Indian IT industry and domestic market.

The UPA government’s decision to launch a national project that will give every citizen a unique biometric identity card, and to put Mr. Nandan Nilekhani as its chief, has a potential which can transform Indian software industry.

First, it sends a strong signal that use of information technology for development has arrived. Ever since importance of Indian IT industry became evident, there has been a debate if it can help Indian context of development. While IT’s benefits are obvious, it is still seen as a gap, much like generation gap and has created difference between the halves, those having IT compatibility and those who are not. Initially AP chief minister Chandrababu Naidu showed how IT can be used while managing the government, there after several states implemented IT in administration and governance.

Secondly, a large government spending on IT will bring about a huge change in the software industry and eventually in hardware industry. Currently domestic share compared to software export is way too less. Compare that with China, though software export of China might be less, their domestic industry is much bigger than their software export industry. Thus, China’s software industry is still bigger than Indian software industry (Though India is bigger software exporter).

Thirdly, this initiative would act as a means to showcase the power of IT to sectors which have not embraced IT yet, like Public Distribution System, PWD, National Highway program etc. This awareness would generate the much needed boost for the domestic IT market.

Above all, this identity card initiative would result in much better interface between government and public considering multiple advantages this card brings to the table.