India's tech spends to revert to pre-Covid levels, says McKinsey

Pandemic has decoupled the GDP growth and tech spends, it says

The Indian IT services industry will see growth rates at pre-pandemic levels, which would mean growth levels of 8-10 per cent. This is below the 14-15 per cent that the industry saw in the last three years, said McKinsey.

Importantly, from a macroeconomic standpoint the correlation of industry growth with gross domestic product (GDP) growth numbers has also undergone a shift. “Global IT services growth (and tech spending) has been traditionally correlated with GDP growth. For example, during the 2008-09 slowdown, tech spending slowed by 3x versus GDP growth,” said Vikash Daga, senior partner and global leader of tech services