The watch that is likely to come with a starting price of Rs. 1,000 is expected to be available in the market by the end of this year.
Communications and IT minister Kapil Sibal announced the initiative while releasing the DEIT's one-year agenda.
A prototype of the proposed watch would be developed within six months by a consortium led by the Centre for Development of Advanced Computing (CDAC).
In 2013, the department will focus on 18 specific items covering areas including initiatives under information technology policy, electronics policy, research and development policy, cyber security policy and development of people-oriented IT solutions, said Sibal.
The department will provide ICT-enabled information service delivery to comman man on welfare schemes of the government using multiple channels for service delivery. At present, it is difficult for a comman man to know all the schemes that the government has launched and hence he may not get benefits.
The government will also launch schemes aimed at achieving mass literacy in IT.