Bangalore: Like other sectors of the economy, the Indian IT industry too hopes that the budget for fiscal 2014-15, to be presented In parliament Thursday by Finance Minister Arun Jaitley, will spur growth and address its concerns, which are holding up fresh investments and creation of new jobs.
"Though we have returned to double-digit growth and stay on course to sustain the momentum, we hope the first budget of the Narendra Modi government would be equally pro-active to enable us keep pace with disruptive technologies and changing service delivery, a leading industry representative said.
Admitting that the multi-billion dollar industry had matured in offering software services and making India emerge the world's back office, industry body Nasscom president R. Chandrashekhar said the regulatory policy had to be tweaked and sops given to promote start-ups and small and medium enterprises in products space.
"IT bellwethers TCS, Infosys, Wipro or HCL do not look for sops or reliefs in the budget, as they are well established, global and resilient. It is the rest of the companies in the pyramid structure that seek state support to move up the value chain and compete with peers for a larger share of the pie," Chandrashekhar told IANS in an interview here.
With global IT spending projected to grow faster this year by 3.9 percent and business process management (BPM) by 5.9 percent, the National Association of Software and Services Companies (Nasscom) has projected 14-15 percent growth in IT exports to $99 billion this fiscal from $86 billion last fiscal (2013-14), which is a 13 percent year-on-year (YoY) growth.
As sales in the domestic market are also expected to be higher growing in double digit (12 percent) this fiscal to Rs.1,265 billion from Rs.1,150 billion last fiscal, the industry's overall revenues will touch $130 billion in FY15 from $118 billion in FY14.
"Global economic revival and rising tech spend have brought optimism in the industry. Rapid technology transformation is, however, altering client engagement, fuelling business transfiguration, speeding up delivery services and driving innovation in operations," Chandrashekhar asserted.
Noting that the outlook was upbeat as the industry was evolving in scale and complexity, the former IT secretary said the sector would leverage collaboration, innovation, technology shifts and build a transformational agenda for the country.
"The industry will create a new market not only in India, but also globally to serve as a technology differentiator for customers shifting from cost to innovation. The sector will continue to create jobs, generate forex through exports and position it as a global IT-BPM partner," Chandrashekhar observed.
Revival in consumer confidence leading to return of discretionary spending and increased demand from the US and Europe will boost software exports this fiscal.
Though the US continues to be the largest geographic market for India, accounting for 62 percent, revival in demand from Europe had led to 14 percent YoY growth in FY 14.
"With the gap between software services and products blurring and bellwethers leveraging their expertise in both the domains, the budget should ensure the policy and the regulatory environment attract start-ups and SMEs to set up and operate in India rather than in the Silicon Valley of the US or other countries," Chandrashekhar noted.
In a pre-budget presentation to Union Communications and IT Minister Ravi Shankar Prasad here last week, the association sought a Rs.5,000-crore ($836 million)special fund to incubate technology start-ups and SMEs across the country to develop software products and applications that can be used for providing a range of services for enterprises, businesses and e-governance across the country.
"The need of the hour is to improve business environment in India for investment and operations. The new policy should foster an ecosystem to enable innovation and support entrepreneurship, promote growth and global competitiveness of the industry and facilitate skill development and job creation," Chandrashekhar pointed out.
The industry also wants an investment fund with state governments and private equity investors as stakeholders for investing in early stage start-ups, which are not ready for private venture funding.
"Going forward, the industry's mantra will be to collaborate, connect and co-create to offer tailored model for each domain in the ICT sector. We are also working towards enabling transformation of key sectors through the use of ICT to reduce costs, increase access, enhance efficiency and enable innovation," Chandrashekhar added.
(Fakir Balaji can be contacted at firstname.lastname@example.org)