CAD needs IT's help, says Murthy

Infy boss says early days to tell whether US recovery means a full-fledged recovery for the sector

Infosys co-founder and Executive Chairman N R Narayana Murthy on Saturday said information technology (IT) services companies in India should assume greater responsibility in mitigating the problem of high current account deficit.

Speaking to the media on the sidelines of the company’s extraordinary general meeting, Murthy said IT companies would have to perform better.

“At the end of the day, we in India have a huge problem of current account deficit (CAD). Our imports are far more than our exports. Therefore, companies in this (IT services) industry, which add almost 25 per cent to our exports, will have a new and greater responsibility to perform better, as we move forward,” he said.

For 2012-13, India posted a record CAD of 4.8 per cent of gross domestic product. The government feels this should be reduced to 2.5 per cent in the medium term.

Addressing the Federation of Indian Chambers of Commerce and Industry’s annual general meeting, Prime Minister Manmohan Singh had said to reduce CAD, both the demand, as well as the supply side, had to be addressed.

In the quarter ended June, India’s export-driven IT services sector has fared reasonably well. It has also given a better outlook for the remainder of the year, backed by a strong recovery in the US, a key market. Murthy said it was too early to say whether these signs meant a full-fledged recovery of the sector, which has been grappling with a multitude of issues since the global financial crisis began in 2008.

“I am very happy that all the companies have done reasonably well and I hope they will all continue with this trend,” Murthy added.