Encouraged by pro-active government policies, quality manpower and a competitive private sector, India's software exports grew by a phenomenal 50 per cent over the last five years to touch Rs 36,500 crore (Rs 365 billion) in 2001-02.

Software exports have become an important part of India's exports and the country's international image, and a unique feature of this industry is the export orientation, the pre-Budget Economic Survey 2002-03 tabled in Parliament on Thursday said.

During the same period, the country's hardware exports touched Rs 5871 crore (Rs 58.71 billion), the Survey said. However, hardware exports have lagged, whereas software exports at the present level of over $1 billion a year should not be overlooked, it said.

While software export is a well-known success story, India is now an important venue for many tasks in services such as financial accounting, call centres, processing insurance claims and medical transcriptions, it said.

Taking the software prowess of the country to new highs, it said many top IT firms from across the world have started utilising India in their global production chains, and in high-end research and development.

Among the other major developments in the sector, it said issuance of digital licences by the Controller of Certifying Authorities to firms setting up key internet security infrastructure for online business transactions, setting up of Centre for Information and Network Security in Pune Univeristy and Computer Emergency Response Team for protecting India's strategic commercial and financial information assets would go a long way in putting the country on the global infotech map.

Appreciating states for taking e-governance drives in full force, the Survey said the use of free software in recent years has fostered development of Indian skills in building new technology.

Many state governments and government agencies are exploiting free software in the areas of national security, R&D, internet related applications, utilisation of low cost computing in schools and colleges, it said hailing the role of Simputer in this regard.

The government's Media Lab Asia initiative in collaboration with MIT, US, would facilitate applications of innovations in IT to the grassroot level, the survey said.

Also, some of the policy initiatives taken on the customs duties with regard to the IT sector have brought desirable results.

In the Budget 2002-03, the peak customs duty was reduced from 35 per cent to 30 per cent and the duty on 56 items of capital goods for manufacture of semi conductors was reduced to zero per cent, on 24 items of capital goods for manufacture of electronics components from 25-35 per cent to 15 per cent, it said.

PTI