Are Nasscom’s software export figures overstated?

NEW DELHI: It could well be termed as the ‘calm before the storm,’ if one

takes into account certain events that have happened in the IT field. Now

consider this: Nasscom has predicted Indian software exports will soar by 51.1

per cent this year, with revenues in the range of Rs 28,500 crore ($6.24

billion) in fiscal year 2000-01, up by Rs 11,350 crore, from the Rs 17,150 crore

($4 billion) in 1999-2000.

But there has been increasing speculation among a section of the media, that

these figures may be inflated by as much as 25-30 percent. But there are two

aspects of this speculations: One, these projections do not discount the

expenditure incurred overseas on account of training, marketing and maintenance.

Second, whether it is right to include the earnings of the overseas subsidiaries

of the companies into the gross projections of the earnings?

Since Nasscom uses the figures provided by the companies per se, without

taking the above aspects into account, the argument is that these figures may

not match the ground scenario. However, Nasscom president Dewang Mehta,

vehemently denies these allegations and says the association's figures are not

overstated as Nasscom uses statistics from corporate balance sheets in which

overseas expenditure is not deducted from their income.

Mehta uses the RBI definition of exports as "all that is invoiced out of

India". Nasscom's figures depict the software exports and not the net

foreign exchange earnings. On the revenue of overseas subsidiary of Indian firms

being included in the total software Indian exports, Mehta says firms themselves

include the revenue from their overseas subsidiaries in their balance sheets. As

Nasscom includes only the figures provided by companies that have a 100 percent

overseas subsidiary, he feels that the figures have not been inflated, as

projected by a section of the media.