Nassom forecasts 12-14 percent growth in IT industry

Hyderabad, April 10 (IANS) Despite economic uncertainties, Nasscom has forecast a 12-14 percent growth in the Indian IT industry during 2013-14 against 10.2 percent in dollar terms the previous year.

Som Mittal, president, National Association of Software and Services Companies (Nasscom), said he expects the domestic industry to grow at 15-16 percent and exports to grow at 12-14 percent in dollar terms.

He told reporters here Wednesday that there are signs of 2013-14 proving better than 2012-13.

In the year just ended, IT exports were estimated at $76 billion while domestic sales were $32 billion.

Of the $32 billion, 12 percent were hardware and the remaining were software and services. The total IT revenues during the year were $108 billion.

“This year we probably added $13 to $15 billion new business in both domestic and exports,” Mittal said.

During 2012-13, the industry grew by 10.2 percent in dollar terms, 10.9 percent at constant currency and 21-22 percent in rupee terms.

Mittal said the huge transformation across the world with technology at the centre and social media, mobility, analytics and cloud would drive the growth this year.

“In addition, we are expanding in a new territory. While the US and the UK will continue to grow for us, Asean countries, Africa and Latin America are also big markets which will grow,” he said.

Stating that the Indian IT industry has a large base, he said that when he joined Nasscom in 2008, it had $50 billion mark, but has now touched $100 billion.

Mittal said the industry added 180,000 net jobs in 2012 and is expected to add 130,000 to 150,000 jobs this year.

The industry employs three million people with average age of 27 years. The attrition rate has also come down to 13-15 percent.

Asked about the challenges faced by the Indian IT industry, he said that the next range of business may not necessarily be in English. “It is for us to find ways and means to deliver services in those languages,” he said, while calling for setting up more centres overseas.

“As the uncertainties remain, the deal sizes are going to be small. We need to have more customer engagement to get all this happening,” he added. Mittal stressed the need for having specialist resources and expanding to tier II and tier III cities.

The Nasscom president asked the government to reduce business friction and making things easier for the industry.

“We do have some issues that are pending on taxation, service tax refund. We need to concentrate on business.”

Highlighting the contribution of the Indian IT industry to the country’s economy, he said it added 65 to 70 percent value to exports while the value addition by other sectors in only 10 percent.

“We need to encourage this and show to the world that India is hub for R&D, hub for development centres and innovation. We have the capability to do. We need to tell the world that we will do everything we can to reduce the business friction that exist,” he said.

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