The Hindu Business Line : Software sector set to net $16 b in exports: Nasscom

THE Indian software industry is on course to achieving about 30 to 32 per cent growth in exports this fiscal to cross the $16 billion (around Rs 69,920 crore) mark in spite of several concerns including infrastructure bottlenecks in major cities.

Human resource challenges, huge fluctuation in dollar rates, relatively higher bandwidth costs and security related legislations are other concerns, according to the Nasscom President, Dr Kiran Karnik.

Speaking to newspersons here on Tuesday on the sidelines of a Security conference, Dr Karnik observed, "software exports peaked to $12.5 billion (around Rs 54,625 crore) last fiscal despite a recessionary trend in the US, lower tech spend and the post 9/11 issues. However, the tech sector turnaround has been remarkable given the tough business environment, including outsourcing related issues. Though the US elections are behind us, outsourcing related concerns still remain."

Dr Karnik said, "The domestic market however continues to be subdued. Even the proposed investment of about 2 per cent of the Government budget for the IT sector has not actually happened. We will continue to urge the Government to allocate 2-3 per cent for IT in next Budget".

"With the India Inc brand well established, major corporations and some large customers are expressing concerns about infrastructure related issues. They question, if we can construct about one million sq.ft office space in six months, can't we develop related infrastructure? The case in point is Bangalore where the airport project is pending for years. We need to expedite," he said.

The other major issue relates to cyber security that calls for amendments in the existing enactments.

`Flux in dollar rates a concern'

THE recent volatility in the dollar rates is a serious cause of concern for the software sector as about 70 per cent of the exports are dependent on the US markets, Dr Karnik said.

Fluctuation of about 2-3 points is fine, but large fluctuation creates pressure. While large corporations have the capability to hedge and thereby de-risk, it is the SMEs, who account for a large part of exports, are faced with tough prospects.

They would not have resources to meet this issue, he added.

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