What are the main socio-economic implications arising out of the development of IT industries in major cities of India?

Sample Answer


Indian IT industry has grown rapidly with an exponential growth rate after the economic reform of 1991-92. It resulted in growth of IT hubs like Bangalore, Hyderabad, Gurgaon etc.


Socio-economic implications of Growth of IT industries in cities:

  • Suburbanisation: Growth of IT industries led to outgrowth of cities like Bangalore and Hyderabad
  • Migration: Economic opportunities created by these industries has spurred migration to these megacities from small towns. The Class I cities accounted for 70.2 % of the urban population in the 2011 census, while the remaining towns accounted for the rest.
  • Nuclear families: Increased urbanisation and migration as a result of growth of IT hubs led to dominance of nuclear families in cities and elderization of rural areas etc.
  • Cultural changes: Since these IT hubs attract talent from across the world, their growth resulted in cultural diversification of Indian cities as reflected in changing dietary choices, lifestyles etc. City cafes and pubs emerged as alternative cultural hubs.
  • Female labour participation: IT industry attracted more women employees compared to many other sectors in India. IT and ITES sector employs 34% women according to MeitY. This is higher than the 20.5% average level of female participation in the formal economy.
  • Gig economy emerged in Indian cities due to IT revolution but it resulted in informalisation of workforce.
  • Change in Land use patterns: Growth of IT agglomeration in the fringes of cities turned agricultural lands for non-agricultural purpose.
  • Regionally imbalanced growth: IT sector in India has leveraged urban agglomeration economies to become the islands of growth. According to CII, few cities contribute around 58% to the country’s GDP.


Given the growth potential of IT sector, it is necessary to initiate reforms in Urban planning capacity to accommodate the growth of the industry and it is sustainable to decentralise IT sector to Tier-II & III cities.

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