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History of India's IT odyssey

Subir Roy  |  New Delhi 

The popular media in India has been extensively covering the Indian software story ever since it became visibly successful around the turn of the century. As the success has proved durable, the need to know how it all began and grew to its present state has become acute. This book succeeds in filling that gap admirably. It is a comprehensive and detailed history of the Indian IT industry, made possible by the use of invaluable archives and conversations with many of the key players. It is also very accessibly written.

Dinesh Sharma begins by recording how the first computers were installed in India. Among them was the machine installed in the Indian Statistical Institute near Calcutta in 1956. Tata Institute of Fundamental Research in Bombay built its own in 1960 which came to be called TIFR Automatic Calculator. A fascinating vignette from those days is the tussle between P C Mahalanobis and Homi Bhabha, both close to Jawaharlal Nehru, to have India’s first computer centre installed in their respective turfs. Bhabha won and over the years ISI fell back. The early computers created capabilities in hardware design, software programming, maintenance and training in the late ‘50s and ‘60s.

Despite this enlightened early start the government and political thinking of the day got in the way of quick progress. Belief in total self-reliance and control on import of technology took their toll. It took a large public sector concern in the ‘70s anything upto seven years to import a computer. The Electronics Commission wanted to develop in India fully indigenous computer systems and components, with technology imports allowed only for peripherals and some components. The first voice of reason came from the report of the Mantosh Sondhi committee appointed by Morarji Desai which found the situation “stifled initiative and enterprise” with computer import proposals by industry submitted to “needless and rigid control”.

Change came in the early ‘80s when a changed Mrs Gandhi returned to power and Rajiv Gandhi began to influence policy long before he himself became prime minister. So when he came to power the groundwork for a liberalised regime in electronics, computers and telecommunications had already been done. Sharma succinctly observes that “if Nehru was the political patron of Indian science, Rajiv was the political patron of Indian technology.” In the Nehru era science developed through politician-scientist alliances, in the Rajiv era technology developed through politician-technocrat alliances.

The restrictions on imports and a hard line with the operation of foreign players, culminating in the departure of IBM in 1978, had a huge beneficial effect. The late ‘70s and early ‘80s saw an Indian effervescence in hardware manufacturing led by firms like DCM, HCL and PSI which designed and manufactured calculators, mini and micro computers and eventually personal computers. But the liberalisation introduced in the ‘80s in imports and joint ventures both closed the technology gap in the country and dealt a blow to Indian R&D. A further blow was the foreign exchange crisis in the late ‘80s which raised duties. This made hardware firms look for new areas of business, like software.

Contrary to popular belief, the government played a critical midwife’s role in making the Indian software saga happen. The National Centre for Software Development and Computing Techniques is estimated to have turned out one-third of software technologists in the country in the ‘80s. Some of the resultant skills strength found reflection in HCL’s decision to first shut down its US operations in 1989 because of mishaps and then reversing the decision when customers were not ready to part with HCL’s software engineers and were ready to pay their salaries. Thus was born software services and also onshore development. And offshore development finally took off with the coming of the software technology parks with satellite links.

There are many subplots in the book that can be pursued with relish. One is the rise and fall and rise of IBM, another is how the railways excelled in passenger reservations computerisation (the job was given to CMC) and made a hash of computerisation of freight movement (it decided to handle the job itself).

A key conclusion that Sharma draws is that “the government’s role in seeding, nurturing and developing first the electronics and computer hardware industry, and then the IT industry at different points in time was pivotal.” But the government’s benevolence was directed towards the public sector. The bias against foreign capital prevented India from hosting US companies for electronics manufacturing, who went to Hong Kong, Taiwan and Singapore. Indira Gandhi’s head fully turned during her second regime from 1980. The supportive policies, beginning with those she introduced and culminating in the tax break for software exports in the 1991 budget, enabled the software saga.


Dinesh C Sharma
HarperCollins India
488 pages; Rs 595

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First Published: Thu, February 26 2009. 00:47 IST