India plans spending more on education using technology

India plans to spend 9 billion Indian rupees (US$189 million) on education programs using information and communications technology in the fiscal year to March 31, 2010, the country's finance minister said on Monday.

India needs to convert the demographic advantage that its relatively young population gives it into an economic advantage by providing them the right education and skills, the country's Minister of Finance, Pranab Mukherjee said while presenting the country's annual budget to Parliament.

The minister also announced a 20 billion rupee hike in spending on higher education, including on setting up new Indian Institutes of Technology (IITs). The IITs have over the years provided key engineering staff for Indian and multinational technology companies.

India's outsourcing industry benefits from the country's large number of low-cost and highly trained staff.

The immediate benefit from the budget for India's outsourcing industry is, however, likely to come from the extension of tax holidays for exporters up to the fiscal year ending March 31, 2011. The minister said he was extending these benefits to help tide exporters over an economic slowdown.

Mukherjee also announced that the first set of unique identity numbers for Indian citizens will be rolled out in 12 to 18 months. The government has set up for this purpose a Unique Identification Authority of India (UIDAI), and appointed as its head Nandan Nilekani, former co-chairman of outsourcer Infosys Technologies.

The UIDAI will set up an online data base with identity and biometric details of Indian residents and provide enrolment and verification services across the country, Mukherjee said.

The project could provide large opportunities to IT services companies, according to analysts.

The budget has been criticized by industry because of its large deficit of 6.8 percent of gross domestic product in the current fiscal year, and its focus on large development and rural spending. Share prices on Indian stock exchanges fell as the budget was being announced by the finance minister.