Computers' Impact Growing in India

International Report

By Steven R. Weisman
The New York Times

NEW DELHI, July 13, 1986 -- Slowly but perceptibly, computers are insinuating themselves into Indian life as a result of Prime Minister Rajiv Gandhi's 19-month-old policies encouraging their use and production. The effects could be far-reaching and profound.

For instance, in the south Indian city of Hyderabad, computers have helped speed test results to students, match job applicants with available jobs and slash long lines of customers waiting to buy train and bus tickets. Here in New Delhi, computers are even churning out horoscopes.

''Computers are finally having an impact on the day-to-day life of people,'' said Dr. N. Seshagiri, director of the Government's computer policies. ''It is more than I expected when we started in 1984. A whole new culture is growing up.''

Sweeping Efforts

At the center of sweeping efforts to cut taxes and curb Government regulations, the effect of Mr. Gandhi's computer policies are easily measured: Indian manufacturers will produce 8,000 home and office computer systems this year, compared with 1,200 in 1984, according to the Department of Electronics. Next year, the number is expected to reach 20,000.

In addition, officials expect to reverse past practices and arrange about a dozen equity participation plans with foreign companies, including Burroughs, Hewlett-Packard, Data General and International Computers Ltd. of Britain. Import barriers are also being lowered, and a few major deals are under way to purchase advanced computer systems from abroad.

For instance, the Control Data Corporation recently won a bid over Honeywell Bull, a French company, to sell to the Indian Government sophisticated mainframe computers worth several hundred million dollars. Such deals, involving the transfer of American technology to India, were made possible by an accord last year between Prime Minister Gandhi and President Reagan.

According to American officials here, computer sales are part of a dramatic increase in the number of American companies interested in developing a presence in India. One official estimated that 100 of the Fortune 500 companies are looking at Indian markets - a sixfold increase in the last year and a half.

Wipe Out Classic Image

If India's computer plans succeed, they would wipe out the classic image of overworked clerks laboriously keeping records by hand on huge, dusty ledgers at banks, railroads, airlines and businesses. Computers will also be used for tax collection, economic planning, production and warehousing, health systems, immigration and many other areas.

Yet, there are problems: Power failures are epidemic, telephone lines are poor and tales of glitches and bureacratic snags abound. Officials also acknowledge that India would have a hard time training 100,000 professionals necessary to run and maintain the computers.

In addition, most industries - including the computer industry - remain so highly regulated that businesses still face layers of clearances before they can import or manufacture computer equipment.

Robin Stone, general manager of Tata Burroughs Ltd., a Bombay-based partnership owned 40 percent by Burroughs, praised the new policies, but complained of ''ridiculous bureacratic practices'' strangling the industry. ''They could have gone a lot further,'' he said of the Government.

There are other problems as well. ''There is connivance and there is corruption, especially at the level of customs officials,'' said Vinay Bharat Ram, an executive at D.C.M. Ltd. and leader of the main computer manufacturers trade association.

Self-Sufficent Philosophy

Since its independence in 1947, India has been guided by a philosophy that places a premium on self-sufficiency. Even with a selective lowering of import barriers, that philosophy is not expected to change. Thus, some foreign companies, which hoped to increase sales of computers here, are finding that India is less interested in large-scale imports than in using foreign parts, expertise and capital to develop its own industry.

Dr. Seshagiri and others admit that the basic object of India's computer policy is to encourage indigenous manufacturers for home and office computers, and to curb imports except for the nation's most-advanced computer needs.

''All personal computers for India can be made within India,'' said Dr. Seshagiri.

However, many of India's 300 computer companies are still at the stage of ''screwdriver technology.'' They import computer kits from Taiwan, Hong Kong or Singapore and assemble them here. The Government is trying to withhold production licenses for these companies, hoping that they will then turn to assembling and making their own components.

''The intention has never been to permit a very free environment for foreign investors,'' said Shyam Malhotra, editor of Dataquest, a computer magazine. ''Foreign companies will have to be very patience oriented, not result-oriented.''

Protectionist Policies

As a result of India's protectionist policies, domestically manufactured home and office computers - like many other consumer products - sell here at twice the price of their equivalents in the international markets. But the companies say they cannot increase production fast enough to cut prices because of the Government's slow pace in liberalizing regulations.

''Give us a chance, and we will produce low-cost computers,'' said Aparna Mafatlal, chairman of two computer companies in Bombay, who added that she was unable to get licenses for the 50,000 computers she wants to produce. ''We had high hopes for Rajiv Gandhi,'' said Ms. Mafatlal. ''but at the moment, computer manufacturing in India is a joke.''

India's computer policies had been in the works well before the assassination of Prime Minister Indira Gandhi on Oct. 31, 1984, but they have come to be identified with her son and successor, who announced them two weeks after he took office.

Mr. Gandhi, 41 years old, has a desktop computer in his office, but has run into his own problems. Critics of any of the Prime Minister's policies usually attribute the problems to the ''computer boys.'' A recent cartoon showed Mr. Gandhi abandoning a smashed up computer terminal because it had failed to find a solution to the Sikh crisis in the northern state of Punjab.

Computer Imports Cited

In addition, Mr. Gandhi is repeatedly accused of rupturing India's trade balance by allowing too many computer imports. Others, worried about computerization putting many out of work, have organized strikes and labor disruptions in protest.

Lately, the Prime Minister has chosen to publicize the benefits of computers for a wide variety of people and new systems are being developed in Hindi, Urdu, Tamil, Telegu, Marathi and other regional languages. But critics still insist that computerization will make life more comfortable for the elite, while providing too few jobs - a view Mr. Gandhi and his aides say is short-sighted.

India used to be a big exporter of machine tools, for example, but its overseas markets evaporated because it could not produce equipment compatible with computers. Now, Dr. Seshagiri said, India would soon be poised to recapture the market.

India has already become a major exporter of computer software, largely because of a Government policy permitting the importing of computer equipment if a company promises to export 100 percent of its software. And computer specialists note that India could help fill the worldwide shortage of skilled computer programmers with people who will work at a fraction of the Western wage rate.

Indian software exports are therefore growing by 40 percent a year. Some companies such as Texas Instruments Inc. develop the software here, and then beam it direct to the United States or elsewhere using the Government's satellite.

'Tremendous Demand'

''We are able to get into the American market because there is such a tremendous demand,'' said Koka Ravindra, head of Era Electronics, which sells software to doctors' offices in the United States.

Even the International Business Machines Corporation, which has won Washington clearance to sell computers to India for oil and natural gas exploration, is considering starting a software exporting operation in India, according to Dr. Seshagiri.

Such moves would carry great symbolic importance, since I.B.M. left India in 1978 rather than give up its equity in its operation here.

The relationship between I.B.M. and India remains as sensitive as ever, however. Dr. Seshagiri said the giant company was still opposed to investing in computer production here because it did not want to give up majority participation with its equity.

GRAPHIC: Photo of railroad ticket agents in New Delhi (NYT/Steven/R. Weisman)