Sorry, Nass­com is Yet to Put a Num­ber on IT

Doesn’ t give out an­nual growth guid­ance for com­ing fis­cal

The Economic Times - - Disruption: Startups & Tech - Our Bureau

RCHANDRASHEKHAR Pres­i­dent, Nass­com

New Delhi: Un­prece­dented un­cer­tainty due to po­lit­i­cal and macroe­co­nomic fac­tors, con­tin­u­ing de­cel­er­a­tion in job growth and re­duc­tion in the tra­di­tional out­sourc­ing busi­ness were the key fac­tors un­der­lin­ing the growth prospects of the $155-bil­lion soft­ware in­dus­try as the IT in­dus­try body Nass­com an­nounced its an­nual re­view for the year 2016-17. Though in an un­ex­pected move, Nass­com re­frained from giv­ing out an an­nual growth guid­ance range for the in­dus­try for the com­ing fis­cal, de­fer­ring it to the next quar­ter, it sounded off a few notes of op­ti­mism by say­ing that pro­jec­tions in­di­cate an up­turn in IT spend­ing in the com­ing year.

On the side­lines of its flag­ship Nass­com In­dia Lead­er­ship Fo­rum event, the in­dus­try body said that the in­dus­try is ex­pected to grow by 8.6% in the cur­rent fis­cal 201617 – which is in line with its guid­ance of 8-10% to touch rev­enues of $155 bil­lion. In Novem­ber, Nass­com had re­vised its guid­ance down­wards from 10-12% af­ter fac­tors such as Brexit, the US elec­tions and the stress in fi­nan­cial ser­vices spend­ing weak­ened the in­dus­try prospects.

“There are huge un­cer­tain­ties in the mar­ket which in­clude macroe­co­nomic fac­tors, the cur­rency fluc­tu­a­tions and the po­lit­i­cal volatil­ity. With the new gov­ern­ment in the US set­tling in, the dis­cre­tionary spend has not re­ally been firmed up,” said R Chan­drashekhar, pres­i­dent of Nass­com. He added that on the pos­i­tive side, there is a pos­si­bil­ity of an uptick in the US econ­omy. “Pro­jec­tions indi-

Ear­lier guid­ance for FY17

cate spend­ing could in­crease any­where be­tween 5-5.3% this year from 2.8%.” The in­dus­try grew by 12.3% in FY 16 as com­pared to the ex­pected 8.6% in FY17. CP Gurnani, chair­man, Nass­com said that a lot of changes are tak­ing place in the world and the rate of change is un­prece­dented. “The in­dus­try is get­ting dis­rupted and the rate of dis­rup­tion is much higher,” he added. Gurnani said that em­ployee growth for the in­dus­try was 5% while the in­dus­try growth came at 8.6%. “This means that we will need less peo­ple for the same rev­enues but au­to­ma­tion also cre­ates new types of jobs for which we re­quire reskilling of em­ploy­ees,” he added. While the IT-BPO ex­ports from In­dia is ex­pected to reach $118 bil­lion, In­dia’s do­mes­tic IT-BPO mar­ket is ex­pected to grow by 12% year-on-year to reach .₹ 2,54,500 crore. The in­dus­try cur­rently em­ploys over 3.86 mil­lion peo­ple, an ad­di­tion of 1.7 lakh peo­ple over FY2016. Mal­colm Frank, chief strat­egy of­fi­cer of Cog­nizant, said that the year 2017 is look­ing to be bet­ter than 2016. “There was a lot of po­lit­i­cal un­cer­tainty last year due to Brexit and the US elec­tions, which has ended now,” he said. Frank added that one of the rea­sons which makes him op­ti­mistic is the growth in the dig­i­tal busi­ness which is no more re­stricted to small value deals. Nass­com also said that there has been a four-time growth in dig­i­tal spends and al­most 12-15% share of the in­dus­try’s rev­enues now come from dig­i­tal.

Ex­pected growth of IT in­dus­try this fis­cal

Growth of IT in­dus­try in FY16 Em­ployee growth Ex­pected ITBPO ex­ports

Ex­pected growth of In­dia’s do­mes­tic IT-BPO mar­ket

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