IT budget to remain flat or slightly up in 2011: Infy CEO

Infosys Technologies says the information technology (IT) budget of clients would be flat to slightly positive in the next calendar year.

“At least at this point of time, there is no concern for a double dip recession in the global economy or there is a much lesser concern about this. And if the sentiment remains as such, client budget will remain flat or slightly up in 2011,” Kris Gopalakrishnan, chief executive officer and managing director of Infosys Technologies, said. He was speaking to reporters on the sidelines of an All India Management Association event here.

He said the US was recovering faster than Europe from a slowdown as evident from the second quarter results. “Client confidence was already lower in Europe than the US. That is why they are spending lower in Europe,” he said. “Europe has been slower in recovery.”

The UK government’s recent decision to cut public spending by £81 billion by 2015 to reduce its rising debt would not affect sentiment in the European region, according to him. These cuts will see over half a million people losing their jobs.

Referring to the upcoming visit of American President Barack Obama, he said industry body National Association of Software and Service Companies, or Nasscom, was in touch with the Prime Minister’s Office regarding the concerns of the industry. He exuded confidence that the concerns would be discussed during Obama’s visit.

“As an industry, we do have a view that most job losses are not due to the outsourcing to India. It’s in the construction and retail sectors where most of the work has gone online. We will highlight these issues and request the support of Obama to make sure at least the sentiment doesn’t remain negative,” Gopalakrishnan said.

The recent border security bill and immigration policy would remain a cause of concern for the Indian IT industry. However, he said the industry had to live with such protectionist measures in the near term.