Contraction in domestic revenue growth softened IT-BPM sector growth in FY19: Survey

Contraction in domestic revenue growth "softened" the overall pace of revenue growth of the IT-BPM sector to 6.8 per cent in 2018-19 from 8.2 per cent in the previous year, the Economic Survey said on Friday.

Nearly 83 per cent of the IT-Business Process Management (BPM) industry continues to be export-driven, with export revenues crossing USD 135 billion in 2018-19, it said.

"During 2018-19, the revenue growth (y-o-y) for IT-BPM sector (excluding hardware) softened to 6.8 per cent from 8.2 per cent in 2017-18. This was driven by a contraction of 0.3 per cent in domestic revenue growth even as export revenue growth accelerated to 8.3 per cent," it added.

Of the total USD 135.5 billion of exports of the IT-BPM sector in 2018-19, IT services accounted for 55 per cent, and BPM and software products & engineering services for the remaining 45 per cent (with each accounting for almost half of the share).

"All three sub-sectors witnessed a pick-up in export revenues in 2018-19, with IT services growing (year-on-year) by 7.3 per cent, BPM services by 8.3 per cent and software products and engineering services by 11.2 per cent," it added.

The survey termed the Indian IT-BPM industry as the flag-bearer of India's exports over the past two decades, and noted that the industry size has reached about USD 177 billion in March 2019.

It also noted that the sector had contributed significantly to the economy by way of employment generation and value addition.

It said the Indian start-up ecosystem has been progressing and is now the third largest in the world with 24 unicorns, but added that its gap with the largest (China at 206) and second largest (USA at 203) markets "remains significant".

Cities such as Bengaluru, Delhi-NCR and Mumbai account for around 55 per cent of the total start-ups in India, it said citing industry data.