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Production of Electronic Hardware up by 43 per cent-IT & ITES grow by 50% in last 2 years

March 10, 2010: The Information Technology (IT), IT Enabled Services (ITES) and electronic hardware industries have sustained the global recession and continued to grow during 2008-09. While electronics hardware production registered a growth of 12.1 per cent in 2008-09, the IT and ITES exports registered a growth of 16.6 per cent in the same year. This was informed by Shri A. Raja, the Union Minister of Communications & IT in the meeting of the Consultative Committee for the Ministry of Communications & IT.

The Minister further stated that though there has been a slow down in the growth of both electronics hardware production and IT and ITES exports from the level of 27.8 per cent and 29.4 per cent respectively in 2007-08 in the wake of economic downturn, the industry has managed to achieve a substantive growth in 2008-09.

The production of electronics hardware has increased from Rs. 66,000 crore in 2006-07, Rs. 94,690 crore in 2008-09, registering an increase of 43 per cent over the last 2 years. The IT and ITES exports have grown from US$ 31.3 billion to US$ 47.1 billion in the same period, an increase of about 50 per cent.

Shri Raja further informed the Members that a Task Force was set up by the Department of Information Technology with an objective to suggest measures and strategies to augment the growth of IT and ITES and the Electronics Hardware Manufacturing Industry in the context of global developments. Having held wide ranging consultations across all sectors of the industry, the Task Force submitted its report on December 11, 2009, which among others recommended:

(i) Fiscal/financial incentives;

(ii) Establishing ‘National Electronics Mission’;

(iii) Promoting human resource and talent development;

(iv) Promoting existing clusters and create new ones;

(v) Creation of R&D and manufacturing value addition fund and fostering a sustainable ecosystem for innovation and R&D;

(vi) Demand consolidation;

(vii) Building world class business and social infrastructure;

(viii) Ensuring a favourable business policy and regulatory environment

The Task Force in its report projects the electronics hardware production in the country to grow from US$ 20 billion in 2009 to US$ 400 billion in 2009 including exports of US$ 4 billion in 2009 growing to US$ 80 billion by 2020. The IT/ ITES sector is expected to grow from US$ 59.9 billion 2009 to US$ 225 billion by 2020 with exports growing from US$ 47.1 billion to US$ 175 billion by 2020.

In IT/ITES sector the employment generation (direct and indirect) is projected to grow from 10.2 million in 2009 to 30.0 million by 2020 and in electronics hardware sector it is projected to grow from 4.4 million in 2009 to 27.8 million by 2020. The contribution of IT/ITES industry to the GDP can reach almost 10 per cent from existing level 5 per cent by 2020 and the electronics hardware sector has the potential to contribute about 20 per cent to the GDP by 2020.





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