Nasscom for the second time in 8 months, downgraded its FY09 growth projections for the sectors due to the global economic crisis.
NEW DELHI: Nasscom, the information technology (IT) and business process outsourcing (BPO) trade body, has, for the second time in 8 months, downgraded its FY09 growth projections for the sectors due to the global economic crisis.
At the CLSA forum, a Nasscom official said, “Acknowledging the near-term growth pressures, Nasscom now sees Indian IT exports in FY09 to grow in the high teens, down from earlier projections of 21-24%.” Its IT export revenues target of $50 billion by 2009 seem impossible now, as even the highest teen rate of 19% will amount to export sales of $48 billion. Nasscom’s goal of $60-billion IT export revenues by 2010 seems difficult.
The revision in growth projection, however, couldn’t be confirmed as Nasscom president Som Mittal is in the US at the moment. But in October, Mittal had said the body was planning to downgrade IT growth numbers in December.
Replying to an email, Nasscom said, “Earlier this year, when Nasscom announced its revenue projections, the growth rates had been moderated for this fiscal to 21-24%, from an average growth of 30%-plus seen over the past few years. However, recent developments were not factored to this extent.”
About 30-40% of the work done by the domestic IT/BPO industry is for the banking, financial services and insurance sector, which has been hit the hardest by the crisis. But the silver lining is that the economic meltdown has changed the government’s attitude towards extension of tax benefits for IT firms from indifference to “greater receptiveness”, Nasscom said. Tax sops for IT companies are set to expire in March 2010.
In July, Nasscom scaled down its growth projections for FY09 to 21-24% from 23-24% in June due to the global crisis.
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