IMPACT OF IT COMPANIES ON INDIAN ECONOMY

CHAPTER-1

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 IMPACT OF IT COMPANIES ON INDIAN ECONOMY

INTRODUCTION:
India being a highly connected and digital ready economy remains a high potential market
worldwide offering multiple opportunities. India presents a large and burgeoning end user
market being world’s second largest population in world. India is all set to leapfrog into the
digital world with 937 million mobile subscribers, 278 million internet users, and an USD 14
billion e-Commerce market. Indian IT industry has grown many manifold since 1980s. The
industry has contributed considerably to the economy in terms of GDP, employments and foreign
exchange earnings. IT industry is also responsible for increasing the competence and
productivity of almost all sectors of the economy like TCS, WIPRO, Infosys, HCL technologies
And Redington India. e-governance has increased the efficiency of government offices. In this
paper we have analyzed different ways in which IT industry has contributed to India’s growth
and last 5 years ,how the growth happen for IT industry in 2 years before covid19 and after 3
years during covid19 major discuss this papers.

Information Technology (IT) is a knowledge based industry. It can be defined as the utilization
of hardware, services and infrastructure to create, store, exchange and leverage information in its
various forms to accomplish any number of business objective. IT industry embraces production,
manipulation, storage and dissemination of information. IT sector has a remarkable potential for
accelerating economic growth of the nation. It has the potential to improve the productivity of
almost all sectors of economic development. Information technology has made our governance
efficient. It enhances access to information, provides access to government services, protects
consumers, makes skill development and training more effective, progresses delivery health
services, and promotes transparency. The role of IT industry in enhancing the economic
development of the country has been acknowledged by the government of India.

There are five principal components of IT industry - (i) Online business (ecommerce) (ii) IT
services, (iii) ITES (IT Enabled Services) e.g. BPO (iv)Software Products (v) Hardware. All
these components are progressing well and are responsible for ongoing growth curve of India’s
economy with a steady rise in revenues as witnessed in the past few years.

INDUSTRY PROFILE:

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 IMPACT OF IT COMPANIES ON INDIAN ECONOMY

A multinational corporation (MNC) is a company that operates in its home country, as well as in
other countries around the world. It maintains a central office located in one country, which
coordinates the management of all its other offices, such as administrative branches or factories.

Characteristics of a Multinational Corporation

The following are the common characteristics of multinational corporations:

1. Very high assets and turnover

To become a multinational corporation, the business must be large and must own a huge amount of assets,
both physical and financial. The company’s targets are high, and they are able to generate substantial
profits.

2. Network of branches

Multinational companies maintain production and marketing operations in different countries. In each
country, the business may oversee multiple offices that function through several branches and
subsidiaries.

3. Control

In relation to the previous point, the management of offices in other countries is controlled by one head
office located in the home country. Therefore, the source of command is found in the home country.

4. Continued growth

Multinational corporations keep growing. Even as they operate in other countries, they strive to grow
their economic size by constantly upgrading and by conducting mergers and acquisitions.

5. Sophisticated technology

When a company goes global, they need to make sure that their investment will grow substantially. In
order to achieve substantial growth, they need to make use of capital-intensive technology, especially in
their production and marketing activities.

6. Right skills

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 IMPACT OF IT COMPANIES ON INDIAN ECONOMY

Multinational companies aim to employ only the best managers, those who are capable of handling large
amounts of funds, using advanced technology, managing workers, and running a huge business entity.

7. Forceful marketing and advertising

One of the most effective survival strategies of multinational corporations is spending a great deal of
money on marketing and advertising. This is how they are able to sell every product or brand they make.

8. Good quality products

Because they use capital-intensive technology, they are able to produce top-of-the-line products.

Reasons for Being a Multinational Corporation

There are various reasons why companies want to become multinational corporations. Here are some of
the most common motivations:

1. Access to lower production costs

Setting up production in other countries, especially in developing economies, usually translates to

spending significantly less on production costs. Though outsourcing is a way of achieving the objective,
setting up manufacturing plants in other countries may be even more cost-efficient.

Due to their large size, MNCs can take advantage of economies of scale and grow their global brand. The
growth is done through strategic manufacturing/service placement, which allows the corporation to take
advantage of undervalued services across the globe, more efficient and inexpensive supply chains, and
advanced technological/R&D capacity.

2. Proximity to target international markets

It is beneficial to set up business in countries where the target consumer market of a company is located.
Doing so helps reduce transport costs and gives multinational corporations easier access to consumer
feedback and information, as well as to consumer intelligence.

International brand recognition makes the transition from different countries and their respective markets
easier and decreases per capita marketing costs as the same brand vision can be applied worldwide.

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 IMPACT OF IT COMPANIES ON INDIAN ECONOMY

3. Access to a larger talent pool

Multinational corporations are also known to hire only the best talent from around the world, which
allows management to provide the best technical knowledge and innovative thinking to their product or
service.

4. Avoidance of tariffs

When a company produces or manufactures its products in another country where they also sell their
products, they are exempt from import quotas and tariffs.

Models of MNCs

The following are the different models of multinational corporations:

1. Centralized

In the centralized model, companies put up an executive headquarters in their home country and then
build various manufacturing plants and production facilities in other countries. Its most important
advantage is being able to avoid tariffs and import quotas and take advantage of lower production costs.

2. Regional

The regionalized model states that a company keeps its headquarters in one country that supervises a
collection of offices that are located in other countries. Unlike the centralized model, the regionalized
model includes subsidiaries and affiliates that all report to the headquarters.

3. Multinational

In the multinational model, a parent company operates in the home country and puts up subsidiaries in
different countries. The difference is that the subsidiaries and affiliates are more independent in their
operations.

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 IMPACT OF IT COMPANIES ON INDIAN ECONOMY

Advantages of Being a Multinational Corporation

There are many benefits of being a multinational corporation including:

1. Efficiency

In terms of efficiency, multinational companies are able to reach their target markets more easily because
they manufacture in the countries where the target markets are. Also, they can easily access raw materials
and cheaper labor costs.

2. Development

In terms of development, multinational corporations pay better than domestic companies, making them
more attractive to the local labor force. They are usually favored by the local government because of the
substantial amount of local taxes they pay, which helps boost the country’s economy.

3. Employment

In terms of employment, multinational corporations hire local workers who know the culture of their
place and are thus able to give helpful insider feedback on what the locals want.

4. Innovation

As multinational corporations employ both locals and foreign workers, they are able to come up with
products that are more creative and innovative.

Foreign Direct Investment

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 IMPACT OF IT COMPANIES ON INDIAN ECONOMY

Foreign direct investments are prevalent within multinational corporations. The investments occur when
an investor or company from one country makes an investment outside the country of operation.

Foreign investments most often occur when a foreign business is established or bought outright. It can be
distinguished from the purchase of an international portfolio that only contains equities of the company,
rather than purchasing more direct control.

Additional Resources

Thank you for reading CFI’s guide on Multinational Corporation (MNC). To keep learning and advancing
your career, the additional CFI resources below will be useful:

Articles of Incorporation

Board of Directors

Economies of Scale

Spin-off

COMPANY PROFILE:

A multi-national corporation /company is an organisation doing business in more than one

country, they are considered as huge industrial organizations which extend their industrial and
marketing operations through a network of their branches. A multinational corporation is “an
enterprise that engages in foreign direct investment (FDI) and owns or controls value adding
activities in more than one country” (Dunning 1993, 3). Most of the MNC’s have stared their
operations in developing countries by 1990, which leads to significant growth in investment and
gross domestic Product in recent times. Mnc’s are also known as transnational companies, which
are engaged in various activities like exporting, importing, manufacturing in different countries.
They have worldwide involvement and global perspective in in its management and decision
making. The first Multinational Corporation was established in 1920’s. Due to expansion of US
business worldwide many mnc’s come up in 1950-1960 which also had become the notable
feature of that time. Before 1991, India was a closed economy and faces many crisis. To the lift

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the country out of crisis government of India implement new economic policy in 1991 that
invites the foreign investments in Indian markets with the concept of LPG (liberalization,
privatization and globalization). Liberalization in Indian market make India home to number of
multinational corporations. India houses majority of multinational companies hailing from the
United States, which account 37% of turnover of first 20 firms that operate in India and rest
comes from European Union and their Asia counterparts. Mnc’s also: • Consider opportunities
throughout the globe though they do business in few countries. • Engage in international
activities and operate plants in many countries. • Invest considerable portion of their assets
internationally. • Take managerial decision based on global perspective.i focused
TCS,WIPRO,INFOSYS ects company.

. FACTORS CONTRIBUTED FOR GROWTH OF MNC

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 IMPACT OF IT COMPANIES ON INDIAN ECONOMY

PROMOTORS:
 Occasional promoters. These promoters take interest in floating some companies.
 Entrepreneur promoters.
 Financial promoters.
 Discovery of a business idea.
 Detailed investigation.
 Assembling the factors of production.
 Entering into preliminary contracts.
 Naming a company.

VISION:
Financial Institution Saving Low Income Individuals and Borrowers below IT Sector

MISSION
To generate a better a better world that would be safer, more peaceful and more creative than the
world we know today.
QUALITY POLICES

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 IMPACT OF IT COMPANIES ON INDIAN ECONOMY

All IMPACT OF IT tool very sold and ensure very decent investment and quality for all products
based on interest and popularities. In this IMPACT OF IT products awareness for following
fields to get more information regarding IMPACT OF IT products. Main activity followed every
day to check our competitors update and their information and checking customer blogs and
reviews. If we do this definitely to
Improve IMPACT OF IT products quality products.

PRODUCT/SERVICES:
In IMPACT OF IT store so many products is available for all type of customers and every
IMPACT OF IT store they Have good service and helping to all customers to choice suitable
products and service will doing in all industry like, banking n finance, oil n gas, retailing,
insurance, telecom, metals and mining, cement, power, logistics, healthcare for last 5 years.

AREA OF OPERATION:

Global IMPACT OF IT financial sector is looking to open 35 new company in the coming one
year to increase its IMPACT OF IT in the country. the brand that currently has 355 stores across
120 cities .Banking lifestyle brand IMPACT OF IT schemes will count India among its top five
markets with three years even as some international peers struggle with their domestic operations
here.in 2022, India was the eighth largest market for IMPACT OF IT and the expects India to be
the top five by 2018-2022
The major operating cities of IMPACT OF IT banking are:
 Bangalore
 Delhi
 Pune
 Kolkata
 Mumbai
 Chennai
 Hyderabad
 Mangalore
 Agra

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 IMPACT OF IT COMPANIES ON INDIAN ECONOMY

 Allahabad
 Indore
 Punjab
 Surat
 Luck now.

COMPETITORS INFORMATION:

 EMC2
 CAP
 HP
 PRIVATE PERSONAL BANK
 INFINITE

INFRASTRUCTURES FACILITIES:
IMPACT OF IT All bank store for the most part comprises of 1floor. The Back office is arranged

at the ground floor. On the off chance that clients visits stores they can have all offices of

stopping, lift offices and clients effortlessly discover items in the stores.

• Two wheeler s and four wheeler s offices at underground floor.

• Two trial spaces for clients.

• Lift offices.

• Fire leave offices in each floor.

• Scanner in the passage and exit of the store.

• Drinking water.

• Lunch space for staff.

• Air Conditioner.

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 IMPACT OF IT COMPANIES ON INDIAN ECONOMY

• Music.

SWOT ANALYSIS:

STRENGTH

It has gone into organization with acclaimed organizations like Banking Telecom.

It has a good IMPACT OF IT name throughout worldwide.

IMPACT OF IT brand is extremely creative and has an exceptionally rich R&D group.

IMPACT OF IT is built up more than 90 nations and utilizes around 11787 representatives will

over the world.

WEAKNESS

IMPACT OF IT has intense rivalry and constrained piece of the pie contrasted with profit and

loss

High brand changing means hard to have steadfast client base.

Missing insurance segmentation.

OPPORTINITUES

More promoting and marking to tap more up to date clients

Technology up gradation for new products.

Acquisition and sponsorships.

THREATS

Economic situation.

Governmental approaches and control can influence business task.

FUTURE GROWTH AND PROSPECTS

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 IMPACT OF IT COMPANIES ON INDIAN ECONOMY

As markets globally continued to navigate currents surrounding inflation, monetary policies and
Omicron, the beacon of pessimism was passed on to the domestic bourses as well. IMPACT OF
ITs have been withdrawing funds every single day this month. Except for September’21,
IMPACT OF ITs have been net sellers since April’21. A major casualty of this selling spree has
been Bank Nifty with majority of the top 10 constituents of the index experiencing a sequential
drop in IMPACT OF IT holdings for the September quarter. In fact, Bank Nifty has been a
relative underperformer not only since the pandemic’s onset but even on YTD and 6 month
period basis. History provides evidence that there is correlation between the sell-off by IMPACT
OF ITs and Bank Nifty’s underperformance. Since 2017, if we look at those twelve months
where IMPACT OF IT outflows have been the highest, Bank Nifty has underperformed the
benchmark index two-thirds of the time.

Foreign Portfolio Investors/Foreign Institutional Investors (FPIs/IMPACT OF ITs) have been a

major driver of India's financial markets, investing Rs. 50,089 crore (US$ 7.06 billion) in the
calendar year 2021. The country has attracted IMPACT OF ITs/FPIs due to its well-developed
primary and secondary markets. The Securities and Exchange Board of India (SEBI) regulates
foreign institutional investors' (IMPACT OF ITs/FPIs) investments in India, while the Reserve
Bank of India sets a limit on such investments (RBI).

Type of Impact Of IT investing in India are as below:

 Hedge Funds

 Foreign Mutual Funds

 Sovereign Wealth Funds

 Pension Funds

 Trusts

 Asset Management Companies

 Endowments, University Funds, etc.

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 IMPACT OF IT COMPANIES ON INDIAN ECONOMY

The total market capitalization (M-cap) of all companies listed on the Bombay Stock Exchange
(BSE) rose to a record level of Rs. 264.41 trillion (US$ 3.53 trillion) in 2021-22 (till February
1st), from Rs. 204.31 trillion (US$ 2.76 trillion) in 2020-21.

FINANACIAL STATEMENTS:

As at 31st As at 31st
Balance Sheet of MNC March, 2018-2019 March, 2020-2021
(in crores) (in crores)

EQUITIES AND LIABILITIES

SHAREHOLDER'S FUNDS
Equity Share Capital 17.04 17.04
Total Share Capital 17.04 17.04
Reserves and Surplus 144.66 138.12
Total Reserves and Surplus 144.66 138.12
Total Shareholders Funds 161.7 155.16
NON-CURRENT LIABILITIES
Long Term Borrowings 8.83 7.76
Deferred Tax Liabilities [Net] 0.67 1.46
Other Long Term Liabilities 6.09 5.98
Long Term Provisions 0.46 0.24
Total Non-Current Liabilities 16.05 15.44
CURRENT LIABILITIES
Short Term Borrowings 127.32 121.67
Trade Payables 93.73 73.79
Other Current Liabilities 22.39 19.35
Short Term Provisions 3.74 3.86
Total Current Liabilities 247.18 218.67
Total Capital And Liabilities 424.92 389.27
ASSE1TS
NON-CURRENT ASSETS
Tangible Assets 91.08 97.34
Intangible Assets 1.53 0.75
Capital Work-In-Progress 1.42 1.28
Fixed Assets 94.02 99.37
Non-Current Investments 1.22 1.22

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 IMPACT OF IT COMPANIES ON INDIAN ECONOMY

Long Term Loans And Advances 18.26 18.93

Other Non-Current Assets 0 0
Total Non-Current Assets 113.5 119.53
CURRENT ASSETS

Inventories 164.15 141.08

Trade Receivables 120.17 95.48

Cash And Cash Equivalents 7.85 7.53

Short Term Loans And Advances 19.25 25.65

Total Current Assets 311.42 269.75

Total Assets 424.92 389.27

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IMPACT OF IT COMPANIES ON INDIAN ECONOMY

CHAPTER-2

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CONCEPTUAL BACK GROUND AND LITERATURE REVIEW

TOP MNC’S OPERATING IN INDIA:

At present there are many company operating in India, some of the top mnc’s are given below.
Proctor and Gamble {P&G}: It is an American multinational company headquartered in
downtown CINCINNATI, OHIO, founded in 1837 by British American William Proctor and
Irish American James Gamble. It specializes in a wide range of personal health/ consumer health
and hygiene products these products are organized into several segments including beauty,
healthcare, fabric, homecare & baby, Famine and family care. Before the sale to the Kellogg
company, it product portfolio also included foods, snacks and beverages. Nestle: Nestle is a
Swiss transnational food and drink company headquartered in vevy vaud Switzerland. It is the
largest food company in the world .It is ranked no. 64 in future fortune global 500 in 2007 and
no.33 on the 26th edition of Forbes global in 2000, list of largest companies. ITC: An Indian
multinational company headquartered in Kolkata, west Bengal. Established in 1910 as the
'Imperial Tobacco Company of India Limited', the company was renamed as the 'India Tobacco
Company Limited' in 1970 and later to 'I.T.C. Limited' in 1974. Study conducted by economic
time’s shows that ITC ranks in 10 most valuables brands in India. ITC has diversified itself in
FMCG, hotels, paperboards and specialty papers, packaging, agri-business and information
technology.

TATA Motors: Formerly name as Tata Engineering and Locomotive Company (TELCO) part of
Tata group, is an Indian multinational automotive company headquartered in Mumbai,
Maharashtra, India. Its products include passenger cars, trucks, vans, coaches, buses, sports cars,
construction equipment and military vehicles. In 1998, Tata launched the first fully indigenous
Indian passenger car, the Indica, and in 2008 launched the Tata Nano the world's cheapest car.
Infosys Ltd.: An Indian multinational corporation that provides business consulting, information
technology and outsourcing services. Headquartered in Bangalore, Karnataka, India. It is
considered to be the second largest Indian IT company after Tata consultancy service by 2017
revenue. Company is also engaged in the business of financial services, Energy and utilities, life
sciences and health care, consumer packaged food. Mahindra and Mahindra ltd.: Established in

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1945, An Indian multinational car Manufacturing Corporation was firstly named as Muhammad
& Mahindra and later it was renamed as Mahindra and Mahindra. It becomes largest
manufacturing vehicle industry in India and largest tractor manufacturer in world. Company was
headquartered in Mumbai, Maharashtra, India. The automotive company includes the sales of
automobiles, spare parts, services rendered for IT and telecom.

1. Multinational Corporations

Multinational corporations or MNCs are known by different names – transnational companies,

multinational enterprises, global corporations or international corporations. The origin of MNCs
could be traced back to the 1860s, but it was only after the Second World War that the world has
seen such a rapid growth in their numbers (Cherunilam, 2006). The British East India Company
and Royal Africa Company are examples of some earlier MNCs. The ILO defines MNC as a
company having head quarters in the home country and operations in several other countries.
These companies think globally but act locally. The main reason why firms chose to go global
could be attributed to the uneven distribution of factor endowments and failures in the market.
MNCs generate almost 50% of the globe’s industrial output and about 67% of the world trade
(Gooderham & Nordhaug, 2003). Now a day’s MNCs are present in all parts of the world but the
bulk of them belong to the “triad nations” of USA, European Union and Japan. Some of the
points to consider for a company to be called an MNC are as given below (Saleem, 2006).

Operates in many countries. The level of economic progress in these countries may differ.

Around 50% of its net profits come from the operations in foreign countries.

Usually has a central management with local subsidies being managed by locals.

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 IMPACT OF IT COMPANIES ON INDIAN ECONOMY

Encourages collective transfer of resources and knowledge across continents.

Has a huge resource base and ability to expand.

a) Types of MNCs

Caves, in his book Multinational Enterprise and Economic Analysis, divides MNCs broadly into
three groups (Caves, 1996). Horizontally integrated companies are those which sell the same
kind of goods across nations, for example, soft drink companies, confectioneries etc. In the case
of vertically integrated enterprises, the output in some of their plants in one country serves as
input in some of their plants in other countries. The reason for the dispersal of the units could be
attributed to the geographical reasons. An industry known for its vertical integration is the oil
industry where the crude oil is dug in one location and its processing done in another location.
The third and last group described are MNCs that show no evidence of either vertical or
horizontal integration (Caves, 1996). The companies belonging to the third group concentrate on
spreading business risk, especially systemic risks. Systemic risk refers to the risk of collapse of
an entire market or industry.

MNCs can be further classified as financial controllers and integrated international companies
(Tempel, 2001). Financial controllers are companies where there is very strong control of the
subsidiaries by the head quarters and there is also a great degree of dependence on the parent
country by the subsidiaries for resources. The integrated international company also has a high
degree of authority over its subsidiaries and also there is a high degree of resource dependence.
The factor that distinguishes the financial controllers from the integrated companies is that there
is a certain degree of independence when it comes to resource.

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 IMPACT OF IT COMPANIES ON INDIAN ECONOMY

b) Foreign Direct Investment

It is seen that the more the foreign direct investment (FDI), the bigger the population of MNC
subsidiaries in that country. FDI refers to the long term investment of one country in another.
FDI inflows in to the developing countries have been on the rise since the 1990s (Patterson et al,
2004). Due to this the number of MNCs cropping up in the developing countries is also on the
increase.

c) Knowledge Transfer

One major feature of MNCs is the transfer of knowledge and practices across the world from the
parent country to the host countries and vice versa. The transfer of knowledge comprise of
technology transfer, transfer of managerial and technical knowhow and various skills. This
knowledge being transferred could be implicit or explicit knowledge. Implicit or tacit knowledge
consist of mainly personal experiences, attitudes and skills that are specific to a person and hence
difficult to formulize; explicit knowledge on the other hand can be easily quantified into
scientific data, formulas, procedures and is not people specific (Tayeb, 2005). Explicit
knowledge can be easily transferred while tacit knowledge is more difficult. Transfer of explicit
knowledge takes place by the transfer of machinery and equipment, installation of software,
licensing and so on. HRM goes a long way in helping the transfer of knowledge across nations,
especially implicit knowledge. HRM practices like training, motivation, vision sharing and inter-
unit transfer of employees, all help in the creation, maintenance and transfer of implicit
knowledge with in the different units of the MNC (Tayeb, 2005). MNCs need both tacit and
explicit knowledge for gaining competitive advantage. In fact knowledge transfer between the
head quarters and subs form the basis for relationship building for the MNC (Koohang, Harman
and Britz, 2008).

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2. 50 Global MNCs

The Fortune magazine comes out with a list called Fortune Global 500 companies where they
rate companies based on their on various revenues and profit. This list is considered to be “the
list” when it comes to the best and most powerful companies in the world and making the list is a
great honour. This year Wal Mart stands number 1 in the list. The list also consist of
classification of companies based on various factors like sales, revenues, fastest growth rate,
employment rate, and so on. Given below is the list of the top 50 companies from the list
(Fortune, 2010). The list consist of a mix of international and multinational companies belonging
to many industries ranging from retailers, finance, oil, automobile and IT to mention a few. They
are also distributed in several countries.

1. LITERATURE SURVEY
Williams Palike (2019): In this first stage, Indian software industry was almost non-existent. IT
industry in India started with hardware products. This sector was protected by the Indian
Government through licensing and high tariff rates. When Indian Government realized the
potential of software sector to earn foreign exchange, it allowed import of hardware and export
of software through its new software export scheme formulated in 1972. TCS was the first
beneficiary of this scheme in 2020.

Mcmankys Megan 2020: Though the software exports were started by some high profile
companies like TCS, WIPRO, Infosys etc., the results were not very encouraging. There were
some problems with government policies like the export of software was dependent on the
imports of hardware. Moreover there were no appropriate infrastructural facilities for software
development. IT industry was under a lot of pressure. It was only in 2021 that the Indian
Government took decision to liberalize the IT sector and de-licensed the imports of hardware and
for exporters, it was duty free.

John Kalian Paul1(2022): This period has observed intensified competition in the IT sector.
During this stage, there were some substantial changes in Indian economy, including relaxation
in the entry barriers, trade liberalization, opening up of Indian economy for foreign investments.

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 IMPACT OF IT COMPANIES ON INDIAN ECONOMY

Software front was moving more towards standardization and productivity improvement. Due to
the liberalization, a flow of foreign investments came in India and MNCs in India were
introduced. “Offshore Model”, “Onsite Model” and “Global Delivery Model (GDM) were
introduced as part of the services.

 Taylor Mujan (2022): 2000-2010 has been a period of rapid growth of the IT industry.
Software service companies were earning good amount of foreign exchange as a result of cheap
hardware, faster communication, and setting up of Software Technology Parks. In 2019 Special
Economic Zone (SEZ) Act was passed. It helped in importing duty free hardware, and income
tax exemption on exports for 5 years. The result was an increase in the number of software
companies. Information Technology Act passed in 2000 gave a boost to e-commerce. National
broadband policy announced in 2004 made broadband available to 20 million Indians by 2019.

Berkovitch and Narayanan (1993) Through empirical research to investigate the correlation
between the total income of the merged enterprise and the M & A,that Synergy 、agency costs
andmixed overconfidence hypothesis can explain the acquisitions in a certain extent.

Gugler (2003) analysis of the last 15 years through mergersand acquisitions to distinguish the
increase in profit of mergers and acquisitions and reduce profits on mergers and acquisitions, and
increased sales for further distinction can be displayed about merger & acquisition. If the profit
and sales increased at the same time, then the merger motivation is to increase efficiency; if the
increase in profits and sales decline, then the merger is the motivation of market power; if the
decline in profits and sales at the same time, so the acquisition is not successful.

Hien et al. (2013) analyzed the sample of the United States of America, found that the merger
and acquisition of the market timing of the 73%, while the study shows that there are many
reasons for the merger of 80%, it is difficult to explain with a theory.

Ruan Fei (2011) that the motivation of China's Internet acquisitions are mainly the following
five points: user preference to pursuit of increasing returns to scale, the Matthew effect, promote
the network economy and traditional economy to promote integration, seize the Internet market
share. Liu Xin, Li Chenyun (2012) acquisition motivation based on the theory of the mobile
Internet industry merger and acquisition is a strategic layout, mergers and acquisitions can also
make the enterprise to find new growth opportunities and potential in the industrial chain,

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 IMPACT OF IT COMPANIES ON INDIAN ECONOMY

improve efficiency, it may just be because managers Yelang arrogance has led to a merger
occurs. The main idea of this paper comes from the theory of synergetic effect.
Zhao Jing (2014) Sina micro-blog Alibaba MampA motivation analysis of the event from the
perspective of transaction cost, the size of transaction costs compared to self social media
platform in cooperation with social media platforms and social media platform acquisition in
three ways, the minimum transaction cost in M & a social media platform in this way results.

Zolo cry (2019): In this first stage, Indian software industry was almost non-existent. IT industry
in India started with hardware products. This sector was protected by the Indian Government
through licensing and high tariff rates. When Indian Government realized the potential of
software sector to earn foreign exchange, it allowed import of hardware and export of software
through its new software export scheme formulated in 1972. TCS was the first beneficiary of this
scheme in 2020.

bakery’s Megan 2020: Though the software exports were started by some high profile
companies like TCS, WIPRO, Infosys etc., the results were not very encouraging. There were
some problems with government policies like the export of software was dependent on the
imports of hardware. Moreover there were no appropriate infrastructural facilities for software
development. IT industry was under a lot of pressure. It was only in 2021 that the Indian
Government took decision to liberalize the IT sector and de-licensed the imports of hardware and
for exporters, it was duty free.

John Kalian Paul1(2022): This period has observed intensified competition in the IT sector.
During this stage, there were some substantial changes in Indian economy, including relaxation
in the entry barriers, trade liberalization, opening up of Indian economy for foreign investments.
Software front was moving more towards standardization and productivity improvement for
Wipro and TCS. Due to the liberalization, a flow of foreign investments came in India and
MNCs in India were introduced. “Offshore Model”, “Onsite Model” and “Global Delivery
Model (GDM) were introduced as part of the services.

 Taylor Mujan (2022): 2000-2010 has been a period of rapid growth of the IT industry.
Software service companies were earning good amount of foreign exchange as a result of cheap

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hardware, faster communication, and setting up of Software Technology Parks. In 2019 Special
Economic Zone (SEZ) Act was passed. It helped in importing duty free hardware, and income
tax exemption on exports for 5 years(ITC,HCL). The result was an increase in the number of
software companies. Information Technology Act passed in 2000 gave a boost to e-commerce.
National broadband policy announced in 2004 made broadband available to 20 million Indians
by 2019.

Berkovitch and Narayanan (1993) Through empirical research to investigate the correlation
between the total income of the merged enterprise and the M & A,that Synergy 、agency costs
andmixed overconfidence hypothesis can explain the acquisitions in a certain extent(Read Only).

Gugler (2003) analysis of the last 15 years through mergersand acquisitions to distinguish the
increase in profit of mergers and acquisitions and reduce profits on mergers and acquisitions, and
increased sales for further distinction can be displayed about merger & TCS acquisition. If the
profit and sales increased at the same time, then the merger motivation is to increase efficiency;
if the increase in profits and sales decline, then the merger is the motivation of market power; if
the decline in profits and sales at the same time, so the acquisition is not successful.

Hien et al. (2013) analyzed the sample of the United States of America, found that the merger
and acquisition of the market timing of the ITC 73%, while the study shows that there are many
reasons for the merger of 80%, it is difficult to explain with a theory.

Ruan Fei (2011) that the motivation of China's Internet acquisitions are mainly the following
five points: user preference to pursuit of increasing returns to scale, the Matthew effect for HCL,
promote the network economy and traditional economy to promote integration, seize the Internet
market share.
Liu Xin, Li Chenyun (2012) acquisition motivation based on the theory of the mobile Internet
industry merger and acquisition is a strategic layout, mergers and acquisitions can also make the
enterprise to find new growth opportunities and potential in the industrial chain, improve
efficiency, it may just be because managers Yelang arrogance has led to a merger occurs. The
main idea of this paper comes from the theory of synergetic effect.
Zhao Jing (2014) Sina micro-blog Alibaba MampA motivation analysis of the event from the
perspective of transaction cost, the size of transaction costs compared to self social media

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platform in cooperation with social media platforms and social media platform acquisition in
three ways, the minimum transaction cost in M & a social media platform in this way results.

CHAPTER-3

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 IMPACT OF IT COMPANIES ON INDIAN ECONOMY

STATEMENT OF THE PROBLEM

MNCs often scale down their production facilities and close the operations in situation of
economic uncertainty. They practice hire and fire; hence, people employed in MNCs often lose
their jobs. Such uncertainty may lead to internal problems in the country. MNCs also affect the
national economy. Employment and growth at a local level contributes to overall economic
growth and increased tax revenues that aid government spending and development. Production
that is exported improves the balance of payments. MNCs Involvement often results in the lack
of development of local R & D transfer to host countries of technology they do not need, the use
of capital intensive technology that reduces jobs, and the increase in psychological dependence
on MNCs.

NEED FOR THE STUDY:

 Large amount of tax collections through MNC’s

 Increased revenue

 Economic health improved

 Employment increased

 Foreign relation increased

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2. OBJECTIVE OF THE PROJECT:

 To analysis about Impact of IT Firms.

 To analysis the IT industry economy for various Company’s likes (TCS, WIPRO,

Infosys, HCL technologies, Redington India).

 To analysis about before covid-19 and after covid-19 in IT Company impact economy.

 To analysis about IT Sector within Indian economy.

 To analysis about last 5 year Indian economy for IT Industry.

SCOPE OF THE STUDY:

 It increase host company export than import

 Integrating national economy

 Implementing new innovations

 Initiating a higher level of investment.

 Reducing the technological gap

 The natural resources are utilized in true sense.

 The foreign exchange gap is reduced

 Boosts up the basic economic structure.

RESEARCH METHODOLOGY
Sources of data

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 IMPACT OF IT COMPANIES ON INDIAN ECONOMY

1. Primary data

2. Secondary data

Secondary data:
The secondary data can be collected through
 The internet sources

 Annual report of the company

 Material provided by the company

 Fund houses

 Fact sheets, Brochures etc.

The secondary data is obtained from the various IT fund scheme and investor’s magazines and
websites. Monthly fact sheets of IT fund companies are important sources of secondary data; the
data obtained is analyzed using mathematical models
The secondary data obtained from various schemes such as
 Fact sheets of IT fund companies

 Business line

 Moneycontrol.com

 MNCS.com

 wipro.com ,tcs.com.itc.com

 Finance magazines

LIMITATIONS OF THE STUDY :

 This study is limited only for 6 weeks.

 The study is restricted only on 8 IT sectors only.

 The data collected on each fund is maximum for 5 years.

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 The study has been conducted and analyzed based on the available information, which is
governed by the time factor.

 The conclusion arrived on the subject is not exhaustive.

CHAPTER SCHEME:

CHAPTER CONTENTS
CHAPTER-1 Introduction, industry profile, organization
profile, promoters, vision, mission, quality
polices, service profile territory task,
framework offices, contenders
information,SWOT examination, future
development and prospects and money related
proclamation
CHAPTER-2 Conceptual background: Theoretical
background of the study and Literature
Survey
CHAPTER-3 Statement of the problem, need of the
study,objective,scope of the study, Research
methodology, Hypothesis and Chapter
Scheme
CHAPTER-4 Analysis and interpretation: Data collected
From the relevant source table and graphs.
CHAPTER-5 Finding, Suggestion/Recommendations and
Conclusion.
Bibliography and Annexure Figures,Graphs,Photograph etc.

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