Indian IT-BPM sector saw recovery in revenue growth at 7.9% in FY20: Eco Survey

By: |
January 29, 2021 6:13 PM

BPM Services maintained its share at 19.8 per cent, while the hardware services has been declining in share each year but maintaining growth in revenues, the Survey said.

IT services constituted the majority share (over 50 per cent) of the IT-BPM sector at about USD 97 billion in revenues in 2019-20. Software and Engineering Services too, has witnessed a consistent growth and constituted 21 per cent share (USD 40.2 billion in revenue in 2019-20).IT services constituted the majority share (over 50 per cent) of the IT-BPM sector at about USD 97 billion in revenues in 2019-20. Software and Engineering Services too, has witnessed a consistent growth and constituted 21 per cent share (USD 40.2 billion in revenue in 2019-20).

The Indian IT-BPM sector witnessed a recovery in revenue growth at 7.9 per cent in FY2019-20, primarily driven by a significant boost in domestic revenue, as per the Economic Survey 2020-21.

The Survey highlighted that the government undertook a number of structural reforms last year amid the pandemic to drive innovation, technology adoption and efficiency in the sector, including relaxation of OSP Terms and Conditions, and Consumer Protection (E-commerce) Rules, 2020.

“This would significantly expand access to talent, increase job creation, make India a global hub for digital services and catapult the sector to the next level of growth and innovation,” it said.

Describing the Indian IT-BPM industry as a flag bearer of India’s exports over the last two decades, the Survey said a significant part (about 84 per cent) of sector’s revenue (excluding hardware and e-commerce) continues to be export driven.

“Export revenues (were) in excess of USD 146 billion in 2019-20… During 2019-20, the revenue growth for IT-BPM sector (excluding hardware and e-commerce) made a recovery to reach 7.9 per cent up from 6.8 per cent in 2018-19. This was driven primarily by a significant boost in domestic revenue growth (6.6 per cent in 2019-20 from -0.3 per cent in 2018-19),” it said.

The Survey noted that the IT-BPM sector (excluding Hardware and e-commerce) had seen growth rates of 8.2 per cent in 2017-18, 8.1 per cent (2016-17) and 9.1 per cent (2015-16).

It added that the last decade has been that of consolidation and the industry has succeeded in decoupling revenue and employee growth.

Over the last decade, the industry grew by 102 per cent, reaching USD 190.5 billion in revenues in 2019-20. It also added 1.8 million employees, up 70 per cent over the last 10 years.

IT services constituted the majority share (over 50 per cent) of the IT-BPM sector at about USD 97 billion in revenues in 2019-20. Software and Engineering Services too, has witnessed a consistent growth and constituted 21 per cent share (USD 40.2 billion in revenue in 2019-20).

BPM Services maintained its share at 19.8 per cent, while the hardware services has been declining in share each year but maintaining growth in revenues, the Survey said.

At the beginning of 2020, Indian IT companies were concerned about the impact of the pandemic on their businesses. Interestingly, the pandemic has accelerated adoption of technology as clients bet on digital tools for resilience and business continuity.

The Survey highlighted that the government simplified the Other Service Provider (OSP) guidelines last year to enhance ease of doing business, especially for the Business Process Management (BPO) and IT-enabled services players.

The new guidelines tremendously reduce the compliance burden of the BPO industry and enables to ?Work from Home’ (WFH). In effect, the registration requirements of OSPs were done away with altogether and BPO companies engaged in data related operations have been taken out of the ambit of OSP.

“These changes will enable IT-BPM companies to ‘Work from Home’ and ‘Work from Anywhere’. Additional dispensations to enhance flexibility for the industry have been allowed,” the Survey said.

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