NASSCOM forecasts 12 percent growth
The Indian Information Technology (IT) and Business Process Outsourcing (BPO) trade body National Association of Software and Services Companies (NASSCOM) today came out with its industry outlook for the next fiscal 2014-15. The growth rate projected by the industry body for the current fiscal year is between 12 to 14 percent while the next fiscal’s growth forecast for the ITES sector is between 13 to 15 percent.
Political uncertainty at the center due to the forthcoming general elections along with industrial slowdown, have been attributed as two key reasons for the sluggish growth of domestic business. The other reason cited is the over-dependence of big IT companies on traditional export markets for the Indian ITES products and services.
As long term growth strategy measures, NASSCOM has suggested expanding the services to the remote areas within the country and also targeting transformation of new as well as less covered sectors like healthcare, education, banking and financial sectors. The Small and Medium Enterprises (SME) too, if adequately support by the government, can play a significant role in industry’s growth in the coming years.
The other measures, which NASSCOM feels can help the industry in sustaining growth in the long run, is to gradually reduce industry’s over reliance on the western export markets like United States and the European Union for revenue growth as these are increasingly becoming saturated and competitive. The industry should instead explore new markets like China, Japan and South Korea, which even though not significant in terms of their revenue share at this stage, can be big growth drivers for the future. One more suggestion for the industry would be to move up in the value chain from a service provider to a strategic partner to address the need of its customers.
Post general elections, the trade body expects the new government to initiate broad range of policy measures including easing of regulatory burden and providing financial incentives to the Small and Medium Enterprises (SME) which it feels can accelerate the growth.