Minutes of the Preparatory Taskforce Meetings
of the National Taskforce
on
Information Technology & Software Development
held on 12, 13 and 15 June 1998
at Planning Commission


The Preparatory Task Force meeting was held on 12 June 1998, 13 June 1998 and 15 June 1998 at the Planning Commission, Yojana Bhavan, under the chairmanship of Professor M.G.K. Menon, Co-Chairperson of the Task Force.

The following members were present:

12 June 1998 13 June 1998 15 June 1998
All Members
except
Shri N.R. Narayana Murthy
Shri Ashok Soota
Shri A.V. Gokak
Shri N.K. Singh
All Members

except
Shri N.R. Narayana Murthy
Shri Ashok Soota
Shri N.K. Singh
Dr. Y.S. Rajan
Shri Ravi Parthasarathi
Prof. M.G.K. Menon
Shri P.P. Prabhu
Dr. N. Seshagiri
Commodore Prem Chand
Shri Dewang Mehta
Shri Anil Bakht

2. The recommendations made by the Preparatory Task Force are enclosed at Annexure-I.

3. Before the above recommendations are placed before the Task Force under the chairmanship of the Deputy Chairman, Planning Commission, the views of Secretary (Revenue), Secretary (Finance) and Secretary (Telecom) shall be taken on specific recommendations in the light of which modifications as suggested will be put before the Task Force along with the recommendations at Annexure-I to enable the Task Force to make a final set of recommendations for placing before the Prime Minister and the Cabinet:

i) Specific Recommendations referred to Secretary (Revenue):

5, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 38, 78, 79

ii) Specific Recommendations referred to Secretary (Finance):

20, 21, 22, 23, 24, 25, 26, 28, 29, 32, 33, 34, 35,

iii) Specific recommendations referred to Secretary (Telecom.):

(50) to (77), 97, 101


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ANNEXURE-I

Recommendations of the Preparatory Task Force meeting of the National Task Force on IT and Software Development

I. CUSTOMS & EXCISE RELATED ISSUES

1.1 Definition of 'IT Software'

(1) (i) Definition: "IT Software" means any representation of instructions, data, sound or image, including source code and object code, recorded in a machine readable form, and capable of being manipulated or providing interactivity to a user, by means of an automatic data processing machine falling under heading 'IT Products', but does not include 'non-IT products'. IT service is defined as any service which results from the use of any IT software over a system of IT products for realising value addition. The term 'IT Software' shall be substituted in place of 'Computer Software' in all notifications.

(ii) Finance Ministry (CBEC) shall introduce a new classification called, 'Information Technology (IT) Products' including Computer, Digital/Data communication and Digital/Data Broadcasting products, by recognising the progressive technological convergence of these three categories and in line with the classification list in Attachment A (Section I and Section II) of the WTO (ITA) Agreement.

(iii) IT Software shall be entitled for zero customs and excise duty.

1.2 Duty Reduction Schedule : Commitment to WTO

(2)(i) Issuance of a notification and informing WTO and the primary signatory countries about India completely acceding to the Ministerial Declaration of 13 December 1996 at Singapore.

(ii) Issuance of a notification rescinding the modified position conveyed by India to WTO.

(iii) Issuance of a notification announcing the following new schedule:

In Attachment A, Section I of WTO (ITA):

(a) Out of the sub-list of the 94 items conveyed to WTO in 1996 which are found in the list:
3818,8469-11 to 8531-90, 8542 to 8544-70, and 9030-40, the duty shall be reduced to zero by 1 January 1999.

(b) Duty on the Other items in the above list in 2(iii) (a) will be reduced to zero by 1 January 2000

(c) Duty on the items 8532 to 8541, and 9009-11 to 9027-90 will be reduced to zero by 1 January 2002

In Attachment A, Section-II:

(d) Duty on all items in the list will be reduced to zero by 1 January 1999.

(iv) Zero excise duty and zero special additional duty shall be concomitant with zero customs duty.

1.3 Duty on Compact Disc or on other Optical Disc Media or on magnetic media with text/content

(3) No customs duty on import of CD-ROMs or Optical Disc Media or Magnetic Media containing text and data as content.

1.4 Duty Exemption for gifting bonded computer

(4) Imported IT Products can be taken out of bonded offices or out of Electronics/IT Units under EOU/EPZ/STP/EHTP Schemes after a period of 3 years from the date of import or after declaring them obsolete, if these are gifted to recognised Schools, Colleges, Libraries, R&D Establishments, Government organisations, Registered Charitable hospitals, Charitable societies looking after the welfare of weaker sections of the society, destitute children, destitute women and environmental protection.

1.5 Bonding and Inspection

(5)(i) IT components for non-commercial use and IT software should be allowed to be imported through registered courier without any upper value limit.

(ii) IT Software and IT Services companies shall be exempted from inspection by Inspectors like those for Factory, Boiler, Excise, Labour, Pollution/Environment etc.,

(iii) Physical bonding in the bonded offices or in the operations of EOU/EPZ/STP/EHTP Units, shall be removed by maintaining a certified record of all IT Products or IT software imported or procured locally for use in the bonded premises in a dedicated central computer archive maintained by the Custom House with the details entered into it in standard EDI format through INTERNET by an authorised person in the bonded unit. This shall be subject to sample physical inspection by customs.

1.6 Shipment related issues.

(6) (i) Export shipment time for air cargo shall be reduced to less than 24 hours.

(ii) "Known Shipper" will be introduced to avoid delays on account of cooling off period.

(iii) Cargo companies and other associated agencies to allow consolidation of export air cargo.

The Ministry of Civil Aviation shall issue necessary notifications/amendments in the regulations in association with Ministry of Home Affairs.


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II. DIRECT TAX RELATED ISSUES

2.1 IT as Infrastructure

(7) Declaring Electronics and Information Technology as "Basic Growth Industry" and as "Infrastructure facility" under Section 80-IA of the Income Tax Act.

2.2 Income Tax Concessions

(8) Section 80 HHE of the Income Tax Act provide for income tax exemption to profits derived from software and services exports. This section has to be amended as follows:

• The existing formula is changed such that tax on profits have no relation to domestic turn over.

• The definition of export turnover is changed for including IT services

• Profits of overseas branches shall get tax benefits.

• Deduction for sub-contractors in respect of profit from export of computer software to continue for ten years.

(9) Allowing 50 percent of all foreign exchange brought into India by a Company to be exempted from the Income Tax Act shall continue for ten years.

(10) IT software and IT services shall be deemed as manufacturing activity for the limited purpose of applicability of Section 10 (15) (iv) of the Income Tax Act.

(11) The current benefits of Section 10A and 10B of the Income Tax Act shall continue for ten years.

2.3 Service Tax Exemption

(12) Service tax should be exempt for IT software and IT services industry and professionals.

(13) IT Software should be exempt from withholding tax through amendments in the 'explanation' of Section 9 of the Income Tax Act.

2.4 Tax Incentives for Promotion of Applications

(14) Creation of IT software products and packages shall get R&D benefits under Section 35(2AB) of the Income Tax Act.

(15) Foreign/NRI professionals in IT Products, IT Software and IT services shall be exempted from paying income tax on their salaries in India for a period of upto two years.

(16) IT/Software companies locating all their businesses in Class-C towns and rural areas shall be exempted from Corporate Income Tax for a period of three years.

(17) IT Software companies employing women IT specialists and specialists from constitutionally recognised weaker sections of the society, in any combination of numbers, to the extent of more than one third of the total IT/SW professionals in the company shall be given deduction in respect of profits and gains under Section 80HH.

2.5 Gift & Income Tax Exemption for PC/IT Products

(18)(i) For individuals buying IT products including computer, the expenditure shall be deductible under Section 88 of the Income Tax Act.

(ii) No gift tax for the giver or Income Tax for the taker on PCs whose original purchase price is upto Rs. 50,000 and the gifting is for fully residential use.

2.6 Income Tax Exemption for Domestic Sale of Software

(19) Indian Software Exporting companies shall have 25 percent of their domestic sales exempted from Corporate Income Tax.


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III. BANKS/RBI/FERA/INVESTMENT RELATED ISSUES

3.1 Working Capital Requirement for the Software Industry

(20) As a special dispensation towards the working capital requirement of running software units, banks should consider working capital as a term loan as is done by the State Financial Corporations. In the Reserve Bank guidelines for providing working capital to software companies, certified and approved cash flow statements shall be accepted instead of collaterals..

(21) A special working capital fund of Rs. 5,000 crores shall pooled by a consortium of banks for the exclusive use by software companies.

3.2 Venture Capital Requirement for the Software Industry

(22) Creating an IT Venture Capital Fund of US $ 500 million in the next five years for giving low interest bearing loans and investing in equity of start ups on the basis of Share Capital participation or on the basis of profit sharing by the banks instead of charging interest rates.

(23) A venture capitalist is allowed to set off losses in one invested company against profits in another invested company, during a particular year, for purposes of Income Tax.

3.3 Sweat Equity

(24) The issue of shares at 'par value' should be done away with by offering sweat equity at a differential pricing.

(25) Amendment of Company Law to facilitate issue of Sweat equity

(26) A new definition No. (66) may be added after definition No. (65) in Clause 2 as under:

"(66) Sweat Equity means equity allotted to promoters, Directors or employees for providing any intellectual property or value addition to the Company.

Suggested Section to issue 'Sweat Equity':

In Clause (65) after Sub-Section (1) (b), following clauses shall be inserted as Clause (1)(c) and thereafter the present Clause (1)(c) may be re-numbered as Clause (1)(d):

3.4 Marketing Fund

(27) Marketing funds shall be provided to the IT software and IT Services companies in the form of 50% grant, similar to the EMF Scheme of EXIM Bank.

3.5 FERA Issues

(28) Modifying FERA and Companies Act for acquiring companies abroad/setting up of operations abroad.

(29) Changes in FERA Act for facilitating Electronic Commerce.

3.6 Depreciation

(30) 100% depreciation in the first year itself must be provided for any investment made in IT Products, IT software and IT services.

(31) 100% depreciation within first year of purchase of IT products and IT Software

3.7 Priority of FI & Banks for IT Software and IT Services Exports:

(32) IT Software Industry and IT Services shall be treated as priority industry by Financial Institutions and Banks.

(33) Capital Finance for Software/Capitalizing Software Purchase shall be allowed.

(34) Bank guarantee should be waived off for manufacturers having ISO quality certification.

3.8 ADR/GDR, Stock listing & Dual Listing

(35)(i) Dollar Stock Options shall be linked to ADR/GDR for employees of the Software Companies.

(ii) Dual listing of the Indian Software companies in India and issue of ADRs or overseas stock listing shall be permitted; one relating to listing and trading in India and the second class of shares relate only to overseas listing.

(iii) Options like Acquisitions, Mergers, leveraged buyouts, building brand equity and overseas listing shall be made procedurally simple with time bound clearance by the Government.

(iv) Two way fungability for ADRs should be allowed for software companies subject to minimal essential restrictions for safeguarding against adverse effect on capital convertibility

(v) Non-listed Indian software companies (on Indian Stock Exchange) should be allowed ADRs and overseas stock listing.

3.9 National Software Development Board

(36) Setting up of National Software Development Board for providing rolling-fund, soft loan and grant through specialised 'National Software Bank' under SIDBI.


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IV. MOC/EXIM - POLICY RELATED ISSUES

4.1 EPCG- Scheme

(37) In the EPCG scheme a system of self-declaration shall be introduced with 100% post-checking subject to punitive penalty for default.

4.2 EXIM Policy related Issues

(38) The value limit for import of IT Products including personal computers may be reduced from Rs. 1.50 lakhs (cif) to Rs. 50,000; simultaneously all CG and inputs to PC manufacture and PC component manufacture reduced to zero duty and the corresponding excise duties concomitantly reduced to zero.

4.3 Benefits to private infrastructure and common facilities/service providers

(39) Private and public organisations providing infrastructure/common facilities shall be included for duty exemption for importing capital goods. Such service providers in view of such capital goods imported shall undertake the export obligations as provided for import of capital goods in the STP Scheme.

4.4 India Brand Equity Fund

(40) This Scheme operated by the Ministry of Commerce shall be made available for Software companies with lower interest and longer interval.


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V. SOFTWARE & IT SERVICES: DEVELOPMENT & EXPORT

5.1 Body Shopping & Software Package Export

(41) 'Body shopping' has to be made easier by combating Visa regulations of the recipient countries through a planned diplomatic strategy by the Ministry of External Affairs and the Indian Missions abroad for which MEA will create a suitable dedicated structure.

(42) Returns from package software development shall be increased by enabling Indian Marketing companies to set up wholesale companies abroad by making all the provisions of (22) to (29), (36) and (40) applicable to them; they shall also be given maximum flexibility in organising the marketing of package software from India through INTERNET.

5.2 Bench Marking against competitor countries

(43) For Bench marking our country with our emerging competitors, a study shall be conducted once in two years by internationally reputed consultancy companies for which provisions of (36) can be utilised on priority.

5.3 Removing Location Restrictions

(44) Restrictions on the location of IT software and IT Services (including IT training) companies in residential areas shall be removed.

5.4 Y2K & Large Niche Markets

(45) To enable organisations and companies to identify, explore and plan strategies for Large Niche Markets like Y2K and Euro, notionally and Corporate wise, provisions of (22) to (29), (36) and (40) shall be made applicable; through MOC and DOE funds 'India Pavilions' may be set up in several major IT exhibitions around the world through the initiative and coordination of ESC and NASSCOM.

5.5 Promotion of Software & IT Services Export

(46) 'Mega Web sites' shall be created on INTERNET for promoting marketing and encouraging Indian Software products and packages under multiple initiatives like NASSCOM, ESC, etc.

(47) Under DEPB Rupee trade arrangement, IT Software and IT Services export to Russia shall be permitted with promotional support given by the Electronics and Software Export Promotion Council (ESC).

5.6. Promotion of IT enabled Service Export

(48) All promotional and liberalisation policy instruments available to IT Software and IT Services shall be made available to IT enabled services including the Information Content Industry by classifying IT enabled Services as tantamount to IT Software and IT Services.

5.7 Setting up of Self-contained Self-financing High-Tech Habitats

(49) Cities like Bangalore by themselves can not fulfill the high targets now set for the IT industry by the Year 2008. International experience has shown that hi-tech industries flourish essentially in the rural hinterland adjacent to cities with top class hi-tech educational/research institutions. India too will promote such 'High-tech Habitats' in the rural hinterland adjacent to suitable cities. For that purpose suitable autonomous structures will be designed and progressive regulations will be framed to facilitate infrastructurally self-contained self-financed Hi-Tech Habitats of high quality.

Initially, five such Hi-Tech Habitats shall be planned and implemented in the rural hinterland of the cities: Bangalore, Hyderabad, Pune, Gurgaon and Bhubaneswar. It is estimated that progressively 50 such Hi-Tech Habitats can be viably set up by empowering the State Governments to autonomously nucleate them within a technologically progressive and administratively liberal set of guidelines to be prepared by a Special Task Group on Hi-Tech IT Habitats set up by the Task Force.


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VI. DOT / TRAI - RELATED ISSUES

6.1 Toll-Free Services & Reduction of Telecom Costs

(50) (i) DoT & VSNL should introduce toll free access to every INTERNET Service Provider's point of presence (POP).

(ii) DoT to introduce toll Free Lines to access INTERNET from any telephone exchange in the country for those creating databases in India. Each call shall be restricted to a maximum duration of 30 minutes.

(51) Local call rates for Internet access shall be charged for calls from any subdistrict point to the district headquarters by generalising the Kerala pattern of tariff to the entire country.

(52) There should be no surcharge for a fully paid international high speed Data Circuit (64 Kbps and above), if it is used for making phone calls.

(53) Double the tariffed lease rental for high speed data circuits leased by companies licensed to provide value added service; must be removed and normal tariffed lease charges only shall be payable.

6.2 DOT-related Routing Issues

All ISPs and CUGs should be given the following facilities:

(54) Requests made by ISP or CUGs for release of Bandwidth to be sent by VSNL to INTELSAT within one week of receipt.

(55) Allowing voice along with data where required for IT Software and IT Services export shall be cleared by DOT within 30 days.

(56) Reduction in domestic lease line rates by 50 percent for IT software and IT Services units.

(57) VSAT-based and other data networks should be allowed to be interconnected with the public switched telecom networks (PSTNS) with bilateral or multilateral interconnect agreements between the parties.

(58) Restrictions against the networks being linked to each other directly and the insistence that they should go through the DOT's network shall be withdrawn.

6.4 New Public Services

(59) Setting up Centralised call centres shall be permitted and DOT shall quickly respond to requests for bandwidth and links; The Call charges shall be reduced to 1/3rd.

(60) DOT shall develop on priority the 1-800 and 1-900 services on the same pattern as in USA.


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VII. INTERNET / VSNL - BASED ISSUES

7.1 Ending VSNL Monopoly

(61) Direct global connectivity should be allowed to private sector ISPs or CUGs, who should be free to choose either between VSNL's gateway or any other international gateway of their choice.

(62) VSNL monopoly permitted upto 2004 for switched voice telephony shall be immediately reviewed and in line with the WTO (NGBT and ITA) Agreements, the monopoly shall be removed with effect from 1 January 1999.

(63) The INTERNET enterprises (ISPs) shall be free to set up their own uplinking facilities without going through VSNL or the Department of Telecommunications and without the need for any approvals, except frequency/spectrum coordination.

7.2 Ending Licence & Licence Fees for ISPs

(64) For setting up operations by ISP or CUG, there shall be neither any licensing required nor any licence fee shall be charged; ISPs shall register with TRAI for intimating to them their commercial operations.

7.3 Cost Minimisation for INTERNET Access

(65) DOT shall remove the time-related call tariff for INTERNET Access..

(66) Restrictions on voice-over-data communication over INTERNET shall be withdrawn immediately.

(67) Access to INTERNET through cable TV shall be permitted and necessary changes in the proposed broadcast bill shall be made.

7.4 Inter Networking & Backbone Support to ISPs

(68) ISPs and CUGs should have the freedom to build their own backbone, networking and local access

7.5 India as a Telecom/INTERNET Hub of the Region

(69) Government of India shall promote the creation of a regional telecom hub in India.


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VIII LII-NII-GII & INFRASTRUCTURE

8.2 DOT Backbone

i) DOT achievement and the Last Mile

(70) In the Fibre Optic backbone built by DOT, the ‘last mile’ problem is basically multi-media application oriented and is not a pure and simple telecom capacity provision for the customers/users; the ‘last mile’ solution rides on the Application solutions instead of vice-versa. The entire ‘last mile’ investment is preferably made by private and public sector IT application enterprises. DOT, shall also give 'last mile' linkages taking care to avoid direct or indirect restrictive trade practices.

ii) National High Speed Fibre-optic Network

(71) Bimal Jalan Committee recommendations approved by Cabinet shall be implemented.

8.3 Backbone by Railways, Power Grid etc.

(72) As pointed out by the Jalan Committee, Railways, NIC, DOE, ERNET, Electricity Boards and Power grid must be able to play an effective role in building the NII for which the Government of India shall give necessary budget support.

(73) The Railways, the State Electricity Boards (SEBs) and the National Power Grid Corporation (NPGC) and even the ONGC, GAIL and SAIL who have got rights of way (way-leaves) shall be allowed to host fibre optic backbone. They can contribute to part of the infrastructure by building optical fiber transmission systems either by themselves as elsewhere in the world or in joint ventures with foreign and/ or domestic companies.

8.4 Backbone by Anyone

(74) In the long term ensure that no licensing & policing is required for building the infrastructure and any agency shall be free to undertake this activity; the banks and FIs may be permitted to encourage this by assigning priority.

8.5 LII – Infrastructure

Reforms in spectrum management

(75) Reforms shall be introduced to the system of spectrum allocation so that spectrum can be made available quickly to new users, duly deciding on competing uses on the basis of rational criteria through an efficient, equitable and transparent system of spectrum allocation.

ISM band spread spectrum operations

(76) Certain frequency bands like the ISM bands should be declared open for anyone to set up Spread Spectrum based non-interference type Wireless Equipment for solving the last mile problem between the IT backbone infrastructures and the customers.

Transferring WPC from the Ministry of Communication to TRAI

(77) The Wireless Planning and Coordination Wing shall be transferred to TRAI management along with its allocation of business and budget Head. As it is for EM Spectrum planning, the budget head can be part of the main budget head of the Ministry of Planning.


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IX. IT PRODUCT MANUFACTURE

9.1 HIGH-TECH PARKS

(78) Large Technology Parks shall be set up with special promotional provisions and incentives for manufacture of IT Products. Hardware manufacture has to be prioritised to areas which will be hard to obtain from abroad if the country were to be subjected to the maximum extent of international sanctions. The next in priority is to take up System Engineering of IT Products and Systems so as to save the system engineering costs which account for about 20 to 30 percent of the total cost.

(79) Efforts shall be made to locate Chip manufacturing facilities in India in collaboration with leading international partners. The concept of infrastructurally self-contained self-financing High Tech Habitat applies to IT Product manufacture and Chip manufacture also. Immediate negotiations with the five big chip manufacturers in the world should be taken up on priority giving attractive terms like free land, freedom from customs duty, uninterrupted economical power supply or facility to create their own captive power stations and other infrastructural facilities.


X. IT PRODUCTS, IT SOFTWARE AND APPLICATION DEVELOPMENT

(80) For promoting Indian Software Packages (system as well as application software) users shall be given fiscal incentives for buying Indian packages. A special screening mechanism shall be worked out for identifying the more promising packages developed in India and giving consistent support by the Government as well as the industry for ensuring acceptance in international markets.

(81) Creation of computer software products and packages shall get R&D benefits under Section 35 (2AB) of the Income Tax Act.

(82) Priority shall be given in the TDC Scheme of DOE and ITDP Scheme of NIC to invite proposals from IT companies for development of applications of use to the public, especially in public services and public domain information retrieval and provide development funding (part grant and part loan to be paid back as royalty to the Government) if companies cannot fund the development by themselves. Towards this end, the TDC and ITDP budgets have to be substantially increased.


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XI. IT IN GOVERNMENT

(83) Each Department/Agency in the Central Government and State Governments shall be required to prepare a Five Year IT Plan.

(84) One to three percent of the budget of every Ministry/Department shall be earmarked for applying IT in the Department/sector; this investment will include not only the purchase of IT products, IT Software, but also for training and IT services.

(85) NIC at the national level and Technology service organisations at the State level, shall on the lines of CCTA in the UK, immediately establish 'Framework Contracts' with reputed suppliers to provide a wide range of IT consultancy, specialist services and IT products to Government agencies.

(86) The country shall participate in international projects like 'Government Online' Project of G-8 countries so as to not only learn from the experience of others but also contribute to the global experience in planning and implementing IT projects.

(87) Tele-commuting shall be recognised as a new modality of doing work in an office and Labour Laws accommodating the same shall be enacted; an option shall be given to Government employees to accomplish their work through telecommuting in the framework of 'Management by Objectives (MOB)".

(88) The Government of India shall set up a Central repository of Data elements in Government with the National Informatics Centre.

(89) The recommendations of the TG-MAP Committee for Map and GIS Data Policy approved by the Committee of Secretaries under the Cabinet Secretary, shall be notified by the Ministry of Defence expeditiously.

(90) A computerised National Inventory of Training pertaining to different areas shall be maintained.

(91) A computerised Inventory of Government best practices for electronic access shall be maintained.

(92) Government shall consider imposing IT literacy as an essential requirement for all future Government and public sector employment; in the Annual Confidential Reports of government Employees, a column shall be introduced regarding contribution to IT utilisation in the Department/Organisation.

(93) A National Institute of Smart Government shall be set up to focus on all issues concerning IT supported governance.

(94) State Institutes of Public Administrations shall be re-engineered to help bring about Smart State Governments.

(95) Suitable floor space in Government buildings which are not utilised during non-office hours shall be given to private educational institutions for IT training purposes in return for a proportionate number of free nominations of Government employees for IT training.


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XII. IT SPREAD & IT AWARENESS

(96) Computers and INTERNET shall be made available in every School, Polytechnic, College and public hospitals in the country within the next five years.

(97) Government shall give incentives for the setting up of value added network services by private and public sectors including ATMs, Electronic Kiosks, Telephones, Smart Cards, etc., for providing a 'One-Stop Non-Stop' interface with the public.

(98) To make IT a Mass Movement, the awareness creation strategy paper issued by the Prime Minister's Office shall be fully implemented.

(99) For promoting Electronic Commerce in a time bound manner, a directive shall be given to Sea Ports, Air Ports Authority of India, DGFT, Banks, Container Services, Customs and Indian Railways in accordance with the programme approved in the tenth Export Promotion Board meeting held on 22nd May 1998. Non-compliance in implementing the same by any officers shall be dealt with appropriate departmental actions.

(100) Bar Coding of every items sold in the country shall be made compulsory within a five year period.

(101) STD/ISD Booths shall be upgraded and transformed into Public Telecom Information Centres (TeleInfo Centres) by replacing or adding to the existing telephones a Personal Computer/multimedia PC for which ISDN lines shall be provided, on priority, by the Department of Telecommunications. The setting up of TeleInfo Centres shall not be required to have any licence or payment of licence fees.


XIII. CITIZEN IT INTERFACE

(102) The Blue Print for the Freedom of Information Act that has already been prepared, shall be reviewed and converted into an Act within six months.

(103) The Cabinet decision taken that NIC shall be enabled to make the Government Information other than those having a bearing on security, are made available to the public, should be implemented by additionally empowering NIC to do so without waiting for the clearance of the Departments concerned.

(104) DISNIC Plan Programme shall be made widespread and databases updated online, shall be made available to the public and Panchayats, among others.

(105) COURTIS, PARLIS, CRISPS and other such databases shall be updated online over NICNET and access to public facilitated along with E-mail entry into the Grievances/suggestions database.

(106) Citizen Charter for effective and responsive administration in terms of time-bound service to the public shall be framed and implemented under the coordination of the Department of Administrative Reforms & Public Grievances and hoisted on the official INTERNET Web Site 'India Image' of the Government of India.


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XIV. DATA SECURITY SYSTEMS

(107) A National Computerised Records Security Document shall be immediately prepared for enforcing security requirements by consulting similar documents prepared by SAG, JCB, WECEE, etc.

(108) An Information Security Agency shall be set up at the National level to play the role of Cyber Cop.

(109) A National Policy on Information Security, Privacy and Data Protection Act for handling of computerised data shall be framed by the Government within six months.

(110) Cyber infractions shall be addressed within the legal framework by the Ministry of Law, Justice and Company Affairs.

(111) The cryptology and Cyber Security knowledge and experience developed by the Defence establishments shall be suitably transferred to the civilian information security agencies for wider dissemination in the country to increase information security, network security and bring about a greater degree of secure use of EFT, Digital Signature, etc.

(112) The procedure of keeping records in paper form in STP shall be restricted to a maximum duration of two months after which the records shall be kept only in the Electronic / Magnetic / Optical media.


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XV. IT MANPOWER AND TRAINING

(113) The Malaysian Concept of SMART Schools where the emphasis is not only on Information Technology in Schools, but also on the use of skills and values that will be important in the next millennium, shall be started on a pilot demonstrative basis in each State.

(114) An IT Course Module shall be made a compulsory component of all Degree Courses within one year.

(115) IT shall be made an integral part of the educational system throughout the country within three years.

(116) Specific courses shall be launched in association with the Software Industry and IIMs to provide Project Management skills and develop specialised courses on Software Marketing.

(117) The seven National Level Institutions (IITs, IISc.) shall triple their output of students in IT by suitably restructuring the programme.

(118) NASSCOM's proposal for the setting up of a 'National INTERNET Centre of Excellence (NICE)' to standardise and promote Indian content development on INTERNET shall be fully supported.

(119) The setting up of Indian Institutes of Information Technology (IIIT) one in each of the four regions of the country, as approved by the Union Cabinet as part of the Computer Software Development, Export and Training Policy of 1986, shall be implemented with urgency to make up for the lost time.

(120) A 'National Qualification Framework' shall be established for computerised online objective system of knowledge acquisition; the Korean experiment of 'Educational Credit Bank' shall be implemented in the country.

(121) A National Virtual University shall be set up within a year to achieve excellence as a global hub for distance education.

(122) The Ministry of HRD shall promote the pairing of our Universities with US, Japanese, European and Australian Universities noted for excellence in IT.

(123) A National Level Task Force shall coordinate the setting up of National Digital Libraries Project.

(124) A National Council of IT Education comprising of experts from both the industry and the academicia, shall be set up for defining courses and their content in the light of rapid developments taking place in Information Technology. The Council shall also initiate a 'Teach the Teachers' programme for upgrading on a regular basis the IT knowledge and skills of teachers.

(125) A Law shall be enacted to force IT graduates seeking jobs abroad to pay back to the country the amount equal to the estimated subsidised cost of the higher education; the funds so derived shall be distributed to the training institutions for training more people

(126) A Plan shall be prepared and implemented for utilising the services of the 70,000 IT literate defence personnel retiring every year for propagating the IT culture at sub-district levels.

(127) An Institute for Computer Professionals of India shall be set up on the pattern of the Institute of Chartered Accountants of India; the Institute shall be nucleated by NASSCOM, etc. with initial financial support from the industry and the Government; the Institute shall be given the responsibility as an Accreditation Body for IT Education and Training Programmes with full Government recognition in addition to the DOEACC Programme of the Department of Electronics.


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XVI PROCEDURAL RE-ENGINEERING & CYBER-LAWS

(128) The Indian Telegraph Act of 1885, the Indian Post Office Act of 1888 and the Indian Wireless Telegraphy Act of 1993 shall be suitably modified in the light of the growing predominance of IT in day-to-day life.

(129) A Legislation focusing on Electronic Signature as a means for preventing Electronic fraud and for promotion of online commerce shall stipulate the creation of a certification system for electronic transactions applicable to E-Mail messages and banking operations as well as tele-shopping.

(130) The draft set of Cyber Laws prepared by the Cyber Law Committee set up by the Committee of Secretaries, shall be approved by the Government and implemented, as a first step, within three months.


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