eco presentation (1)

8/7/2019 Eco Presentation (1)

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Information

technology


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Information Technology is one of the most important industries in

the Indian economy.

OVERVIEW

In 1970, high import duties had forced IBM to leave India. However, after

the early nineties(Liberalization), many multi national IT companies,

including IBM, have set up their operations in India.

The IT industry can be broadly divided into four segments -

IT services

SoftwareITES-BPO

Hardware


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The IT exports have grown to a staggering US$ 46.3 billion in 2008-09

The IT sector currently employing 2.2 million professionals directly and

another 8 million people indirectly .

Accounts for over 5% of GDP

A majority of the Fortune 500 and Global 2000 corporations are sourcing

IT/ITES from India and it is the premier destination for the global

sourcing of IT/ITES accounting for 55% of the global market in offshore IT

services and garnering 35% of the ITES/BPO market.

India is the IT outsourcing hub. Major revenues are generated from

outsourced projects


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The Indian Government has announced promotion of Information

Technology as one of the top five priorities of the country and has

constituted a National Task Force on Information Technology and

Software Development.

For promoting Startups focused on technology and innovation, a

weighted deduction of 150% of expenditure incurred on in-house R&D is

also available under the Income Tax Act.

The general rate of excise duty (CENVAT) has been reduced to 8%

and Central Sales Tax (CST) has been reduced from 3% to 2%. VAT on

IT products is @4%.

POLITICAL


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Setting up ofSoftware Technology Parks of India (STPIs) in 1991 for

the promotion of software exports from the country, there are currently 51STPI centers where apart from exemption from customs duty available

for capital goods there are also exemptions from service tax, excise duty,

and rebate for payment of Central Sales Tax. But the most important

incentive available is 100 per cent exemption from Income Tax of export

profits, which has been extended till 31st March 2011.

Earlier in the year, US President Barack Obama had also announced

that tax benefits would be taken away from American companies that ship

jobs overseas.(US, is the largest contributor to the Indian IT sector'srevenues)


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In 2005, the Ministry of Commerce, Government of India has enacted the

Special Economic Zone (SEZ) Act, with an objective of providing an

internationally competitive and hassle free environment for exports.

The department of IT( Govt of India) has taken many initiatives to

facilitate proliferation and absorption of emerging technologies in the IT

sector. The Department supports Research and Development and

coordinates the technical activities of the respective Scientific Societiesof the Department by:

1. Centre for Development of Advanced Computing (C-DAC)

2. Media Lab Asia

3. Free and Open Source Software(FOSS)


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Growth in IT spending is being driven by the government. The e-Governance projects and state data centers are the focus of IT

spending in the government sector. There are many projects inthe pipeline that will boost spending in the next few years.


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Economic rowt / cession : I, inksli s.

onet r olicies: teof Interest

tion : I enefitsmayend in arch ,

, Jobs

Exchange rates: Effect of ee reciation

ECONOMICAL


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As India integrates into the world economy, there is a need for it to

reposition itself as a country.

From the domestic-oriented, self-sufficient license raj, it has come a

long way to become a globally-oriented economy focusing on thosekey sectors of the economy where it has a resource advantage over

other nations.

The objective is to offer better products at lower prices

India is doing exceptionally well in the IT industry, mostly because of

its human resource (social factors).

social


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Social factors contributing to the competitive advantage

to the India:Is drawn mainly from the technical base of the Indias highereducation as exemplified by the Indian Institute of Technology(IITs) and the regional engineering colleges.

English medium education Indian school and college level hasbeen the major strength

India has a huge domestic demand hence it is being seen as anopportunity


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The trend in the technology : Broadband , wireless Internet; VoIP; digital

music to on-demand software to biometrics.

TECHNOLOGICAL

Repository of digitized data


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There is always a first mover advantage. Countries like Vietnam, Philippines,

Malaysia, China and Central & Eastern European countries offer IT-BPO servicesat competitive rates. Hence, it becomes imperative to develop KPO

Knowledge Process Outsourcing (KPO), which may be called the highest

level of the BPO, is still at a nascent stage of development in the country. It is

expected that emergence of the KPO market will offer high-value services inoff shoring and help the Indian ITeS Industry to climb the global value and

knowledge chain.


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` The IT ACT 2000 is a set of recent legal

enactments, which governs the process and

dissemination of information digitally.

` E-archiving. E-contracting, E-signatures, ustice

Dispensation systems for cyber crimes, Privacy &

Security.

` Intellectual Property Law


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Indian IT industry focus is only limited to

software and by both volume and

revenue hardware market has thebiggest piece in the whole IT market pie.

Excessive dependence on USA for

revenue

High rates of attrition

IT industries are now forming strategic

alliances with corporations in other

sectors in order to increase the scope ofthe services they provide.

Greater scope for product innovation.

Increased focus on high end work like

consulting

and KPO

Increased competition from low-

wage countries like China,

Indonesia etcUS Govt. against outsourcing.

Shrinking margins due to rising

wage inflation

Most financially attractive country in a study by A TKearney on global IT destinations.Breadth of service offering end to end solutions

including high end services like IT consultancy andKPO.

More than half of Indias population is less than 25 yearsold. English speaking IT ITES professionals growing at agood pace.Global and 24/7 delivery capability Good internetbackbone and telecommunications facilitiesenabling companies to develop 24/7 deliverycapabilities from India itself


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Group 1

K.Sruthi Reddy

Lakshmi Divya Vegiraju

Khushboo Mishra

Priyanka Gupta

Manmeet Walia

Naman Gupta

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