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IT sector to log growth of 16-18% in FY12: Nasscom [Financial Express (India)](Financial Express (India) Via Acquire Media NewsEdge) Despite economic uncertainties in the US and Europe, India's software body Nasscom is confident of a 16-18% growth rate of the country's information technology (IT) industry with the sector slated to bring in about $68-70 billion in revenue. The growth in the domestic market is estimated at 15-17%, with revenues of about $19-20 billion. This assumes significance as the industry body had presented a conservative outlook of 16-18% growth in IT exports in 2011-12 in the wake of the slow economic recovery in the US and uncertainty in the European region in February this year. Though Nasscom president Som Mittal maintained a cautious outlook, he said: "There is no reason for us to be worried... We have spoken to customers and they are looking at expanding into geographies and bringing newer solutions to the market". As for the business process outsourcing (BPO) industry, a Nasscom and Crisil report noted that India is positioned as a knowledge services powerhouse, with 70% share of the $2.9-billion global industry. The industry has also generated employment for almost 70,000 people in over 100 firms. "In the last decade, the industry has grown 16 times in size, to reach $16.9 billion (including domestic) in FY11. In addition to fuelling India's economy, direct and indirect employment creation is estimated at 4.5 million," said Nasscom president Som Mittal. In fact, India is the leading BPO destination, accounting for over 37% of the total global sourcing BPO revenues, followed by Canada and Philippines. However, Nasscom's former chairman and non-executive vice chairman of the country's largest BPO Genpact, Pramod Bhasin said: "Competition from China and the Philippines is a serious issue as the calibre of students coming from their colleges is better than ours." Further, lower profitability, billing rates, fiscal incentives and data security were also cited as factors having a negative impact on the industry. The Nasscom-Crisil report -called 'India Knowledge Services Industry'- added that led by financial services and healthcare, the knowledge services outsourcing industry in India is expected to grow at a 22.2% CAGR over FY2010-15 to a $ 5.6 billion market. While business research would continue to be the most widely adopted serviceline with a 39.4% share, representing a $2.2 billion opportunity, the share of data analytics is expected to increase from 18.5% to 20.6% ($ 1.15 billion) over the period. Legal Process Outsourcing is also expected to record robust growth to a $1.3 billion market by then. The report emphasised that this represents the next wave of outsourcing as organisations push the envelope to exploit cost efficiencies by outsourcing elements of their core operations as opposed to outsourcing of supporting business processes. "These include services like market research, business research, data management and analytics as well as outsourcing of legal process outsourcing, each of which is critical to a cohesive decision making process," the report said. Copyright 2011 The Indian Express Online Media Ltd., distributed by Contify.com (c) 2011 The Indian Express Online Media Ltd., distributed by Contify.com |