The domestic information technology-business process management (IT-BPM) industry is estimated to grow at 10 per cent on account of enterprise digital acceleration and transformation, the Economic Survey 2023 said on Tuesday.
The industry recorded nearly 10 per cent estimated growth in direct employee pool in FY2021-22 with a highest-ever net addition to its employee base, it said.
In the software sector, the industry undertook over 290 mergers and acquisitions in FY22, primarily focusing on digital services. India’s massive digital infrastructure played a crucial role in driving technology adoption, with public digital platforms becoming the bedrock of India’s digital advantage, it said.
“However, Nasscom’s quarterly review in August 2022 indicates that technology spending during FY23 is likely to see a relatively muted growth dampened by an expected global slowdown,” it highlighted.
The survey also said that India has emerged a digital talent nation with a high share of the working population and growing undergraduate enrolments. Employment across technology companies witnessed an increase, with an uptrend in the digital talent base.
“New talent hiring from tier-2 cities, with a focus on reskilling non-tech talent, has led India to evolve as a significant subcontractor base, with more women getting back into the workforce,” it said.
Hybrid work models
The Indian tech industry also led the adoption of hybrid work models. The technology used for augmenting employee experience and integrating tech solutions in aspects such as employee onboarding, communication, collaboration, and employee well-being and enablement has been the major driver.
The human resource functions at organisations are undergoing a transformation journey -- the organisations are moving forward with an objective to deliver cost savings while expanding services and improving experiences by using a combination of labour arbitrage, optimised workforce models, elimination of low-value vendor spends, increasing talent liquidity and reducing people space cost, it said.
The Survey also said that there is an increasing penetration of digital tech and “Made in India digital-first solutions for the world.” In India, the proportion of digital revenue as a percentage of total revenue has increased from around 26-28 per cent in FY20 to 30-32 per cent in FY22.
In recent years, India has emerged as a global powerhouse for Engineering R&D (ER&D) and innovation and is steadfastly committed to ushering future growth and innovation for global enterprises. Many Global Competency Centres (GCCs) have also been incorporated in India in the last six years.
GCCs in India are increasingly performing complex R&D functions and are leveraging futuristic technologies and developing digitally innovative products as well building either the largest or the second-largest ER&D hubs in India.
Patent filing has increased drastically, with over 1,38,000 patents filed between 2015-21, with over 85,000 filed in emerging technologies, it added.
IT-BPM revenues registered YoY growth of 15.5 per cent during FY22 compared to 2.1 per cent growth in FY21, with all sub-sectors showing double-digit revenue growth. Exports (including hardware) witnessed a growth of 17.2 per cent in FY22 compared to 1.9 per cent growth in FY21. Growth in exports was seen across all the major markets, with the US, Europe, and the UK continues to be the major markets.
Many firms are now focusing on new markets, more prominently the West Asia and Latin America leading to market diversification which will increase the IT-BPM sector’s resilience in the coming years.