Global meltdown forces relook at Indian IT industry forecast

Global meltdown forces relook at Indian IT industry forecast
PTI
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First Published: Wed, Nov 19 2008. 07 10 PM IST
Updated: Wed, Nov 19 2008. 07 10 PM IST
Bangalore: India’s apex IT industry body Nasscom is taking a relook at the growth forecast of 21-24% for IT and the BPO industry for the current financial year due to the global economic downturn and would come out with a clear position on it in the third week of December.
“We have no basis to give a number today. We are doing our research. Why give a knee-jerk (assessment now),” President of the National Association of Software and Service Companies (Nasscom) Som Mittal said Wednesday.
In December third week, Nasscom would come out with a clear picture on the impact of global slowdown on India’s IT/BPO industry, Mittal told reporters on the sidelines of a Nasscom organised IT Women Leadership Summit 2008.
According to him, the top 10 listed IT companies in India have clocked 25%-plus revenue growth in dollar terms in the first six months of the current financial year over the corresponding period last year.
Europe and North America accounted for 90% of revenues of the Indian IT industry, the Nasscom head said.
“We are at a downturn which would impact on growth rate, and then there will be three-four quarters where growth rate will be uncertain, lower than 30%, and post-that, we will spring back,” he said.
Mittal said hiring by the IT industry in the current financial year would be lower than the previous year, while there could be some company-wise job lay-offs. But such cuts are not an industry-wide phenomenon. There is no net industry job cuts, he added.
According to Mittal, 92-93% of the workforce employed by the Indian IT-BPO industry adds value to customers, while the remaining is support staff.
Hiring is slowing down because attrition is lower now, while efficiency is getting improved.
“But people are back in the campus for (hiring) next year. If they did not have confidence to use those resources next year, then why should they go to campus and create a problem?,” he asked.
In the current situation of economic slowdown, Indian companies need to invest in domain expertise and on providing transformational services, Mittal said.
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First Published: Wed, Nov 19 2008. 07 10 PM IST