IT sector to meet $57 bn target by 2008

IRIS

While the Nasscom-McKinsey report has revised and made some corrections to
its earlier forecasts of 1999, the IT sector is right on track and will achieve
the earlier projected targets, said McKinsey and Nasscom officials at the IT and
ITES Strategy Summit in Hyderabad today.

The industry has grown at a CAGR of 46 per cent in the last four years,
exceeding the 38 per cent target set in the previous report. This is in spite of
the slowdown experienced during the last two years. The high CAGR has reduced
the current required growth rate to 34 per cent. Last year the IT services
segment recorded approximately 29 per cent growth.

Both Nasscom and McKinsey officials reiterated that despite the slowdown, the
earlier targets of $57 billion in export revenues and $70-80 billion in overall
revenues were a distinct possibility.

ITES will be the driver of this growth, and the contribution of the IT
industry to the country’s GDP will increase from 1.4 per cent in 2001 to
approximately seven per cent by 2008. Significantly, it will contribute nearly
20 per cent of the incremental GDP growth between 2002 and 2008, says the
report.



While India will continue to face competition from nations like China,
Philippines and even Ireland, it should be able to maintain its lead. In case of
China, the huge domestic market will ensure that local Chinese service providers
will try to first tap the business opportunities internally before targeting the
West.

The report has also ‘demanded’ that the government ensure that issues
like Data Confidentially, Piracy and Privacy laws are in place. Union minister
for IT and communications Pramod Mahajan, who delivered the keynote address at
the summit, assured the industry that the recommendations of the Convergence
Committee are already ready and will be tabled before parliament in July. ‘The
Convergence Act is likely to be passed by August test by the end of 2002,’
said Mahajan.

The government will intervene with speed whenever required to ensure that the
needs and requisites of the IT industry are taken care of on a priority basis.
Chandrababu Naidu, chief minister of Andhra Pradesh, who was the chief guest at
the inaugural ceremony said that ‘his state will provide all and more
facilities required by the IT industry from time to time including the
implementation of local legislation like the Data Protection Act and the Privacy
Act.’

Mahajan also spoke about making changes to labour laws to permit women to
work later hours. ‘Women form the back bone of the ITES segment,’ said
Mahajan. ‘We will ensure that they are provided with the right atmosphere and
motivation,’ he added.

The exorbitantly high price of real estate vis-à-vis other cities like
Singapore, Bangkok, Seoul and Sydney is a dampener and must be dealt with, said
Naidu.

Source: myiris.com