Information Technology is one of the most important industries in the Indian economy. The IT industry of India has registered huge growth in recent years. India's IT industry grew from 150 million US Dollars in 1990-1991 to a whopping 50 billion UD Dollars in 2006-2007. In the last ten years the Information Technology industry in India has grown at an average annual rate of 30%.
The liberalization of the Indian economy in the early nineties has played a major role in the growth of the IT industry of India. Deregulation policies adopted by the Government of India have led to substantial domestic investment and inflow of foreign capital to this industry. In 1970, high import duties had forced IBM to leave India. However, after the early nineties, many multi national IT companies, including IBM, have set up their operations in India. During the ten year period 1992-2002, the Indian software industry grew at double the rate as the US software industry.
Some of the major reasons for the significant growth of the IT industry of India are -
Abundant availability of skilled manpower
Reduced telecommunication and internet costs
Reduced import duties on software and hardware products
Cost advantages
Encouraging government policies
Some of the major companies in the IT industry of India are -
Tata Consultancy Services (TCS)
Infosys
Wipro
IBM
HP
HCL
Cognizant Technology Solutions (CTS)
Patni
Satyam
NIIT
India's IT industry caters to both domestic and export markets. Exports contribute around 75% of the total revenue of the IT industry in India. The IT industry can be broadly divided into four segments -
IT services
Softwares (includes both engineering and Research and Development)
ITES-BPO
Hardware
HR Software
Cost effective payroll and HR software solutions from KCS.
Friday, July 30, 2010
Friday, July 2, 2010
Education System in India
Barun S. Mitra has recently written a thought provoking op-ed in the Wall Street Journal about how the Indian State is trying to regulate innovation out of the educational system by strangulating it. To first put things in perspective, Mitra acknowledges that India’s education system and its engineering schools in particular produce some of the world’s brightest graduates for its increasingly knowledge-intensive economy. However, he also cited some of the following and somewhat shocking facts and statistics about the vast majority of graduates and the workforce that India’s education system currently produces:
- Only 5% to 7% of India’s current workforce has undergone any formal training in a skill.
- Nearly 70% of India’s current workforce may not have even completed their primary schooling.
- Approximately 135 million children are enrolled in primary schooling and about 15 in college but only 2.3 million will graduate.
- Just 12% of the 18-24 age groups enrol for any sort of post-high-school courses.
- Only 10% to 15% of all graduates are actually employable.
- Less than half of the 200,000 post graduates in the sciences are employable.
- Only 25% of engineering graduates are employable and approximately 64% of employers are not satisfied with the skills of engineering graduates.
- For 2008, Infosys spent US$5,000 to retrain each of the employees it hired while Wipro spent about 1% of its annual revenues on retraining the fresh graduates it recruited.
To address this situation, India passed the Right of Children to Free and Compulsory Education Act in 2009. The new law, which took effect last April, requires the government to educate all children for free until the age 14 and for all primary schools to have one teacher for every 30 pupils (instead of today’s average of 50). Hence, state-run schools will be upgraded while private schools will be forced to reserve one quarter of their slots for children who come from impoverished backgrounds and all private schools will need to win official government recognition within three years – or else be shut down. All told, the law will cost about US$35 billion over the next five years.
However and when reporting about the new law, the Christian Science Monitor noted that state-run schools are considered to be so shoddy that 50% of parents in urban area have chosen to send their children to private schools where they receive a better education. In fact, the Christian Science Monitor interviewed a mother who chooses to spend 300 rupees (US$6.60) a month to send her child to a private school located in a slum. She was even quoted as saying that its much better than any government run school and that everybody says so.
This leads back to Mitra’s criticisms as he noted that surveys have shown that 40% to 50% of children from the slums of Delhi actually attend private informal schools. However, he also noted that the setting up of private schools is already completely tied up by the need for government licenses and permits. In fact, it requires 30-35 types of government permissions just to set up a school in Delhi and Mitra noted that hardly any of the coaching institutes that prepare students for engineering and medical colleges would be able to meet the new regulatory standards to qualify as a school. Moreover, he noted that senior officials at education related regulatory bodies have been accused of corruption and that one Kolkata newspaper has estimated that starting a technical or professional institute would cost US$10,000 to US$50,000 in bribes while university status would cost US$1-2 million in bribes.
Hence, we want to know what you our readers think of the new Right of Children to Free and Compulsory Education Act and India’s education system in general. Will the Act do anything to fix the problems that plague India’s education system or will companies, especially those in the IT services and outsourcing industries, still need to spend considerable amounts of money to retrain the graduates that India’s education system produces?
- Only 5% to 7% of India’s current workforce has undergone any formal training in a skill.
- Nearly 70% of India’s current workforce may not have even completed their primary schooling.
- Approximately 135 million children are enrolled in primary schooling and about 15 in college but only 2.3 million will graduate.
- Just 12% of the 18-24 age groups enrol for any sort of post-high-school courses.
- Only 10% to 15% of all graduates are actually employable.
- Less than half of the 200,000 post graduates in the sciences are employable.
- Only 25% of engineering graduates are employable and approximately 64% of employers are not satisfied with the skills of engineering graduates.
- For 2008, Infosys spent US$5,000 to retrain each of the employees it hired while Wipro spent about 1% of its annual revenues on retraining the fresh graduates it recruited.
To address this situation, India passed the Right of Children to Free and Compulsory Education Act in 2009. The new law, which took effect last April, requires the government to educate all children for free until the age 14 and for all primary schools to have one teacher for every 30 pupils (instead of today’s average of 50). Hence, state-run schools will be upgraded while private schools will be forced to reserve one quarter of their slots for children who come from impoverished backgrounds and all private schools will need to win official government recognition within three years – or else be shut down. All told, the law will cost about US$35 billion over the next five years.
However and when reporting about the new law, the Christian Science Monitor noted that state-run schools are considered to be so shoddy that 50% of parents in urban area have chosen to send their children to private schools where they receive a better education. In fact, the Christian Science Monitor interviewed a mother who chooses to spend 300 rupees (US$6.60) a month to send her child to a private school located in a slum. She was even quoted as saying that its much better than any government run school and that everybody says so.
This leads back to Mitra’s criticisms as he noted that surveys have shown that 40% to 50% of children from the slums of Delhi actually attend private informal schools. However, he also noted that the setting up of private schools is already completely tied up by the need for government licenses and permits. In fact, it requires 30-35 types of government permissions just to set up a school in Delhi and Mitra noted that hardly any of the coaching institutes that prepare students for engineering and medical colleges would be able to meet the new regulatory standards to qualify as a school. Moreover, he noted that senior officials at education related regulatory bodies have been accused of corruption and that one Kolkata newspaper has estimated that starting a technical or professional institute would cost US$10,000 to US$50,000 in bribes while university status would cost US$1-2 million in bribes.
Hence, we want to know what you our readers think of the new Right of Children to Free and Compulsory Education Act and India’s education system in general. Will the Act do anything to fix the problems that plague India’s education system or will companies, especially those in the IT services and outsourcing industries, still need to spend considerable amounts of money to retrain the graduates that India’s education system produces?
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