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Day 22 – Q 3.What were the precursors to the computer and IT revolution in India? How did it shape the socio-economic landscape in India? Analyse.

3. What were the precursors to the computer and IT revolution in India? How did it shape the socio-economic landscape in India? Analyse.

 भारत में कंप्यूटर और आईटी क्रांति के अग्रदूत क्या थे? इसने भारत में सामाजिकआर्थिक परिदृश्य को कैसे आकार दिया? विश्लेषण करें।


The IT industry emerged in the 1960s, and its export prospects were recognized as early as the early 1970s. The government adopted suitable policies to develop the export potential of this sector, the most important of which was to allow duty-free import of computer systems for software export purposes. The second phase follows the announcement of the New Electronics Policy and the New Computer Policy, both in 1984. 


The precursors to the computer and IT revolution in India

  1. Relaxation in immigration laws and IT revolution in USA: Fast growing IT sector in USA resulted and relaxation in immigration law in 1965 enabled Indian immigration into the USA. As a result, it also led to the creation of IT professionals in India.
  2. Establishment of Tata Consultancy Services (TCS), Wipro, Patni Computers and Infosys in the pre-1991 era – The establishment of these firms between 1960s and 1980s led to the development of IT business model in India.
  3. Pre-1991 policy intervention – The Policy on Computer Software Export, Software Development and Training announced in 1986 facilitated the development of the software industry. It recognized software as an industry to invest and made it eligible for incentives as other domestic industries, reducing import tariffs and announcement of CSDT policy which liberalized exposure to the latest technologies to compete globally and to capture a share of global software exports. 
  4. Economic liberalization in 1991 – relaxed the strict control over private entities and gave a further boost to the IT sector in India. After the economic reforms of 1991-92, liberalization of external trade, elimination of duties on imports of information technology products, relaxation of controls on both inward and outward investments and foreign exchange and the fiscal measures taken by the Government of India and the individual State Governments specifically for IT and ITeS have been major contributory factors for the sector to flourish in India and for the country to be able to acquire a dominant position in offshore services in the world. 
  5. Government policies that facilitated IT revolution post 1991 reforms – The major fiscal incentives provided by the Government of India have been for the Export Oriented Units (EOU), Software Technology Parks (STP), and Special Economic Zones (SEZ).

 How it shaped the socio-economic landscape in India

  • With the number of jobs steadily increasing and has resulted in creation of new class of young consumers with high disposable incomes causing changes in lifestyles, forms of sociality, family structure, and self-identity. These changes fuel the rapid upward socio-economic mobility experienced by employees in this industry. This workforce has been identified as a distinct occupational group, which affects their identity, attitude, interest, colleagueship, collective actions, power, and status and work consciousness.
  • This sector has emerged as the biggest employment generator. For each person employed in IT sector, around four people were employed in the rest of the economy (NASSCOM News line, 2007). Every rupee spent by IT sector (on domestically sourced goods and services) translates into a total output of Rs.2.00 in the economy. In addition, for every job created in this sector, four new jobs are created in the rest of the economy. 
  • The rapid growth of IT-BPO and IT industry as a whole is having a profound impact on the socio-economic dynamics of the country. The IT workforce has its own distinct forms of work, employment, organization, and management. Along with its distinct work culture emerged a distinct lifestyle, attitude, sociality and identity.
  • This industry is also positively influencing the lives of its people through an active direct and indirect contribution to the various socio-economic parameters such as employment, standard of living and diversity among others. The industry has played a significant role in transforming India’s image from a slow moving bureaucratic economy to a land of innovative entrepreneurs and a global player in providing world class technology solutions and business services. The industry has helped India transform from a rural and agriculture based economy to a knowledge based economy. 


The IT sector in India today outsources software services across the world and because of the economic reforms in 1991 and the various liberalization acts introduced by the subsequent Governments helped the IT sector in India grow immensely.

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