Indian IT-BPO sector revenue is set to cross the $100-billion mark in 2011-12 even as concern over global economic situation and domestic government policies cloud over future growth of the industry.
Industry body Nasscom said export revenue would grow by 11-14 per cent in the financial year starting April.
“The environment is foggy with some silver linings. Despite challenges in the global market conditions, India has sustained its growth trajectory. Exports for the year stood at $69 billion registering a growth of 16.3 per cent while domestic market grew faster than exports at 16.7 per cent (valued at Rs 78,700 crore). We see this growth as a good resilience to the external market conditions,” Mr Rajendra S Pawar, Chairman, Nasscom, told reporters.
Total revenue
According to the Strategic Review report by Nasscom, the total revenue of the sector will be $101 billion out of which $69 billion will be from exports and $32 billion from domestic market.
Nasscom, which has over 1,200 members, said that globally, growth is slow but the business has grown due to changed business models. The industry body said the outlook would be revised later in the year when more data are available.
“We will revisit this forecast in October. The mood is more sombre now and these uncertainties are forcing us not too look at the whole year,” he said, adding that the incremental growth will come from geographies and newer verticals.
Mr Pawar said the next wave of growth will come from start-ups and also small and medium enterprises.
“We want small companies to play larger roles. Though small in number, contributing about $2 billion, they will be a major growth engine and will generate revenue in the second half of the decade,” he said.
Job additions
Mr Som Mittal, President, Nasscom, said for 2011-12, the total job addition in the industry is seen over 2.3 lakh across the country. Nasscom also said hiring is expected to be lesser at one lakh jobs in the next fiscal and the growth in wage hike will also be lesser at around 8-10 per cent as against 10-14 per cent in the current fiscal.
India retained its numero uno position as the world's leading sourcing location for IT-BPO services, despite the rise of several alternative sourcing locations, with a share of over 58 per cent in 2011.
The industry can meet the vision 2020 target of touching $225 billion provided it grows at a compounded annual growth rate of 13 per cent from fiscal 2012-13, he added.
Nasscom also sought clear policy guidelines for a sustaining growth.
“There is policy paralysis in India. There is no roadmap on DTC, GST and SEZ issues. Also there is increased tax activism and sometimes we feel we are soft targets,” Mr Mittal said.
Reacting to the Nasscom numbers, a HCL spokesperson said, “With increasing global uncertainties and the changing business landscape, what got us here may not get us to the next milestone and hence we need to use this opportunity to reflect as an industry on the evolution and innovation required to attune to the ‘new normal'.”