Uncertainty forces Nasscom to defer FY18 growth guidance by a quarter

Initiates deeper interactions with global customers & industry providers to get clear perspective

TRUMP POLICIES

IN AN unprecedented move, IT industry body Nasscom has deferred the growth guidance for the next fiscal (FY2018) by a quarter in the wake of uncertainties caused by US President Donald Trump’s new policies.

On the other hand, amid continuous technology disruptions, political upheavals and slowdown in information technology-business process management (IT-BPM) global spending, the Indian IT-BPM industry is projected to grow at a rate of 8.6 per cent (in constant currency) to reach over $155 billion in FY2017, Nasscom said on Wednesday.

Nasscom president R Chandrashekhar said the association would come out with its guidance for the IT and the business process management sector for FY2018 in next quarter, and his administration’s proposed policies on H-1B visas targeting IT workers have spooked IT majors in India as well as the US. Technology companies in the US depend on H-1B visas to hire scores of nonamerican employees — including a vast number from India — every year. The IT industry is awaiting clarity on Trump’s plans to more than double the minimum salary for H-1B visaholders and massively curb visa issuance to computer engineers.

For FY2017, IT-BPM exports from India are expected to reach $118 billion. “India’s domestic ITBPM market is expected to grow by 12 per cent year-on-year to reach Rs 2,54,500 crore. The industry currently employs over 3.86 million people, growth of 5 per cent and addition of 1.7 lakh people over FY2016,” said CP Gurnani, chairman, Nasscom, and MD & CEO, Tech Mahindra.

“In terms of the markets, US and APAC (Asia Pacific) are fastest growing at 7.8 per cent with gradual stabilisation in the growth of the European market. Retail, healthcare and travel & transportation have been the key verticals for the Indian IT-BPM industry, growing at the rate of 8 per cent,” Gurnani said.

The technology industry is growing on the transformation path to become a digital technology industry by developing its digital capabilities and reorganising itself to make the most of this opportunity, said Raman Roy, vice chairman of Nasscom. “The digital tsunami is reshaping our industry the priority is to reimagine businesses and unlock new opportunities. The Indian IT-BPM sector is emerging as a digital solutions partner for global corporations and we are excited to work across stakeholders — customers, start-ups ... others to build this exciting future,” Gurnani said. THE CABINET on Wednesday approved the merger of five associate banks with State Bank of India (SBI), paving the way for the first such wide-scale consolidation exercise to create a banking behemoth.

State Bank of Bikaner and Jaipur, State Bank of Hyderabad, State Bank of Travancore, State Bank of Mysore and State Bank of Patiala will now be merged with SBI, finance minister Arun Jaitley said after the Cabinet meeting. A time frame for the proposed amalgamation will be announced in due course, he added. The Cabinet, however, hasn’t yet taken up a proposal for the merger of Bharatiya Mahila Bank with SBI, although such a move is under consideration, he added.

“The Cabinet had earlier (in June 2016) in-principle cleared the (merger) proposal. It had gone to the boards of various banks which have granted the approvals. The recommendations of the boards were considered today and the Cabinet cleared the proposal,” Jaitley was quoted by PTI as saying. The country’s largest lender had last year announced the merger of the associate banks as well as the Bharatiya Mahila Bank into itself by March 2017, which was touted as one of the biggest decisions in the banking sector since the nationalisation move in the 1970s. The combined entity was estimated to have an asset book of around Rs 37 lakh crore.

“With this merger, the SBI, with all these five subsidiaries merging in it, will also become a very large bank, not merely from a domestic point of view but actually a global player in its very size,” the minister said.

The Cabinet, chaired by Prime Minister Narendra Modi, also approved the introduction of a Bill in Parliament to repeal the State Bank of India (Subsidiary Banks) Act, 1959, and the State Bank of Hyderabad Act, 1956. FE & PTI

Anil Sharma Finance Minister Arun Jaitley after the Cabinet meeting in New Delhi on Wednesday.