February 21, 2018 2:08:59 am
IT industry body National Association of Software and Services Companies (Nasscom) on Tuesday projected a growth rate of 7-9 per cent in fiscal year 2018-19, slightly higher than the 7-8 per cent expected in the current fiscal, while hiring is expected to remain muted.
In its outlook for the forthcoming fiscal, the industry body said that the sector continued to face various headwinds like increased protectionism, tax impact issues in US and sluggishness in technology spending.
“We estimate a 7-9 per cent growth in IT and IT-enabled services for FY19. The domestic revenue may grow at a slightly higher pitch of 10-12 per cent while exports, the mainstay, may lag in FY19,” Nasscom president R Chandrashekhar said while addressing a press conference at the World Congress on Information Technology (WCIT). Nasscom had projected a growth rate of 7-8 per cent for FY18, and the industry is expected to close the year with a growth of 7.8 per cent.
On the hiring front too, there is unlikely to be any significant uptick as the sector is likely to absorb around 1 lakh people in FY19. “Hiring is expected to be similar to FY 2018 with technology jobs in non-technology sectors expected to grow faster,” Nasscom said. In the years prior to FY18, the industry added around 2 lakh people in a year.
According to Nasscom, exports are projected to touch $137 billion in FY19, up from $126 billion in FY18.
The projections by Nasscom reflect the growth rate of the tier 1 Indian IT services companies such as Tata Consultancy Services, Infosys and Wipro, who have indicated a muted outlook. The export segment of Indian IT has also been impacted due to slowing of spending by the BFSI sector, which is one of the largest revenue contributors for Indian IT services players.
Nasscom reiterated the need to capture the value and impact across all components of the digital economy in the country. The vision to build a $1-trillion digital economy by 2022 would require growth across all segments.
Last June, Nasscom had forecast a flat growth rate for FY18. “The year 2017-18 began on a muted note, but driven by a better growth in the second half of the year is expected to clock revenues of $167 billion, representing a growth of 7.8 per cent for export revenues and 10 per cent in domestic revenues. The e-commerce sector is expected to grow by 17 per cent in GMV (gross merchandise volume) terms,” Chandrashekhar said.
According to Nasscom, 2017 started against the backdrop of uncertainties over protectionism, Brexit and a slowdown in technology spend decision making. “There is still some turbulence and it is not clear how some of the known uncertainties will play out. However, FY 2019 is likely to be a better year, based on our current assessment,’’ the Nasscom president said. FE
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