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IT growth forecast to be reviewed - NASSCOM
By siliconindia
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Saturday, 08 November 2008, 00:15 IST
Hyderabad: The downturn blues is affecting the IT again with the apex body for the Indian IT National Association of Software and Services Companies (Nasscom), to revise their earlier prediction of industry growth for 2009. IT industry was expected to grow over 20 percent in FY 09 as against 28 percent in FY08.
"We were expecting the industry to grow at over 20 percent. But, we will come out with a revised forecast in the first week of December after analyzing the situation," said Som Mittal, Chairman of Nasscom. The IT body cites that the slowdown will be caused by lowering of further hiring, which is again the result of increase in utilization levels and process automation. "Earlier, our utilization rate was about 71-72 percent and now it has gone up significantly. Some companies have utilization rates of over 80 percent. If there is a three percent increase in utilization in the industry, the overall hiring will come down by 60, 000," Mittal said.
Moreover, another reason for the uncertainty in their earlier forecast is the decline in earnings, which will result in a dramatic fall in the profit margins while pouring out taxes. But Mittal expects the government to extend STPI tax breaks which will release the companies from their current turmoil to a certain extent.
