Nasscom maintains growth forecast of 16-18% for IT industry

The industry witnessed a growth of about 17-18 percent year on year in the first half of the current fiscal

PTI | December 7, 2011



Software industry body Nasscom on Tuesday maintained its growth projection of 16-18 per cent for the sector in this fiscal, notwithstanding concerns over economic uncertainty in global markets.

"We at Nasscom expect the industry to grow at 16-18 per cent rate, as forecast earlier," Nasscom President Som Mittal told reporters here on the sidelines of Nasscom DSCI Information Security Summit 2011.

In the first half of the current fiscal, the industry has witnessed a growth of about 17-18 per cent year-on-year, he added.

Nasscom had in February presented a conservative outlook of 16-18 per cent growth in IT exports in 2011-12 in the wake of the slow economic recovery in the US and uncertainty in the European region.

The growth in software and services export is expected to be 16-18 per cent and the sector is slated to bring in revenues of USD 68-70 billion.

The growth in the domestic market is estimated to be 15-17 per cent, with revenues of about USD 19-20 billion.

The US and European region account for over 85 per cent of the revenues of the over USD 70 billion Indian IT sector.

Indian IT firms are now waiting for clients to finalise their IT budgets for the next year, which will in turn determine their performance in the coming fiscal.

Confident of a good performance in FY'13, he said, "Even for the next year, while there are concerns and uncertainty, we see our members continue to hire and prepare for the next year. They are opening up (centres) in new markets and looking at new verticals. This is what will keep the industry going."

He, however, added that the industry maintains a cautious outlook.

Mittal said it is innovation that was driving the growth for Indian IT firms, despite the global economic woes.

"Its the way we run our businesses today. It is really an operation that we run. We help our customers move to mobile platform, use cloud computing, develop process and products for addressing markets in emerging countries.

"So I think, those are the things we want to invest in for the future and that is why we haven't seen any significant reduction in engagement with our customers or business that comes in," Mittal said.

On the impact of rupee's depreciation on the sector, Mittal said, "It is very important for us to have a stable currency. Surely at 51-52 rupee level, there could be certain gains. Some have hedged and suffered losses also ... so at this point of time, a weak rupee would boost our exports and offset some of our inflation-related increases that we are seeing."

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