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The Government of India visualized the importance of electronics and information technology (IT)

and its critical role in the economic growth of the country, and as a result, established the Department

of Electronics (DE) in !une, "#$% and the Electronics &ommission in 'ebruary, "##" The

obectives of the Department were to review the field of electronics with regards to research,

development and industrial operations, to formulate policy in the field of electronics and IT and to

direct implementation of all measures, both promotional and regulatory, to attain self*reliance In

"#$+, the Government of India strategically decided to tae effective steps for the development of

information systems and utilization of information resources, and also for introducing computer*based

decision support system in government ministries and departments to facilitate planning and

 programme implementation to further the growth of economic and social development (Informatics*

led development) In view of its relevance for all round socio*economic growth, and also to get

 benefit of the emerging digital economy, the &entral Government has created a new -inistry of

Information Technology (-IT) in "### by merging the DE, .ational Informatics &entre (.I&) and

Electronics and /oftware E0port 1romotion &ouncil The "#$%s saw the 1olicies of 2self*reliance3 and

2promotion3 of an indigenous IT industry in India The idea that 2import of technology could

accelerate national development in the field of electronics and computer, had gained support in the1olicies4/tatements of the &entral Government announced between "#$5*"#56-any /tate4&entral

Electronics &orporation (ie 7E8T9., -E8T9., :1T9.,;E<E8,=>9T9., E/18,

7E.I&/, E8&T, <E8, E&I8)were established in "#$%s and "#5%s to develop electronics industry

in the states ?arious policy announcements lie the Import 1olicy ("#5@), &omputer 1olicy ("#56),

Electronic 1olicy ("#5+), and /oftware 1olicy ("#5A) laid the foundations for the liberalized growth

of IT industry in the country It was recognized that IT would become strategically as important to the

Indian economy as oil

"#56 B Golden Cear for Indian IT industry

 .&1 B .ew &omputer 1olicy, introduced in "#56, has changed the face of IT industry as well as the

economic growth of India The policy has brought up many changes and reforms in the field of IT

>ccording to the policy, marets costs would we slashed for IT companies and were given many types

of subsidies ne of the most important benefits avail for IT firms was financial bacup from bans

and some venture capitalists

There is no doubt that Indian IT companies such as Tata &onsultancy /ervices (T&/), ;ipro, Infosys,

=&8 have spread their solutions across the world and brought Indian IT on the global platform .o

wonder and no magic It3s all because of our Government3s foreseen activities and the .&1

/oftware 1olicy ("#5A)The first &omputer 1olicy of "#56 and /oftware 1olicy of "#5A emphasized the concept of software

development and e0port through data communication lins This policys obective was to develop

software in India using Indian e0pertise on sophisticated computers, which were being imported duty

free This way, one could mae use of the low cost e0pertise available in India and avoid the e0pense

of time and cost in traveling abroad

=owever, there was a substantial cost involved in the data communication lins >s per the policy,

companies were allowed to establish data communication lins by their own initial investments The

ownership of the eFuipment and the operations of the same Gateway would remain with ?/.8 and

?/.8 would pay bac to the user over a prescribed period after deducting the operationalmaintenance costs

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This used to be as high as 9s6+%% lahs per A6 7bps for an Indian half circuit per year

Te0as Instruments has the credit of being the first software company with an ffshore Development

'acility in <angalore Te0as Instruments was also the first to establish its own Gateway at <angalore

with the support of ?/.8 on a build operate agreement

E0cept Te0as Instruments, no other company succeeded in establishing a similar facility It was very

e0pensive for smaller companies and other offshore development users to afford the high cost of the

data communication

The rigins of 1olicy*-aing in the &omputer Industry

Though the first electronic computer arrived in India in "#++, the origins of a computer policy dates to

>ugust "#A@ when the &ommittee on Electronics was established following India3s defeat in the war

with &hina the previous year+ The chairman of the committee was =omi ! <haba, a nuclear scientist

who was also the chairman of the >tomic Energy &ommission (>E&) /ince electronics was

 perceived to have a strategic role in national development and security, the <haba committee, as itwas widely referred to, recommended ways to strengthen the technological base in electronics in the

country In its report submitted in 'ebruary "#AA, the committee argued that computers were playing

an increasingly important social and scientific role It also constituted a ;oring Group on computers

under 1rof 9 .arasimhan of the Tata Institute of 'undamental 9esearch (TI'9), <ombay, an

institution controlled by the >E&