The National Association of Software and Services Companies (Nasscom) on Wednesday said the IT industry is likely to end this financial year with 7.7 per cent revenue growth to touch $191 billion mark. Though this (growth rate) was higher by 160 basis points over FY19, the industry body said that it remained 'cautiously optimistic' about the growth prospects for the coming fiscal year, FY21.
"Based on what the CEOs say we are cautiously optimistic. We are going in that invest mainly in two-three areas, which will actually take care the demand for digital and technology solutions," said Keshav Murugesh, Chairman of Nasscom. Murugesh, who is the CEO of WNS Global Services, also said that the industry aspires to reach $350 billion revenue mark by 2025.
However, after missing Nasscom’s 2020 collective revenue projection of $200-225 billion, it looks difficult to achieve $350 billion revenue mark which requires the industry to grow at a CAGR of close to 13 per cent for the next five years.
Nasscom, which discontinued the practice of providing its annual growth projections citing changing nature of business, said that IT services sector is likely to touch revenues of $97 billion in FY20, a growth of 6.7 per cent over the last financial year. Similarly, revenues from e-commerce sector is expected to be $54 billion, a rise of 25.6 per cent over the same period of last fiscal.
In FY20, exports from the sector will be at $147 billion, which is 8.1 per cent higher over the same period of last fiscal.
"Despite so much negativity, rising protectionist themes, Brexit and other headwinds, the industry has delivered well ahead of expectation," said Murugesh.
In FY20, the industry body said that the net new employees’ addition stands at 205,000, which is 15,000 higher than FY19. This is the highest number of addition of new employees in the last five years. While FY17, the industry added 173,000 staffers, it stood at 105,000 in FY18 and 190,000 in FY19.
On the ongoing visa restrictions by Trump administration, president of Nasscom, Debjani Ghosh said that the government has to change narrative about the importance of Indian engineers in driving the US growth.
"We have to change the narrative and that's our recommendation to the government. The US administration has to realise that 90 per cent of the H-1B visas are going to US companies and not to Indian companies," said Ghosh.
"High skill talent mobility is critical for a company’s growth and this shouldn't be treated as immigration."