India ranks 37th among the 82 countries assessed by the World Economic Forum for the state of their information technology system and its effects on economic growth and productivity.

The 2003 Networked Readiness Index rates the economies according to their degree of preparedness to capture the benefits of the networked economy.

The rankings were released at the launch of the Global Information Technology Report 2002-2003: Readiness for the Networked World by WEF in partnership with INSEAD and the Information for Development Program of the World Bank (infoDev).

According to the report, the United States continues to offer the best market environment for networked readiness, but slips from first to second place due to less competitive performance in terms of connectivity and diffusion of the information and communications technology.

Finland has taken the first place because of the high technology usage by its citizens, businesses and the government.

Singapore ranks third worldwide but tops the list for its political/regulatory and readiness of its government to employ information and communications technology in its internal processes and delivery of services.

Germany ranks tenth in terms of networked readiness but is the strongest of the 82 economies in terms of information and communications technology usage by businesses.

Among the emerging markets, Israel emerges as a leader in 12th place due to its strong ranking in innovation. Estonia came at 24th, higher than Spain, Italy and Portugal; its ranking boosted by superior information and communications technology government readiness and usage.

Brazil emerged the leader among Latin American countries in terms of networked readiness; its performance leveraged by high ratings in e-government and ranked 29th on the index.

Among African countries, Tunisia ranked ahead of India at 34. China ranked behind India at 43.

The study explicitly considers the roles played by the major stakeholders -- individuals, businesses and governments and examines the networked readiness according to three dimensions.

First, the environment for information and communication technologies which includes the market conditions, the political and regulatory framework and infrastructure.

Second, the readiness of individuals, the business community and government and, third, the actual usage of information and communications technology by the three stakeholders.

"The fundamental role of information and communication technologies has long been recognized as a catalyst for organisational transformation and change. As a consequence, gaining a better understanding of the economic and business impact of information and communications technology has been identified as a key research priority," says Soumitra Dutta, professor of e-business and information technology at INSEAD.

(The name INSEAD originates from the French acronym of the school, Institut Européen d'Administration des Affaires -- loosely translated as European Institute of Business Management -- but now it is simply known as INSEAD.)

India is one of the fastest growing adopters of information technology in the Asia Pacific region.

Software exports from the country cross over $7 billion and the total IT industry is estimated at $15 billion. In 2001-02, the country sold 1.67 million PC boxes and the market is estimated to grow by over 11 percent for 2002-03.

Not surprisingly, experts feel that the rankings do not reflect the complete picture in India.

"India is a huge country with islands of excellence. But the impact of technology is not reflected per capita because of our population of one billion. Also many of these rankings tend to overlook the social structure of the Indian society," says Vinnie Mehta, president, Manufacturers Association for Information Technology, a grouping of hardware manufacturers, vendors, IT research and development organisations and training institutes.

Mehta cites the examples of telephone density and Internet usage to buttress his point. While India has a telephone density of 4 per 100, Mehta says that the Public Call Offices or PCO booths that litter the country serve a community of hundreds of users.

Similarly, while Internet connections are estimated at 4 million, there are over 20 million Internet users in India.

"Unlike western society that is very individualistic, India has a lot of sharing among the community. So, in that case two key factors of telecom density and Internet users get skewed against India in any ranking," explains Mehta.

The Indian IT industry's contribution to the country's economy has significantly increased today.

Software exports now form 16 per cent of the total exports of India and the industry employs over 500,000 technical and managerial personnel.

Yet there are major challenges. IT is yet to be adopted by the Indian government in a big way. Very few services for citizens can be transacted through computers. Only two out of the twenty states in India, Andhra Pradesh and Karnataka, have taken up e-governance in a big way.

Local language tools form an insignificant proportion of the software programs available and the price of computers is still beyond the reach of rural India.

"We need to think radically different about our IT penetration and adoption if we want to raise its profile. We have to think of alternative access devices like the Simputer and look at how personal computers can be brought around the Rs 10,000-15,000 mark," says Mehta.

WEF says its ranking could help countries like India realise their weakness and draft a better IT policy.

"The Global Information Technology Report goes beyond just providing a yearly snapshot. It intends to aid leaders in crafting the best policy environment for competing in a networked global economy. This annual assessment establishes a process whereby governments and other decision-makers can evaluate progress on a continual basis," says Fiona Paua, economist at the World Economic Forum.