On Friday, a draft of an information technology (IT) policy was unveiled. The policy aims to provide impetus to the IT sector and to help it triple its size to $300 billion (Rs14.74 trillion) by 2020. It plans to do so by administering incentives
In its outlook, the policy is similar to its cousin meant for the manufacturing sector.
It is bound to be less than successful, if not an outright failure.
The problem, as usual, lies in bureaucrats—who have little expertise in the IT sector—handling incentives. One does not have to look far: India’s experience from 1952-1991 in “incentivizing” industries resulted in inefficient industries. The IT sector is no different.
In any case, the government has no business giving incentives to private companies. Our IT sector has sufficient experience to compete in any market.