Need For Foreign Capital In Telecom Sector Underlined

Speakers at the session on information technology at 'Desti- nation India, the global summit on investment opportunities, stressed the need for foreign investment in the telecom and information technology sectors here yesterday.

Opening the session, M P Modi, chairman of the telecom commission, said the department of telecommunications annual investment of $ 2.3 billion (about Rs 8,000 crore) was not enough to meet the challenges resulting from the convergence of telecom and computer technologies. The Indian market had become attractive both in terms of volume and contemporary technology, he added.

R Basu, secretary, department of electronics, said the share of IT products in total electronics production is expected to go up from the current level of 29.7 per cent to 51 per cent by the last year of the ninth plan. The projected growth of the IT sector was 35.7 per cent and that of computer software above 40 per cent, he felt.

 

Basu said the projected growth of the information technology sector was 35.7 per cent in dollar terms and that of computer software above 40 per cent. The share of consumer electronics in total electronics production is expected to fall in the next five years, he said.

Manufacturers Association for Information Technology president Vijay Thadani said MAITs vision was to provide world class IT coverage through the national information infrastructure (NII) and to provide for a $14 billion (Rs 48,300 crore) industry by 2000-01 up from the present $1.25 billion (about Rs 4,300 crore).

Thadani cited an report by Arthur D Little and termed Indias hardware capacity as less known. The strategy for future growth, Thadani added, was to focus on contract manufacturing, lay greater emphasis on training and increase IT usage through local language applications and NII.

National Association of Software & Service Companies (Nasscom) executive director Dewang Mehta said the fact that 43 of the top 50 US software companies had already set up base in India was testimony to Indias potential in the business.

Mehta predicted that India would emerge as the Silicon Valley of the world by the year 2010. Software exports have been growing at 40-50 per cent over the last five years and despite a growing base we intend to take to 100 per cent a year, he added. He projected software exports of $3.6 billion (Rs 12,420 crore) and a domestic software market of $2.5 billion (Rs 8,625 crore) by the turn of the century.

Answering a question during the interactive session, Modi said that the process of rebalancing accounting rates in international telecom services was on and India would follow this trend. The number of 64 kbps leased circuits had grown from four in 1991 to 400 last year.