Most of us believe Indian IT industry developed mainly because of absence of government intervention in its initial years. Infact some say government officials were clueless about this industry and as a result there were no policies to ruin the sector.
There is some nice debate on the point between WB econs. Kalpana Kochhar points how Indian IT industry grew in absence of government intervention. Justin Lin disagrees. He points to a number of ways in which govt. policies have led to promotion of the software industry.
What do others think on this super topic?
Well, if you look at it there are some similarities with the US story. Most believe US software industry or Silicon valley is because of power of markets. However, later econs like Rodrik pointed the industry would not have existed without government investment in DARPA etc. So, the debate remains active and acrimonious in US as well..
