IT Taskforce

IT task force Diary

New Delhi - July 6, 1998


Path-breaking recommendations in the 'IT Action Plan' submitted to the Prime Minister by the National Task Force on Information Technology and Software Development

Prime Minister sets 10-day deadline for examination of the recommendations by a four-member ministerial committee

The 'Information Technology Action Plan' prepared by the National Task Force on Information Technology and Software Development contains major initiatives to remove bottlenecks in the path of rapid growth of IT in India. Shri Jaswant Singh, Deputy Chairman of the Planning Commission and Chairman of the Task Force submitted the report to Prime Minister Shri Atal Bihari Vajpayee on July 4, 1998.

The 'IT Action Plan' contains 108 recommendations covering both bottleneck issues and promotional measures. When implemented, they are expected to create more than ten lakh jobs in the next five years and increase annual software exports from India to US $ 50 billion by the year 2008. The implementation of the IT Action Plan would also ensure nationwide penetration of computers and the Internet mainly in education, small and medium enterprises and in the vital area of Government-Citizen interface.

Acting quickly upon the receipt of the 'IT Action Plan', the Prime Minister has set up a four-member ministerial committee to examine its recommendations and give their report within 10 days. The four ministers are Finance Minister Shri Yashwant Sinha, Communications and I&B Minister Shrimati Sushma Swaraj, Human Resource Development Minister Dr. Murli Manohar Joshi and Defence Minister Shri George Fernandes.

The Task Force was constituted on May 22 by a notification of the Prime Minister's Office and was given two assignments. The first one, to be completed in 30 days, required identification of bottlenecks in the path of development of IT in India and recommend measures to remove them. The second task, to be completed within 90 days, was the formulation of a draft of the national Informatics Policy with the aim of enabling India to emerge as an Infotech Superpower in the next decade.

The significant feature of the 'IT Action Plan' is that most of its recommendations have already received prior concurrence of the ministries and departments concerned. This was due to the intensive discussions the Task Force held with the ministers and senior officials of the respective ministries. Secretaries of the ministries and departments concerned are already members of the Task Force.

Some of the de-bottlenecking measures suggested by the IT Action Plan in the areas of finance and revenue are: 100% depreciation on all IT products in two years; software and IT services industry to be treated as a priority sector by banks for the next five years; tripling of the working capital requirements for the industry from the current level of Rs. 400 crore to Rs. 1,200 crore by the year 2000; and incentives for proliferation of software development in smaller cities and towns.

Since knowledge capital is the critical input in IT enterprises, the report has sought issuance of 'sweat equity' to employees. It has also urged the setting up of atleast four venture capital funds with a corpus of not less than Rs. 50 crores each to cater exclusively to the needs of ideas-rich IT entrepreneurs. Another manor step suggested the blanket approval for Indian IT companies to acquire foreign companies out of their export earnings.

The Task Force has urged the Government to advance the time frame for acceding to WTO-ITA's duty related schedule from the year 2005 to 2002. This would mean zero duty on all IT products by the year 2002, a measure that promises to bring down the cost of IT products in the country. Also, it has recommended broadening of the definition of 'software' to include the entire range of 'IT software' as per the WTO-ITA norms.

The recommendation to exempt software developers and exporters from physical and customs bonding at various export promotion schemes such as STP, EOU, EPZ, etc. is aimed at freeing the software industry from locational restrictions.

A special thrust area in the 'IT Action Plan' is the creation of a liberalised policy and procedural environment in the telecom sector which provides the key infrastructure for the IT industry. A large number of initiatives have been recommended in this area. They include: ending of the VSNL monopoly on international gateway for Internet access; access to Internet through Cable TV; Internet access nodes to be opened by DoT and authorised ISPs in all district headquarters by January 26, 2000, and, until then, Internet access from the nearest node on local call rates; upgradation of STD/ISD booths into full-service 'information kiosks' offering e-mail, voice mail and Internet; and permission for the Railways, Defence, State Electricity Boards, National Power Grid Corporation as well as organisations like ONGC, GAIL and SAIL to use their fibre optic backbone to provide service to the public by interfacing with existing or new public networks.


The 'IT Action Plan' has recognised the importance the 'last mile' problem in reaching Internet and IT services to the end-user. Towards this end, it has recommended free permission for 'last mile' linkages by either fibre optic or radio communication for IT application enterprises. Another measure in this direction is the opening of the radio frequency band in the range of 2.4 - 2.485 GHz for public wireless services.

The report has urged the Government to allow interconnectivity between public and private networks; immediate clearance of bandwidth requests from public or private sector Software Technology Parks; steps to boost 'Call Centre' business in India to handle employment-intensive back-office jobs of overseas organisations.

The Task Force has recommended a slew of measures to maximise the use of IT in government. Some of these measures are: Each ministry/Department in the government to earmark 1-3% of the budget for IT; each ministry/department to prepare a five year IT plan; A fund of Rs. 700 crore to tackle the Y2K problem in the computers in government organisations; IT literacy to be made an essential requirement for all future government and public sector employment.

The report has outlined a novel 'Operation Knowledge' campaign to universalise IT education and IT-based education in the country. To increase PC availability in the education sector, it has recommended the launch of 'Vidyarthi Computer Schemes', 'Shikshak Computer Scheme' and 'School Computer Scheme' to enable every student, teacher or school desirous of buying computers to do so under attractive financial packages. It has also urged the Government to make Internet available to every school, polytechnic, college and university by the year 2003. As the first step in this direction, it has recommended the networking of all engineering colleges, medical colleges and universities before the year 2000.

The need to give IT a strong rural orientation has been emphasised in the report. Under the aegis of the Task Force, a unique 'Wired Villages' pilot project has already been undertaken at the Warana Nagar Cooperative Complex in Maharashtra.

With a view to revitalise education in the Hindi-speaking States by boosting IT education and IT businesses, a number of projects have been suggested by the Task Force. One of them is the development of Allahabad as a centre of excellence for IT.

Another new initiative in the 'IT Action Plan' is the participation of the Defence Forces in meeting the country's IT objectives. The Armed Forces, it is recommended, shall integrate far-flung and remote areas in the North East, Ladakh, Andaman and Nicobar Islands, Lakshadweep and Minicoy Islands, and border areas of Rajasthan, Kutch and Himachal Pradesh through IT penetration as part of their Civic Action Programme.

In the 21st Century, the world will be governed by Electronic Commerce. India needs to have a new set of Cyber Laws to deal with this scenario. The Task Force has recommended early introduction of cyber laws to facilitate electronic data interchange and electronic funds transfer through suitable encryption mechanisms and adoption of digital signatures.

With more than 1,500 manhours of input, the 'IT Action Plan' is the most comprehensive and serious effort yet in dealing with the various issues involved in boosting Information Technology in India. The preamble to the report states: "This is the first time in India that representatives of so many ministries, departments, industry associations, business houses, educational institutions and State Governments interacted so intensively and in such a short period of time to cover so many bottleneck and promotional areas in Information Technology. It is also the first time that agreement was reached and concurrence received on most points in the Action Plan".

After the submission of the 'IT Action Plan' the Task Force has begun work on the formulation of the National Informatics Policy. This document will be submitted to the Prime Minister in the stipulated 90-day period.