Regulating The Digital Economy – Need For A Light Touch Approach

In the last two decades, the Indian IT industry had made huge strides to become one of the largest in the world, particularly with regard to the development of software. Most of the leading multinationals of the world have large facilities in India that engage in software development, R&D, maintenance services, business process outsourcing, call centre/voice support, etc. The industry is a major source of foreign exchange earnings for India. A significant part of this industry is focused on the US market – servicing US customers.

What does the government need to do next to promote this industry further? The industry largely grew without government support, except for the tax holidays that the government allowed for the sector, that made it more competitive in terms of pricing internationally. Today, the ideal approach of the government must be a light touch one, regulating where absolutely required but by and large adopting hands off approach.