Tech and a Modern Superpower:

The foundation of India's economic boom can be traced back to the information technology (IT) sector. The intersection of technology with traditional sectors can prove a game changer.

Once known predominantly for its agriculture and traditional industries, India is now heralding an era of digital revolution, rapidly positioning itself as a global tech superpower. From bustling technology hubs in Bangalore and Hyderabad to innovative startups sprouting across the nation, the landscape of India's economy is changing at an unprecedented pace, driven by technology.

The foundation of India's economic boom can be traced back to the growth of the Information Technology (IT) sector. The late 20th and early 21st centuries marked a period of rapid globalization, with India emerging as a key player in software development and IT services. Companies like Infosys, TCS, and Wipro became household names, not just within the confines of India but across the globe. These organizations helped put India on the world map, showcasing the country's prowess in technology and its capacity to offer world-class services at competitive prices.

The startup ecosystem in India has been a significant driver of economic growth. With over 50,000 startups, including numerous unicorns, India is leveraging technology to solve a myriad of challenges – from fintech and e-commerce to healthcare and education. Innovators and entrepreneurs are harnessing the power of Artificial Intelligence (AI), machine learning, and blockchain to create solutions that are not only profitable but also socially impactful.

The Indian government's focus on creating robust digital infrastructure has played a pivotal role in this economic transformation. Initiatives like Digital India, Aadhaar, and UPI have not only brought technology to the masses but have also revolutionized how services and subsidies are delivered. UPI's success in transforming digital payments is a case in point, making financial transactions seamless and accessible to millions, thus fostering a more inclusive digital economy.

The boom in the technology sector has also led to a paradigm shift in education and skill development. With an emphasis on STEM education from an early age, India is preparing its youth for the jobs of the future. Moreover, the proliferation of online learning platforms has democratized access to quality education, allowing individuals to upskill and reskill in line with the evolving demands of the tech industry.

There is, however, a warning to be sounded here. We have gone from having 1.2 lakh engineering graduates during the early part of this century, when Indian IT services was just rising, to having more than 15 lakh graduates today. I did a quick, back of the envelope calculation to see how many engineers we are producing (while correcting for people of college going age). It turns out, that per capita of college age children, India is producing twice as many engineers as the US is. This is telling. Since a lot of technological innovation comes from the US, and if that country can get away with half as many engineering graduates, then we must do some soul searching before we encourage our children to become engineers.

There is a demand and supply mismatch – we have far more engineers than there are jobs, and as a result, Indian heritage IT services has been taking unfair advantage of this mismatch. IT Service majors can with impunity pay only as much to these engineering graduates as they did twenty years ago. Witness a local IT services player that dialed down starting salaries from Rs. 6.5 lakh per annum to Rs. 3.5 lakh per annum for a cohort of new joinees, adding meanwhile that they should be “lucky to have a job”, or words to that effect. Also witness last week’s discussion from another IT major trying to defend the company by saying that they had different categories of “fresher” workers and that the ones from IIT’s were paid more. There was no discussion about how many IIT graduates they in fact manage to hire, or about what the overall composition (and subsequently, compensation) of their incoming class of fresher hires was. Gone are the days when parents used to excitedly tell everyone who was willing to listen that their son or daughter was making more than they were though still fresh out of school. Also, the 185-year waiting period for IT workers applying for a “green card” in the US has removed the sheen of being deputed to that country for work reasons. For employees, the hey day of “foreign” postings is over. They will have to seek their fortunes in India.

Apart from the issue identified above, this rapid growth is not without other challenges. Bridging the digital divide, ensuring cybersecurity, and managing the societal impacts of automation and AI are areas that require ongoing attention. Moreover, as the Indian tech sector scales new heights, it is imperative to ensure that growth is sustainable and inclusive. It certainly isn’t for fresh engineering graduates, as we have seen. Infosys went from hiring 50,000 freshers in the last fiscal to zero in this one – a frightening prospect.

As India continues to embrace technological advancements, the potential for growth is limitless. The intersection of technology with traditional sectors like agriculture and manufacturing can unlock new efficiencies and drive further economic growth. The burgeoning tech workforce, coupled with a culture of innovation, positions India favorably in the global arena. Technology is not just a sector within the Indian economy; it is a catalyst that is propelling the nation towards unprecedented growth. As India stands at the cusp of a technological renaissance, it is set to redefine its narrative from being a follower to a global leader in the digital era. The future, undoubtedly, looks promising and is replete with opportunities brought forth by the power of technology.

This article first appeared in the FInancial Express. For this and more, see

Financial Express