The Role of State Government in Developing India's Internet


Larry Press, Grey Burkhart, Sy Goodman, Arun Mehta, and Arun Mittal, OnTheInternet, pp 35-37, November/December, 1998


One hears speculation that globalization and the Internet may portend the end of national sovereignty and government power, but national governments play a central role in Internet diffusion today. The government plays different roles in each nation, and that role may vary over time. For example, in Communist nations like Cuba or China, the government is the Internet operator and regulator. In the U. S., the government played a significant role in establishing the Internet and earlier networks with purchases, research support, and direct operation [2], but drew back as industry stepped in.


The Indian Federal government has impeded the Internet with a combination of neglect and government monopoly;[1] however, the state governments have been more positive. During a recent visit to India, we saw several promising examples of joint ventures between State governments and private industry. These projects represent a middle ground between government control and laissez faire -- a pro-active government provides leadership and incentives to involve a private firm, and both end up with equity.


One example is in the northeast of India in the state of West Bengal. Millenium Systems, a software startup with expertise in enterprise resource planning, data warehousing, and PeopleSoft and Oracle development was partially funded by the State. Millenium is aptly named because entering their offices from the crowded, impoverished streets of Calcutta is like a 1000-year time warp. They have 3 Sun and 3 Intel servers on a switched-Ethernet LAN with 40 Pentium II-based developer workstations, a 16-PC training room, and 19 administrative machines arranged in newly outfitted offices and cubicles. Their financing combines private venture capital, founder's capital, and loans and credit lines from government financial institutions. Seed capital for this venture was from the West Bengal Electronics Limited, a state agency which encourages IT ventures with leadership, equity investments and infrastructure.


Moving south, we visited the state of Andhra Pradesh where Chief Minister[2] N. Chandrababu Naidu has great confidence in IT as a means of improved government and regional development. Soon after his election in 1995, Mr. Naidu installed an Executive Information System (EIS) allowing him to monitor governmental programs.[3] His system is similar to an industrial EIS, where an executive can see high level summaries, and "drill down" to view underlying detail. It now covers 44 areas including law and order, family welfare, hospitals, education, electrical power (see Figure 1), and he said he uses it for an hour each morning. Naidu also has a geographical information system for roads, irrigation and drainage and forestry and wasteland development.


He plans to network the entire state, and envisions improved government efficiency via an intranet and bringing government service to the people electronically, as in Singapore. He also sees IT as a path to development and investment. In March, 1998, he met with Bill Gates, and Microsoft subsequently decided to locate a Windows NT development team in the HITEC City complex in Andhra Pradesh and to establish a training facility at the new Indian Institute for Information Technology (IIIT) there.


HITEC City is a 175-acre joint venture between the government and Larsen & Toubro (L&T), India's largest construction company. The government contributed the land, widened access roads, and so forth, and L&T is responsible for design, finance, construction and marketing. L&T owns 89% and the government 11%. The development will have Internet connectivity, 3,000 telephone and ISDN lines, a dedicated power plant, and generators for fall back.


The centerpiece of HITEC City is a 500,000 square-foot, ten-story building on which exterior construction is already complete (Figure 2). The building is 60% committed to companies including Oracle and Motorola. The spaces are sold to the tenants, with L&T staying on to maintain and operate the building. L&T has been involved in similar projects in other states, and is efficient in construction of hi-tech buildings. They have a modular design with an atrium and services in the center of the building and a fiber backbone and wiring closets on each floor. They utilize both modern high-rise construction equipment like cranes and large numbers of women carrying constructions material on their heads, as is appropriate in a nation with India's demographics.


The IIIT is a new university which will open in Fall, 1998 with 50 students, and will grow to 600 undergraduate and 650 graduate students by 2004. The government was able to contribute 62 acres of land and the initial buildings, but finding and affording qualified faculty and equipment was a problem.


Industrial companies were invited to locate their data centers and training facilities on the IIIT campus. IBM, Oracle, Microsoft, Metamor, and Satyam Computers have accepted, and, at the time of our visit, IBM had already occupied a floor of a finished building, installed a mainframe computer, and established a school. The university will have a core faculty, but will rely upon the industrial training staff as adjunct professors, and the industrial partners will install modern equipment, which will be shared with the university. Some may worry that the "university" will become a "trade school," training people on the hardware and software of the industrial participants; however, the undergraduate curriculum (Table 1) suggests a reasonable balance between theory and practical application.


This sort of partnership is not without precedent. For example, in the late 1950s and 1960s IBM commonly cooperated with universities by building computer centers and offering deep discounts. Today it is common for technical courses in U. S. universities to be taught by part-time faculty who work in industry. IIIT goes a step further. It is not a conventional university with an auxiliary center or adjunct faculty; it was planned as a cooperative venture from the start.


It is noteworthy that these initiatives took hold at the state level, where the Indian Department of Telecommunication and other agencies have less power than at the Federal level. In fact, projects like these have inspired much of the work of the newly formed Federal Task Force which is charged with making India an IT superpower by building infrastructure, increasing software and IT services export, and bringing IT to all of India within ten years. Chief Minister Naidu co-chairs the Task Force and their 108-point Action Plan[4] explicitly recommends the replication of developments like HITECH City and the IIIT throughout India and financial assistance like Webel provides to West Bengal software startups. Partnerships between state and local governments and private enterprise have preceded and influenced Federal planning and Internet development in India, and may do so in other emerging nations.



1.    Burkhart, Grey, Press, Laurence, Mehta, Arun, and Goodman, Seymour, The Internet in India Better Times Ahead?, Communications of the ACM, in press.

2.    Press, Larry, Seeding Networks: the Federal Role, Communications of the ACM, p.p. 11-18, Vol. 39., No. 10, October, 1996, reprinted in OnTheInternet, Vol. 3, No. 1, January/February, 1997, p.p. 13-22.



Foundation Courses

Core Courses


Management Applications







Mathematics: Linear Algebra, Differential Equations, Numerical Maths, Discrete Structures, Probability, Stochastic Models




Electronic Materials


Humanities, Science Technology and Society


Computer Programming


Generic Skills


Computer Sciences: Data Structures and Algorithms, Architecture, AI


Software: Programming Languages, Operating Systems, Compilers, DBMS, Graphics, Virtual Reality


Communication Systems: Digital Communication, Communication Networks, Internet and Web Applications in Business

Operations Management


Quality and Reliability




IT Applications in Business Process Management

Mid-term Mini Project


Final Year Project


Table h1: IIIT Undergraduate curriculum.







Figure 1: The Executive Information System of the Chief Minister of Andhra Pradesh.





Figure 2: The Central Building at HITEC City in Andhra Pradesh.


[1] The current government has moved boldly to reverse this policy, and has empowered a Task Force to plan and implement the transformation of India into a global IT and networking superpower in ten years, see [1] and

[2] A Chief Minister is the chief executive of the State, similar to a Governor in the U. S.


[3] See for more information on the projects described here.



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