The Government of India visualized the importance of electronics and information technology (IT)

and its critical role in the economic growth of the country, and as a result, established the Department
of Electronics (DOE) in June, 1970 and the Electronics Commission in February, 1991. The
objectives of the Department were to review the field of electronics with regards to research,
development and industrial operations, to formulate policy in the field of electronics and IT and to
direct implementation of all measures, both promotional and regulatory, to attain self-reliance. In
1975, the Government of India strategically decided to take effective steps for the development of
information systems and utilization of information resources, and also for introducing computer-based
decision support system in government ministries and departments to facilitate planning and
programme implementation to further the growth of economic and social development (Informaticsled development). In view of its relevance for all round socio-economic growth, and also to get
benefit of the emerging digital economy, the Central Government has created a new Ministry of
Information Technology (MIT) in 1999 by merging the DOE, National Informatics Centre (NIC) and
Electronics and Software Export Promotion Council. The 1970s saw the Policies of self-reliance and
promotion of an indigenous IT industry in India. The idea that import of technology could
accelerate national development in the field of electronics and computer, had gained support in the
Policies/Statements of the Central Government announced between 1978-1984.Many State/Central
Electronics Corporation (i.e. KELTRON, MELTRON, UPTRON,WEBEL,HARTRON, ESPL,
KEONICS, ELCOT, BEL, ECIL)were established in 1970s and 1980s to develop electronics industry
in the states. Various policy announcements like the Import Policy (1983), Computer Policy (1984),
Electronic Policy (1985), and Software Policy (1986) laid the foundations for the liberalized growth
of IT industry in the country. It was recognized that IT would become strategically as important to the
Indian economy as oil.

1984 Golden Year for Indian IT industry

NCP New Computer Policy, introduced in 1984, has changed the face of IT industry as well as the
economic growth of India. The policy has brought up many changes and reforms in the field of IT.
According to the policy, markets costs would we slashed for IT companies and were given many types
of subsidies. One of the most important benefits avail for IT firms was financial backup from banks
and some venture capitalists.
There is no doubt that Indian IT companies such as Tata Consultancy Services (TCS), Wipro, Infosys,
HCL have spread their solutions across the world and brought Indian IT on the global platform. No
wonder and no magic! Its all because of our Governments foreseen activities and the NCP.

Software Policy (1986)

The first Computer Policy of 1984 and Software Policy of 1986 emphasized the concept of software
development and export through data communication links. This policy's objective was to develop
software in India using Indian expertise on sophisticated computers, which were being imported duty
free. This way, one could make use of the low cost expertise available in India and avoid the expense
of time and cost in traveling abroad.
However, there was a substantial cost involved in the data communication links. As per the policy,
companies were allowed to establish data communication links by their own initial investments. The
ownership of the equipment and the operations of the same Gateway would remain with VSNL and
VSNL would pay back to the user over a prescribed period after deducting the operational
maintenance costs.

This used to be as high as Rs.45.00 lakhs per 64 Kbps for an Indian half circuit per year.
Texas Instruments has the credit of being the first software company with an Offshore Development
Facility in Bangalore. Texas Instruments was also the first to establish its own Gateway at Bangalore
with the support of VSNL on a 'build & operate' agreement.
Except Texas Instruments, no other company succeeded in establishing a similar facility. It was very
expensive for smaller companies and other offshore development users to afford the high cost of the
data communication.
The Origins of Policy-Making in the Computer Industry
Though the first electronic computer arrived in India in 1955, the origins of a computer policy dates to
August 1963 when the Committee on Electronics was established following Indias defeat in the war
with China the previous year.5 The chairman of the committee was Homi J. Bhaba, a nuclear scientist
who was also the chairman of the Atomic Energy Commission (AEC). Since electronics was
perceived to have a strategic role in national development and security, the Bhaba committee, as it
was widely referred to, recommended ways to strengthen the technological base in electronics in the
country. In its report submitted in February 1966, the committee argued that computers were playing
an increasingly important social and scientific role. It also constituted a Working Group on computers
under Prof. R. Narasimhan of the Tata Institute of Fundamental Research (TIFR), Bombay, an
institution controlled by the AEC.