nasscom: IT industry to grow 2.3% to $194bn in FY21: Nasscom

BENGALURU: The year has been marred by pandemic-related sharp declines in growth across industries. One major exception is India’s IT-ITeS sector. It is expected to grow by 2.3% to $194 billion in the 2020-21 financial year, according to estimates by Nasscom. The industry body, however, did not disclose the constant currency growth number, which was 8.4% last year.

Nasscom’s strategic review for the year showed that IT exports would touch $150 billion this year — 1.9% growth over last year. The sector added 1.3 lakh employees during the same period, taking the total base of knowledge workers to 4.4 million. IT services grew 2.7% to $99 billion, while BPM grew 2.3% to $38 billion, and engineering R&D degrew 0.2% to $31 billion.

The Indian tech sector contributed 8% to the national GDP, with 52% share in services exports, and 50% in total FDI (based on inflows for the period April to September 2020). “We have added $4 billion to the industry (this year). Indian IT sector continues to be a net hirer. A lot of these hires were in jobs that were being created due to the adoption of newer technologies and not in the traditional jobs,” said Nasscom president Debjani Ghosh. She said digital revenue was 28-30% of industry revenue, or $50-53 billion, growing 5x the overall services growth rate.

The Nasscom report said enterprises are re-balancing their technology spends to prioritise digitisation. “There’s a shift to offshore and work-from-anywhere models since the pandemic,” said Nasscom chief strategy officer Sangeeta Gupta. The industry, she said, saw a shift towards more outcome-based pricing.

The attrition rate dropped by 50% in the second-half of the 2020 calendar year compared to the first half. “Continental Europe and Apac have emerged as one of the strongest growth geographies in the 2021 fiscal. BFSI & healthcare were key growth verticals during the year,” Gupta said.

Deal value for cloud was up 80% in the first half this fiscal compared to the same period last year. Digitally skilled IT workforce now comprises 26% of the overall employee strength, up from just 8% three years ago, with most focusing on cloud computing and data analytics. “Digital transformation is the top-most priority for global corporations and in a highly connected world that will remain largely contactless for an extended period, there are shifts in business models, customer experience, operations, and employee experience,” said Nasscom chairman U B Pravin Rao.