What is interesting is that India’s software success has happened as an outcome of policies that were commonly viewed as defective. First, and foremost it was a consequence of India’s ‘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 Infosys’s 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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