The Hindu Business Line : Karnataka IT industry poised for 25% growth

Survey projections
Automotive and auto components industry production level may increase 5-7.5 per cent
Steel industry production level projected at 20-25 per cent
Electronics industry may see 20-25 per cent increase in production level

Bangalore May 1 Karnataka's information technology sector, along with electronics and steel, is poised to show a robust 25 per cent growth in production during the April-September 2007 period, according to a forecast by CII-Southern Region.

IT, the State's star performer, is set to yield 25 per cent higher revenue on the back of an expected 15-20 per cent increase in demand.

The growth in demand has spurred sales by 20 per cent; overseas billing by 20-25 per cent and manpower utilisation by 10 per cent in the six months ended March 2007.

"The IT sector is expected to continue its journey in the positive growth trajectory during April-September 07," a CII release citing the survey said here. The projections for the three sectors are based on the CII's previous six months' survey.

"Registering a production growth of 20-25 per cent, Karnataka's electronics, steel and IT industry have been buoyant during October 2006-March 2007," the Industry Monitor Survey said.

The survey covered the top five sectors of the southern States - automobile and auto components, IT, engineering, electronics and steel.

AUTOMOTIVE FLAT

In comparison, the State's automotive and auto components industry showed a flat performance during the previous six months.

Only the employment level grew 3 per cent.

The industry is expected to put up a moderate performance during the current six months: The survey predicts that the production level may increase 5-7.5 per cent, sales 10 per cent and capacity utilisation 2-5 per cent.

For October 2006-March 2007, Karnataka's buoyant steel industry showed a production growth of 20-25 per cent; sales increase of 15-20 per cent and an export growth also of 15-20 per cent.

The value of production increased 10-15 per cent and employment levels rose 10 per cent.

The steel industry is expected to have a prosperous half-year, with a projected increase in production of 20-25 per cent; and sales and exports set to grow 15-20 per cent.

The electronics industry also saw a good half-year, with 20-25 per cent increase in production, 15-20 per cent increase in both sales and exports.

Though the pricing stayed the same, increased sales helped the industry to realise 5 per cent increase in the profit margin. The employment level was up 10 per cent.

It is expected to show 20-25 per cent increase in production; and 15-20 per cent increase in sales and exports, respectively.

ENGINEERING

The engineering industry put up a modest performance, with a production increase of 5-10 per cent and sales growth of 10-15 per cent. This resulted in 5 per cent increase in the profit margin.

The industry is expected to grow 10-15 per cent in production and 5-10 per cent in sales in the current half-year.

The increased production is expected to push the capacity utilisation levels by 5-10 per cent.

The survey said improved roads, power supply and skilled manpower would sharpen the competitiveness of the industries in Karnataka.