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Government Policies
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 BPO/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/BPO 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 Rs. 100
crore. 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/BPO 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 BPO.
- 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.
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