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Perhaps for the first time in recent history, Nasscom has shied away from making a growth forecast for the next financial year and deferred it to the next quarter.
This comes even as the IT industry’s apex body said the overall growth for the current financial year is expected to be 8.6 per cent, which is at the lower end of the earlier guidance of 8-10 per cent. At the start of the year, Nasscom had project a growth of 10-12 per cent for FY 2017.
The $155-billion IT industry, which relies largely on software exports, said that it was holding back projections for 2018 due to political uncertainties and a slowdown in discretionary spending.
“We could have given a guidance of 6-10 per cent growth, based on the statistics of our experts, but we thought to hold on for another quarter. I’d rather give you the right data than to again make the same mistake,” Nasscom Chairman CP Gurnani said.
“Going by the fact that there are a number of uncertainties, we will be able to provide a forecast only by early next quarter. We hope to grow at more reliable numbers in the next few quarters,” said Gurnani, who is also the CEO and MD of Tech Mahindra.
Some cheer, too But it’s not all gloom and doom for the IT sector. India’s share in global sourcing has gone up from 52 per cent in 2012 to 56 per cent in 2016. India is still the biggest destination for business process management with revenues of $30 billion and its share of digital revenues has gone up from 4 per cent in 2014 to 14 per cent.
Nasscom is optimistic as it believes that the country is well positioned to capture opportunities from companies that are starting to increasingly adopt technology. Also, business from financial services, which account for 60 per cent of outsourcing business, is on an upswing. “It is better than 2016, given the rising interest rates,” said R Chandrashekar, President, Nasscom.
On the slowdown in hiring by IT firms, Chandrashekhar said in the outsourcing industry50-60 per cent of skills required are in new areas such as Artificial Intelligence and analytics.
The skill-set requirements of these new areas are a break from from the past, when knowledge of programming languages such as Unix or C could land a programmer a coding job. Similarly, knowledge of English would have landed a person a job in a call centre.
All this is changing. The future skills work group at Nasscom has, therefore, partnered with consulting firm BCG to train engineers in an attempt to meet the changing technology landscape in the country. This would help in skilling or re-skilling 1.5-2 million people over the next four to five years.
The industry currently employs over 3.86 million people.
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