What is interesting is that Indias software success has happened as an outcome of policies that were commonly viewed as defective. First, and foremost it was a consequence of Indias over-investment in higher education. .... Thirdly, it would be a denial of reality if we did not recognise that it was an act of closing the economy that spurred our domestic IT sector. In 1977 the Janata government asked IBM to leave India, since they refused to dilute their ownership of 100 per cent of the subsidiaries. And, as Infosyss CEO Narayana Murthy has recently written, this was in some sense a blessing in disguise, encouraging the production of smaller, state-of-the-art but cheaper minicomputers and microcomputers.11 But after that, the boost to this sector came, as Narayana Murthy acknowledges in the same paper, from the opening up of the economy in the 1990s.
http://www.epw.org.in/current/sa1.htm
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