aim of the venture capital Fund is to provide Venture Capital to start up software professionals and small IT units.
. Nasscom (most important promoter of the IT/Outsourcing industry) has been playing a crucial role in helping the IT industry achieve the IT and ITES vision and make India far ahead of other players in the field of IT and Outsourcing.
. Nasscom has helped the government implement almost all the original recommendations of the last Nasscom-McKinsey Report, 1999 concerning the capital markets, venture capitalists, SEBI and the Companies Act.