IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this paper or follow this series

IT and ITES as an Engine of Growth : An Exploration into the Indian Experience

  • Seema Joshi

    (IEG)

Registered author(s):

    India emerged as one of the fastest growing economies of the world during the 1990s because of the spectacular dynamism shown by the services sector. Indias services sector has been burgeoning fast and one of the major drivers of the growth of services sector is information technology (IT) and information technology enabled services (ITES). It is well documented in literature that IT impacts growth by different channels. In this study we try to empirically verify the question : Can IT and ITES be an engine of growth? Using micro-level data of 100 households of 20 IT and ITES firms along with secondary data we tried to estimate the extent of indirect employment generation at macro level and the share of IT and ITES in total employment and total value added. According to our study, one job for skilled professional employed in IT and ITES spins off jobs for 0.48 semi-skilled, low skills or unskilled workers. As per our estimates, the 16 lakh workers who are expected to be directly employed in IT sector in the FY 2008 would generate secondary employment for 7,68,000 people which would constitute 0.16 % of total employment. However, the share of consumption expenditure of 16 lakh professionals would be 20% of total value added. Assuming the consumption expenditure of the IT and ITES workers and total value added to be the same/constant when we tried to assess the contribution of consumption expenditure of 2.3 million workers (who are projected to be directly absorbed by IT sector by 2010, NASSCOM, 2005) to total value added it comes out to be 29% of total value added. The study says that the proportion of IT-ITES in total employment may be small but its contribution to total value added is still very high. Indeed IT and ITES can be an engine of growth in Indias economy by way of generating demand impulses in the economy as has been hypothesized and shown through the present study. Keeping in view the contributions of this sector and its huge untapped potential as evident from the present study and various other studies, there is a need for introduction and implementation of policy initiatives to address the challenges faced by this sector and to sustain the growth driven by the services sector.

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

    File URL: http://130.56.61.71/node/22926
    Download Restriction: no

    Paper provided by East Asian Bureau of Economic Research in its series Development Economics Working Papers with number 22926.

    as
    in new window

    Length:
    Date of creation: Jan 2009
    Date of revision:
    Handle: RePEc:eab:develo:22926
    Contact details of provider: Postal: JG Crawford Building #13, Asia Pacific School of Economics and Government, Australian National University, ACT 0200
    Web page: http://www.eaber.org

    More information through EDIRC

    References listed on IDEAS
    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

    as in new window
    1. Arora, Ashish & Athreye, Suma, 2002. "The software industry and India's economic development," Information Economics and Policy, Elsevier, vol. 14(2), pages 253-273, June.
    2. Martin L. Weitzman, 1995. "Recombinant Growth," Harvard Institute of Economic Research Working Papers 1722, Harvard - Institute of Economic Research.
    3. Lars-Hendrik Röller & Leonard Waverman, 1996. "Telecommunications Infrastructure and Economic Development: A Simultaneous Approach," CIG Working Papers FS IV 96-16, Wissenschaftszentrum Berlin (WZB), Research Unit: Competition and Innovation (CIG).
    4. Pohjola, Matti (ed.), 2001. "Information Technology, Productivity, and Economic Growth: International Evidence and Implications for Economic Development," OUP Catalogue, Oxford University Press, number 9780199243983, March.
    Full references (including those not matched with items on IDEAS)

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    When requesting a correction, please mention this item's handle: RePEc:eab:develo:22926. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Shiro Armstrong)

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.