The development of an economy is a natural consequence of the shift of labor from agriculture to manufacturing, and subsequently from manufacturing to services. Note that the shift refers to the labor; agriculture has to go on still but with fewer people.
I have discussed a model called ADLI — agriculture demand led industrialization — in this weblog earlier. This is a sustainable model that is still relevant in India’s case. The model can be updated in the present context to “Rural Demand Led Computerization” RDLC, perhaps.
The RDLC could do for rural India what the institution of Land Grant Colleges and Universities, the Morrill Act of 1862, did for rural US. (Incidentally the act was signed by my favorite American president — Lincoln.) The act donated public lands to the states to provide colleges for the benefit of rural US.
The idea was to remove education from being the sole preserve of the privileged and fortunate elite and ‘democratize’ it by bringing it to the children of farmers, mechanics, and laborers. The goal was the application of knowledge to issues relevant to farms, households, and factories. (I am an alumnus of the University of California system which is also a land-grant school, incidentally.)
Thus the land-grant universities were formed with the charter to teach, conduct agricultural research, and most importantly to provide extension services. The sons and daughters of rural America had access to education. Though it was initially thought that the kids would go back to the farm, farm productivity increases precluded that. But that was no tragedy: the urbanization of America was achieved by these educated sons and daughters of rural US — they provided the human resource needed for the US to move from an agrarian society to an industrial society.
Now consider the Indian situation. The urbanization of India is not taking place because the rural population does not have access to education. Thus when forced to move, they migrate to urban India to be employed at menial jobs and live in mega slums. This has got to change if India is to develop. No amount of BPO and ITES is going to cut it: the only hope is to educate the rural population and do so efficiently and with no loss of time. IT has the potential to do just that: bring education to the hundreds of millions in rural India.