EYES on SOFTWARE

The IT sector grew at a rate of 40% per annum in India. However for the last four years it's been threatened by cuts in IT spending in most parts of the world. USA too has cut their global spending on IT. Since U.S.A is a major client of the Indian software firms, such policies affect the Indian market directly. In a recent study it's been that,

• There will be a modest slow down in the sales growth. Sales will grow but not at an astounding rate as before. The number of jobs too will also grow but with caution after the recent Dotcom disaster. MASTEK forecasts a downfall in profits world over.
• Bureau of Economic analysis, Merrill Lynch has given strategic information about the declining IT spending.
Between 1998 to 1999 the IT spending went down from a previous growth rate of 16 percent over1997 to 12 percent in 1999 over 1998. In 2000 the growth was again 15.67 percent over 1999. In 2001 it's likely to fall below 7 percent (decline). The trend will continue till the first quarter of 2001. After that it will grow again to 8 percent over 2001 but marginally till 2002. Forecast beyond that shows positive growth. The pattern of job availability will possibly follow the per capita spending. The reasons being that most of the Indian companies are dependent on their clients in USA for their revenues. A cut in their spending would have an effect on the Indian scenario.

However, the American way will not affect top companies. Companies like Wipro, Infosys and Satyam would grow. The reason being, the demands for offshore services in like Germany, Holland, Ireland, for software professionals. But the cumulative growth of the whole sector would possibly be low or even negative. This is on account of the death of many small companies and the death of many dotcoms. The opening of many other countries for Indian software professionals will also fuel growth in future though the present scenario is not that fabulous.
According to the Nasscom report demand for this sector will always be higher than its supply for the next ten years.

• The sector is valued at Rs. 60,000 crore at present.
• The compounded annual growth rate is more than 50%.
• 10.5% of the total exports is accounted by software development and it is likely to go up to 23% by2002.
• 203 companies out of the fortune 1000 companies out source their software requirement from India.
• The share of s.d in the country's national income in 1991 was 12%, which is likely to go up to 19.4% in the year of 2000.
• Out of the revenues of $27 billion, 5 billion dollars are from exports.
• Indian software companies are going global
• The revenues from IT are estimated to be $87 billion by 2008 and the industry will be valued at $2 trillion by 2008.
• IT enabled services today requires 46000 software professionals every year.
• By 2008 1.1 million jobs in IT enabled services would be required which is far above what India can meet the demand for.
• By 2008 exports would account for $50 billion.