Export revenues are expected to see a modest increase of 10-12% to $119-121 billion, according to projections released by industry body Nasscom.
Indian software and services companies are likely to hire 200,000 people in FY17, the same number that was recruited in FY16. Moreover, export revenues are expected to see a modest increase of 10-12% to $119-121 billion, according to projections released by industry body Nasscom.
The technology sector is the largest private sector employer in the country with 3.5 million people, and the second biggest in the country in terms of number of people employed, after Indian Railways. A slower growth would mean bad news for the entire economy, as every one job created in the IT industry would, in turn, create three more jobs, according to estimates by Nasscom.
“The emphasis has moved from qualifications to skills,” Nasscom president Rentala Chandrashekhar said on Thursday. He indicated that the job additions would be flat as companies move to hire people with skills and knowledge in areas such as digital, rather than engineering graduates.
The number of hirings is flat because clients as well as technology companies are going for automation, which means that the work an individual can do is now being replaced by super-efficient computers with artificial intelligence, explained CP Gurnani, vice-chairman of Nasscom and chief executive of Tech Mahindra.
Still, there is hope. India graduates about 6.2 million people every year, of which about 1 million are technical graduates.
The total number of people that graduate from Indian colleges and universities constitute about 36-38% of the global employable talent pool for the information technology industry, Chandrashekhar said. He added that many of them can now find jobs in global technology companies, or join start-ups.
India is currently ranked as the third-biggest start-up ecosystem with over 4,200 start-ups, with one start-up begun every six hours. These start-ups are likely to add 40,000 new people during the next fiscal, he said.
Gurnani further added that about 20% of engineering graduates now want to start up on their own and the trend is much bigger among management graduates. The strategy behind maintaining the net hiring numbers is also to maintain or improve margins, he said.
On the overall forecast, the country’s software and services companies are likely to see their revenue from exports to grow by 10-12% to $119-121 billion during the next fiscal year, while it could see its export revenues grow by 12.3% — at the lower end 0f 12-14% forecast — during the current fiscal that ends March 31, Nasscom said.
The industry body said that political instabilities in Europe such as the migrant crisis, and the IS expansion in West Asia were affecting growth. The sector is also facing challenges in some other markets where elections are due, including the US, since political leaders take protectionist view and against outsourcing of jobs to India.
The slump in global crude oil prices, slowdown in China’s economy, and negative currency movements, especially of the US dollar, pound, euro and the Australian dollar, are affecting growth, it said. Technology companies get more than 60% of their work from companies in the US, and about 20% of projects from UK-based companies.
In the domestic market, technology companies are likely to see their revenue grow by 10% during the current fiscal to reach Rs 1,41,000 crore, while for the next fiscal it is estimated to grow by 11-13% to Rs 1,56,000-1,59,000 crore, Nasscom, said.
At home, the growth is likely to be fuelled by the burgeoning e-commerce segment in the coming fiscal, and the government’s initiatives such as Smart City, Digital India and focus on the start-up ecosystem, it said. During the current fiscal the e-commerce segment added $17 billion to the industry’s revenue.