Institutional environment and the development of information and communication technology in India

This article examines the impact of institutional environment on the growth of the Indian information technology (IT) industry, The study reveals that before the first generation of reforms, that is, 1991, the government was pursuing a structuralist approach toward economic development. After libera lization in 1991, the government embarked on pro-active economic policies f or the diffusion and production of IT. Consequently, the IT industry experi enced an unprecedented growth rate in domestic as well as export markets. H owever, foreign direct investment (FDI) policies have not been successful i n attracting the desired level of foreign investment, which is very importa nt for a high-tech sector such as IT hardware manufacturing, The study sugg ests that immediate corrective measures need to be taken to augment the IT manufacturing industry, which can significantly contribute to national econ omic development and employment generation.