Technology refers to the work processes, techniques, machines and actions used to transform input into outputs. It influences organizational structure. Core technology is the work process that directly relates to the organization’s mission and growth of economy. Information technology (IT) is an instance of a general purpose technology that has the potential to play an important role in economic growth, as well as other dimensions of economic and social development. India has established its brand equity in the global IT market and is today looked upon as an IT super power. The country’s flourishing IT industry has helped to move it from a rural and agriculture-based economy to a knowledge-based economy. This article reviews several interrelated aspects of the role of information technology in the evolution of India’s economy and attempts to list the major challenges faced by it.