What does India need to be a software superpower?

By : |May 10, 1999 0

Government to float Rs 100 crore venture capital fund

The announcement by Cabinet Committee on Economic Affairs (CCEA) brought to light the fact
that the government is all setting up a stage for quantum jump of the Indian software
sector, despite political turmoil. But will this be enough to achieve the aim of being an
IT superpower?

Why this fund?
The fund aims to facilitate software professionals to set up IT units in small-scale
sector by providing venture capital. To this end the Small Industry Development Bank of
India (SIDBI) will promote a trustee company. This company will be a fully-owned
subsidiary of SIDBI.

The fund would greatly help start-ups, small and
medium-sized software companies. NASSCOM will act as an umbrella organization in
mobilizing domestic IT companies, NRIs, overseas venture capital funds to provide
additional resources for the fund.

Are we close to the dream?
The fund is a step toward realizing the dream of US $50 billion software exports by 2008.

The Indian software industry has made impressive strides
during the last five years recording an annual growth rate of more than 50 percent.

Software exports are projected to reach Rs 17,500 crore
during 1999-2000 up from an estimated Rs 11,500 crore in the year 1998-99.

Impressive figures, aren’t they? But we are still far
behind the dream. To hit the target of Rs 5,000 software exports we need a lot more.

Is this enough?
The venture capital fund brings a ray of hope for the IT sector, this just a beginning.
According to NASSCOM survey, the software-driven IT industry requires around Rs 2,100
crore of venture capital in the next five years.

The announcement just marks the beginning of a new venture
capital movement in the country.

What we need
The Indian software industry has got the potential, but to be at the target we need more
funds and better policies.

To be a software superpower development of software
products and packages, Internet and e-commerce will have to be encouraged.

Funds are definitely required as we can’t move without
them. But to make full utilization of funds the industry requires more liberal trade
policies, credit card validation and clarity in tax structure.

The good news is that despite a whole lot of political
turmoil in the country, things like venture capital fund are coming up. We need to
maintain the momentum, if not increase it. For if we slow down, someone else would take
over.

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