NASSCOM to seek five year STPI extension

In its bid to salvage small and medium IT companies, National Association of Software and Service Companies (NASSCOM) will be seeking a five year extension on Software Technology Parks of India (STPI) scheme. The IT sector body is planning to apply for the extension after the elections.

“We believe the small and medium IT companies should get equal benefits that the large companies will get in special economic zones (SEZs). One year extension is not going to suffice for these companies. We are hopeful we will get a five year extension under the new government after the elections,” said Ganesh Natarajan, chairman of NASSCOM and global CEO of Zensar Technologies Ltd., during a press conference at Nirma Institute of Management here.

Talking about the effect of economic slowdown on the IT sector, Natarajan said that while the year ahead will witness job creation, the growth will not be as high as last year. “The economic slowdown will not result in a negative effect on job creation. Of course, the growth will be not as high as last year. Also, the wage hike in the sector will also be around 9-10 per cent only, as compared to 15 per cent last year,” he added.

According to Natarajan, with the financial meltdown in the US markets, the focus will shift to other emerging markets. “Japan, Korea, China and Africa are some other emerging markets where the focus will shift in the wake of lack of business from the US. Currently, Indian firms have around 60 per cent business dependence on the US which needs to come down to around 40 per cent. Indian firms should look for fresh markets now,” said Natarajan.

Opining on recruitment trends in IT sector, the NASSCOM chairman said that around 70 per cent of manpower recruited by IT companies come from engineering background. “Around five years back, almost 90 per cent of people in the IT industry were engineers. With changing times and dynamic job profiles, this share should come down to 30 per cent,” he added.