I think the worst is over. That does not mean that they are going to have very attractive growth rates for the IT sector for ’09 or ’10. But I think certainly for 2010 or 2011 you will see a strong revival for the IT sector from India.
What do you term attractive in terms of growth for the sector?
About 15%.
You think this year could be slower in terms of growth?
Yes.
Do you think by next year, once you go through the next four quarters, we will be able to get back to the FY08 kind of growth?
Unlikely. In terms of being realistic about the situation in a market with uncertainty, I think it is always best to approach opportunities with some amount of pessimism. So one is able to restructure or cost structure to meet more aggressive requirements of the customer. And if upsides happen quickly, the ability to respond to those upsides by not eating into any other muscle of the organization.
Sure, your point is taken that you are not betting on it from an organizational perspective. But why do you say it is unlikely that even after four quarters you will not get back to the kind of levels which existed a year back?
The base is larger. Competition is there; globally, customers have to recover from the devastation that they have gone through. The amount of money which has got lost to the circuit is over $2 trillion. Part of it will get recovered but that’s not a small sum; it’s an excess of 10% of the world’s money supply. It will be naive to expect that (its effect) can disappear overnight.
If you were to take the financial sector out of this equation, do you think the rest of the universe that you work with will recover? Or not even then?
No, I think you have to appreciate that the financial sector is the backbone of every economy. Parts of the economy divorced from the financial sector cannot operate as business as usual.
What impact does the slowdown in IT have on the Indian economy?
I think what the government should be aware of is that job creation in the next three years will be significantly less than the job creation in the past three years or the past five years, particularly in the services sector. So they have to be clear in terms of how much money they can pump into other parts of the sector which are less service-dependent to be able to create these jobs. And the most apparent sector seems to be infrastructure. I don’t think we have a situation in our country of trying to stimulate demand that will come on its own because of the nature of the spending habits and the nature of consumption, (and its) weightage of the GDP unlike China. But they (the government) have to stimulate demand and job employment through infrastructure and the country is woefully inadequate on infrastructure. So that is a priority anyway. It is not a stimulus package.
Given that necessity that you speak of, do you think the new disposition that comes into power in another month’s time or so will have a tough job on its hands? And do you think the nature of the combine that comes to power becomes even more important?