The development of computing in India is inextricably intertwined with two interacting forces; the political climate (determined by the political party in power) and the government policies, mainly driven by the technocrats and bureaucrats who acted within the boundaries drawn by the political party in power, besides some external forces.
In a paper published in January- March 2014 in IEEE Annals of the History of Computing, Prof. V. Rajaraman from the Supercomputer Education & Research Centre, IISc, has summarized the key points from his monograph “The History of Computing in India (1955-2010)”, published by the IEEE Computer Society. Prof. Rajaraman has identified four break points which occurred in 1970, 1978, 1991, and 1998 which changed the direction of growth of computing in India. In 1970 the Department of Electronics was established to promote the growth of Electronics and Computing and led to the establishment of a Computer division in the public sector company ECIL. 1978 saw the exit of IBM from India and the entry of private sector to manufacture computers. The liberalization of the Indian economy in 1991 saw the emergence and double digit growth of software service companies primarily in the private sector with significant policy support by the government. The potential of IT as an engine for growth was realized in 1998 when the Prime Minister of India declared IT as India’s future.
Post-independent national leaders envisioned the coexistence of private and state enterprises. Jawaharlal Nehru had great faith in science and technology as engines of economic growth. He was convinced that India required rapid industrialization to reduce poverty. This was reflected through the passing of Scientific Policy Resolution by the parliament in 1958.
The history of computing in India can be traced back to 1950’s. The first group to build a digital computer in India was led by R Narasimhan at the Tata Institute of Fundamental Research (TIFR), Bombay. This group started building a computer, the TIFR Automatic Computer (TIFRAC), in 1955 and completed it in 1959. It had 2,048 word core memory (40-bit word, 15 microsecond cycle time) and a cathode ray tube output unit. It was used for solving physics problems at TIFR and also by the scientists at Atomic Energy Establishment and some universities. This project proved that Indians could design a computer and use it effectively.
During the 1960s, computers were not considered a priority area that deserved foreign exchange outflow. IBM and the British Tabulating Machines (which was later named International Computers Ltd., ICL) were already selling mechanical accounting machines in India. Because importing computers using foreign exchange was difficult, IBM and ICL applied for licenses to manufacture computers in India. IBM then started manufacturing punch card machines and exported them.
Later, the Department of Electronics funded a computer division in the public sector company, Electronics Corporation of India Limited to manufacture and market computers. ECIL designed TDC 12, a 12-bit real-time minicomputer, in 1969. Meanwhile, technology was changing. TDC 12 was upgraded in 1974 to TDC 312 and was followed by TDC 316, a 16-bit computer built in 1975. In 1978, ECIL manufactured a microprocessor-based system MICRO 78. ECIL sold 98 computers between 1971 and 1978, mostly to government laboratories and universities. An important contribution of ECIL was providing “ruggedized” computers for the Indian Air Force’s Air Defence Ground Environment Systems.
Rajiv Gandhi who was given the responsibility to steer the Asian Games held in Delhi in 1982 insisted that all the clerical chores be computerized using locally made computers and software developed by NIC. It was a resounding success and convinced Rajiv Gandhi of the importance of computers. A liberalized policy on minicomputers was announced in 1984 as soon as Rajiv Gandhi became the Prime Minister. It allowed private sector companies to manufacture 32-bit machines, removed constraints on the number of computers a company could manufacture, allowed assembled boards with microprocessors and interface electronics to be imported along with application software, and reduced import duty.
The period from1978 to 1990 was also marked by a number of initiatives taken by many organisations across the country. The computerisation of the Indian Railways seat reservation system began in 1984 and was completed in 1986. The entire software effort was by done by Indian programmers with no “foreign consultants.” The reservation system using computers was an eye opener to the general public -- it demonstrated the advantages of using computers.
“There was an attitudinal change among both the general public and white collar workers about computerization”, explains V Rajaraman of IISc. This was the beginning of the acceptance of computers and the realization that in a country with large volumes of data to be processed, the use of computers is inevitable. Some bank unions also accepted computerization that they had opposed earlier.
The minicomputer policy of 1978, which was announced after the exit of IBM from India, opened up the computer industry and saw the emergence of a number of technical entrepreneurs who started computer manufacturing operations, like WIPRO and HCL that are still around today. The 1984 liberalization policy had a deeper impact: within two years of the announcement of the new policy, the growth of computers went up by 100 percent, and the cost went down by 50 percent.
In 1991 India was facing a difficult economic situation in terms of external debt. The International Monetary Fund and the World Bank bailed India out, and imposed a set of conditions that forced India to liberalize its economy.
A number of concessions were given to software companies after liberalization in 1991. The import duty on computers used for software export was abolished. Software companies’ export earnings were made tax free for 10 years. Multinational companies were allowed to operate in India with 100 percent equity. According to N.R. Narayana Murthy, one of the founders of INFOSYS, a spectacularly successful IT software services company, three other policy changes significantly altered the business environment: easier convertibility of rupees to hard currency, permission to raise capital through initial public offerings (IPOs), and the abolition of duties on imported software tools.
With the changes in the government policies, there was a sudden spurt in the activities of
Indian software companies. Earnings from exports, which were around US$128 million during 1990–1991 went up to around US$1.76 billion in 1997–1998, an average growth of 45 percent each year. Indian software companies invented what is known as the global delivery model (GDM) and the 24- hour workday for the IT industry.
Compared with the investment in education and research, the investment made in computer manufacture by the government companies did not have the same multiplier effect. The investment, however, did meet some strategic requirements in defence and atomic energy. A slew of liberalized policy initiatives taken in the mid-1980s and the early 1990s led to an exponential growth of IT companies in India.
About the paper
A report on the topic was published recently in the journal- IEEE Annals of the History of Computing.
About the author
V. Rajaraman is a Honorary Professor at the Supercomputer Education & Research Centre, IISc.
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