The export-oriented IT sector has been hit by the global economic slowdown. Software has been affected more than hardware; that is because domestic revenue accounts for only 9 per cent of even Tata Consultancy Services' revenue, and TCS has far more domestic business than any of the others. Still, it may now be the turn of the domestic sector to give momentum to the IT companies. Domestic IT spend in the last few years has been driven by IT adoption by the corporate sector, which has gone in enthusiastically for productivity-enhancing packages like enterprise resource programmes (ERPs). The baton may now have to be picked up by governments at the Centre and in the states. If governments push e-governance solutions, not only will it generate revenues for the software firms, it will also generate multiplier benefits for the economy by improving the productivity of government departments virtually across the board. The need and scope for action along these lines has been outlined in the third Nasscom-McKinsey report (2005), which has noted that government spending on IT is only 0.13 per cent of GDP in India, compared to nearly double that (0.24 per cent) in China and nearly thrice as much (0.34 per cent) in the US. The report recommended that the government raise its IT budget by between $ 700 million and $1billion.
The rationale and need for improving and transforming e-governance have been clearly and systematically outlined by the Knowledge Commission, which has marked out the steps that have to be followed. To get the best 'bang for the buck', it has recommended that, while sharply raising the use of IT in government, an attempt must be made to redesign government procedures by keeping at the centre the need of the citizen for a hassle-free experience when interacting with government departments. Otherwise, the use of IT will only add another layer of expenditure without any commensurate gain.
This process can be time-consuming, so if the government is in a hurry and wants to make an impact, it can choose 10 to 20 areas which most affect people's daily lives. Among these can be the issue of birth and death certificates, proof of residence and issue of ration/ID cards. Again, to get things right from the beginning, it is necessary, recommends the commission, that common standards be adopted by the central ministries and state governments so that all sections, including panchayats, businesses, institutions and civil society organisations are able to join in. Otherwise there is a risk that systems, driven by vendors, will develop in silos and barely talk to one another. To build on what has been achieved, the commission says that the best practices already put in place by individual ministries should be nationally adopted. Among the goals worth striving for are a national broadband infrastructure, which is still available to very few internet subscribers in the country.