IT Taskforce
Basic Background Report



The Recommendations of the Working Group on IT Human Resource Development are given below:

The National Task Force on IT and Software Development, constituted by the Prime Minister’s office, has envisioned India emerge as an IT Superpower in the world by 2008. The Task Force has already submitted two reports to the government catering to the policy level initiatives required to be taken for developing Software and Hardware industry in the country. The first report of the Task Force, called IT Action Plan, Part – I, dealing with Software sector, has already been accepted by the government. Number of initiatives recommended in this report have already been implemented by the concerned ministries/departments. Task Force has set a target of US $50 billion for software export from India by 2008. Adding hardware exports and domestic sector requirements in hardware and software, the total size of IT industry is estimated to reach a level of US$ 100 billion by 2008. That will need a Compounded Annual Growth Rate (CAGR) of about 40%, a figure which has been regularly exceeded by the Indian IT industry for several years.

One of the key issues in achieving the targeted level of around US $100 billion for the IT sector in next 10 years is the availability of quality manpower in IT as well as IT-enabled sectors in adequate numbers. Currently, the productivity in IT industry is much less compared to international standards.

Role of IT Companies in IT HRD

IT companies will be encouraged to play a significant role in IT education. Following steps will be taken in this regard:

  1. IT HRD, including IT Education and Training, in formal as well as non-formal sector, will be treated as a Service industry. For this purpose, in the IT Action Plan (Part – I) approved by the cabinet and notified in the Gazette of India, Extraordinary, No. 160, Part –I, Section – I, dated July 25, 1998, wherever ‘IT Services" are mentioned, they shall be redefined to include IT manpower development including IT Education and Training. As the IT HRD companies have presently the greatest propensity for becoming Indian multinational companies around the world, the provisions of the IT Action Plan Policy Nos. 19, 21, 23 to 25, 27 to 42, 45 to 53, 55 to 57, 58 to 80, 88, 96, 98 and 99 fully apply to IT HRD companies, public institutions, autonomous institutions and private societies, with the following additional qualifications:
  1. ‘IT Service/service’ and ‘IT enabled service/enabled service’ will ipso facto include IT HRD/IT Education/IT Training services.

  2. ‘IT Software’ will ipso facto include IT Training materials in Program/Program Text/ Self-tutoring/ interactive-tutoring/ computer-aided-teaching/ computer-aided learning, software and associated databases.

  3. Computer networks will ipso facto include networks as carriers for distance learning networks and satellite based/ optical fibre cable based delivery mechanism for Education-to-Home (ETH) services/ Education-to-Community Centres (ETCC)/ data broadcast systems and services delivering educational contents and educational products.

  4. STPs and Private STPs will ipso facto include Technology parks combining any subset of services at (a), (b) and (c) above.

  5. IT Software and IT service exporters and joint ventures/ purchase of companies abroad will ipso facto cover IT HRD/ Education/ Training Services export and/or NRI companies primarily registered in India or with India as the primary operational base or having headquarters in India.
  1. Banks and Financial Institutions (FIs) will be allowed to float special bonds, to be called Vidya Dhan (Education Bonds), to raise capital for investment in IT Education and Training sector. The investment in Vidya Dhan will be treated at par with Infrastructure Bonds.

  2. Banks and Fis will make this fund available to IT HRD companies and institutions on low interest rates.

  3. Young entrepreneurs, including NRIs, will be offered special financial packages, including venture capital, to set up IT education facilities by Banks and FIs.

  4. IT HRD companies will engage themselves in industry oriented as well as basic research in specific areas relevant to achieving the growth targets set for the industry.

  5. A Vidya Kalyan scheme should be introduced to marry the infrastructure that the state can provide with the working capital (both physical and human) that private enterprise can offer to optimize available national resources for IT education. Under this scheme, academic institutions in the country offering IT education in the formal sector, such as universities, colleges, polytechnics and it is etc. will be given full autonomy to tie up with IT industry to jointly offer education and training programs. For this purpose, they may float an IT Education and training company under section 25, or as a Society, wherein the contribution of the academic institution in terms of infrastructure, such as building and faculty and other resources, will be treated as its equity to this company. National Council for IT Education (NCITE), as envisaged in IT Action Plan (Part – I) will prepare guidelines to facilitate this.

  6. State-aided institutions should be given adequate autonomy to attract and utilize community funds, and fees should be linked to per capita income so that they get automatically upgraded every year.

  7. All Companies, in IT as well as other sectors, will be encouraged to set aside 6% of their value added revenue (sum of salaries, perquisites and net profit) to support IT HRD sector in offering IT as well as IT-enabled education through investment in infrastructure establishment/ upgradation in educational/ training institutes, providing endowment, catering to the recurring expenditure of the institute such as on salaries/ honorarium to faculty, scholarships to students, providing part-time instructors, etc. These companies will have full freedom to allocate such funds to any institution of their choice and to be utilized specifically in the manner desired by them.

  8. Government in collaboration with IT HRD companies will aim to achieve 100% IT literacy at senior secondary level (10 + 2) in 5 years and at secondary level in 10 years.

  9. All institutes offering engineering education, including Polytechnics and it is, will ensure that within 3 years all engineering students in the country will graduate with IT knowledge to be able to serve in IT enabled Services sector besides serving in IT industry directly.

HRD Entrepreneurship

  1. IT HRD sector will aim to achieve an export target of US $5 billion by 2005. Towards this objective, government will provide extensive support to leading Indian companies in this sector to help them emerge as large Multinational Companies (MNCs).

  2. Templates of ‘Turnkey Structures’ will be prepared jointly by the government, IT industry and the IT HRD companies to evolve structure for facilitating emergence of Indian MNCs in IT HRD. A tripartite committee will be set up by the government to develop such templates.

  3. Institutes of national importance such as IITs, IISc and IIITs will be allowed to collaborate with IT HRD companies in their efforts in emerging as Indian MNCs in this sector.

  4. With a view to bring stability in the sector with respect to minimize the rate of attrition of trained manpower from companies due to shortage of skilled manpower in the industry and be able to plan a massive growth in domestic as well as global market, IT HRD companies will be allowed to offer special financial incentives to its employees such as Employee Stock Option (ESOP) and Sweat Equity as per recommendations 58 and 59 in the IT Action Plan (Part-II).

  5. Special IT HRD Enterpreneurship Training Programs will be organized by the IT HRD sector in collaboration with IIMs and other leading management institutes for entrepreneurs and financial institutions.

Academic Policy

  1. IT HRD policy should be so designed that it is effectively affordable even by the poor and should cover all parts of the country including rural areas.

  2. Special programs should be instituted to support/encourage higher end of IT education.

  3. IT HRD companies/institutions may seek affiliation to one of the Universities, Central, State, foreign university, or any other such institutional structure, existing or which may be created from time to time, for award of degrees. In case of affiliation to a foreign university, it will be ensured that the foreign university is recognized by the Association of Indian Universities (AIU) and the degree for which the affiliation is being sought is recognized by the university in its own country.

  4. Capitation fee colleges should be permitted to admit only the number that can find employment. In government institutions, state support should be limited in the same manner to the number that can find employment.

  5. All private educational institutions, irrespective of who runs them, should have the same autonomy that is currently enjoyed by minority institutions and have that autonomy even when they are aided by the state.

  6. Apart from training in software and hardware skills, increasing attention should be paid to education in basic principles of computer science.

  7. The reward package for IT professionals (particularly teachers) should be upgraded so that there will be little need nor temptation to migrate.

  8. The Institute of Computer Professionals of India (ICPI), as envisaged in the IT Action Plan (Part–I) and to be nucleated by NASSCOM with initial financial support from the industry and the government, will function as a voluntary association, with various accreditation institutions as its members.

  9. The IT HRD companies/institutions will be expected to widely disseminate information on academic performance of their students as well as their placement in the industry. These institutions will maintain a register, freely available to public, of their alumni and the kind of employment secured by them as an indicator of the value of the education imparted by them. A system of credit rating agencies is expected to evolve in the country for evaluating IT HRD institutes.

  10. Selected R&D laboratories in the country will be given accreditation for IT HRD programs, particularly at the post graduate level.

  11. A special program should be organized to develop instructional material employing IT as a tool in all courses and at all levels from elementary education upwards.

  12. Nationwide aptitude tests, on the pattern of GATE, will be conducted by NCITE and other similar organizations, at different levels to evolve a process of all India ranking of students with aptitude for IT education. The percentile score in these tests will be used as short listing criterion for admission to various IT HRD programs in the country. Preferably, the percentile score in the institution in which the candidate has studied should also be used as an additional short-listing criterion. That way, the handicap, students have in backward areas, will be mitigated. As these aptitude tests will not be rejection tests (the way entrance examination tests presently are), it is permissible to make questions public in these tests through a large question bank.

  13. Standardization tests like GATE should be organized in a transparent manner with questions disclosed in advance. The tests may be conducted twice in a year and the candidates should be free to take them as many times as they desire. In order to ensure that the candidates are fully cognizant of all the basic information needed for desired program of further education, they should be expected to answer all questions correctly and the ranking will depend on how fast they do so. A variety of such standardization tests should be organized to meet every level of education.


  1. The current system of external examination should be abolished – at least for IT courses. Instead continuous evaluation that will test the multiple dimensions of intelligence needed by IT professionals should be allowed to be organized by each institution on its own.

  2. NCITE and ICPI will establish and promote national IT Competency Examinations (ITCEs) to certify competency level of the students in various areas and at various levels. Regulatory systems should be evolved to monitor the quality of courses provided by private (and state-run) institutions and devised in such a manner that they will not curb in any way individual initiative.

  3. NCITE should frame guidelines in such a manner so as to provide full administrative, financial and academic autonomy to state-run and state-aided institutions, in the manner enjoyed by IITs and IISc, to devise their own courses and modify them as frequently as progress in the field demands.

  4. Students will have freedom to accumulate grades in various subjects from different IT HRD companies/institutes and then appear for completing IT Competency Examinations.

  5. Professional bodies such as CSI, IETE and India Chapters of ACM and IEEE, etc will be invited by NCITE and ICPI to play an active role in collaboration with the industry in the process of evolving professional ethics and standards in IT HRD.

  6. Employers’ organizations like NASSCOM, MAIT, CII, FICCI, ASSOCHAM and the like may be invited to set standards for evaluating the output of HRD institutions.


National Infrastructure for IT HRD

  1. A high-speed national network backbone, referred to as Vidya Vahini, will be established within next 2 years by government and the industry as a joint venture.

  2. All investments in Vidya Vahini will be treated at par with investment in infrastructure sector and will thus be eligible for all the financial schemes as applicable to infrastructure sector.

  3. Private sector will be encouraged to invest in the arteries of Vidya Vahini at local and regional levels. Such investments will also be treated as made in Vidya Vahini and will entitle the company to avail all the relevant financial packages.

  4. IT HRD companies will be allowed to use satellite and cable TV based networking, including Data Broadcast and Direct To Home (DTH) services over C band, Extended C band, Ku band, Ka band and other emerging satellite systems, for broadcasting educational and training programs and services over these networks without any licensing.

  5. The companies specializing in producing contents for Vidya Vahini, such as network based educational programs and services will be treated as educational companies at par with IT HRD companies.

  6. All imports for establishment of infrastructure, including hardware and software tools and preparation of educational programs and services, for IT HRD will be covered under R& D projects.

  7. Companies registered under Section 25 for IT HRD will be automatically entitled for imports under R & D projects on self-declaration basis without requiring a separate certification by a government agency.


Financial Schemes

  1. IT HRD companies covered under Small Scale sector will be allowed to have investment from companies in large sector without any ceiling.

  2. All investments, including equity investment, by individuals/companies in IT HRD companies/institutions will be eligible as deductible expenses to the extent of 133%.

  3. Investments made by companies on IT education and training of their employees will also be eligible as deductible expenses to the extent of 133%.

  4. All royalty payments received on account of IT education and training services in STPI and S-BIT scheme of IT Action Plan (Part – I) will be covered under Section 10A of Income Tax act.

  5. 100% depreciation in a year will be allowed to any company, IT or otherwise, to donate computer systems including software to the recognized IT HRD institutions. The value of systems so donated will be allowed as deductible expenses to the extent of 133%.

  6. Budgetary provision will be made to enable government organizations to donate computer systems including the software after two years of procurement to the recognized IT HRD institutes.

  7. Students opting for IT HRD programs will be provided loans by banks and financial institutions at low interest rates by treating this as a "priority area" for lending. Poorer sections of the society will be provided attractive financial packages for IT education by Banks, FIs and IT HRD companies. However, such loans should normally be made available only in those institutions where there is a reasonable certainty of future employment.

  8. Endowment schemes offered by IT companies in academic institutes will provide flexibility to offer higher amounts to faculty under the scheme compared to normal salary structure.


Role of Women in IT Sector

  1. Telecommuting will be allowed to professionally qualified women in IT to facilitate their continued association with their work place in case they are not in a position to attend to the job in office on a regular basis due to family constraints. Such women will be offered special loans/financial grants by the companies to set up infrastructure at their homes to be able to telecommute.

  2. Virtual institutes will evolve special HRD programs to help educated women to enter the field of IT-enabled services.
  3. Banks and FIs will offer special financial packages on a pro-active basis to support enterprising and professionally qualified women to set up home based IT services in various areas of IT-led economic activities.