What is the importance of documentation in programming life cycle?

Documentation is critical unless you are the only person who will ever, ever, ever look at a piece of code. And even then, if you go away from it for 6 months you will probably have trouble remembering what you did.

In business, code MUST be commented because the person fixing or enhancing the program is often not the person who wrote it. It can take 4 or 5 times as long to figure out what a program is doing when you only have the computer-language logic available, as opposed to an English-language explanation of the underlying concepts.

It's also critical to keep the documentation up to date and accurate in both facts and spelling. If the code has been changed and the documentation hasn't, that disagreement can mislead anyone who comes along and tries to work on the code later. If you can't spell or use lousy grammar, it can make it a lot harder to perform text searches looking for a particular phrase that's likely to appear in a comment. Try searching for PARAMETER when somebody spelled it PARAMATER, for example (I've had to do just that!!)

The above is an explanation to why documentation is important in one of levels of software documentation - Technical or Code Documentation. There are other levels of documentation including Software Requirements Documentation, Software Architectural/Design Documentaion and End-User Documentation (e.g.: Manuals, Tutorials). Documentation at each of these levels is usually necessary, or at least desired, for most non-trivial software projects. For more information on these levels of documentation and to who and how it may be important, pls see http://en.wikipedia.org/wiki/Software_documentation