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IT sector growth likely to fall to single digit
By siliconindia
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Tuesday, 21 April 2009, 21:52 IST
Bangalore: After growing at an average rate of around 25 percent in three years up to March 2008, India's information technology (IT) sector is likely to post a single-digit growth rate of nine percent in fiscal 2008-09 for the first time, according to a senior government official.
The IT sector, which constitutes 3.5-4 percent of India's GDP, contributed 1 percentage point to GDP growth rate at its 25 percent growth rate. "Thus a sharp fall in IT growth rate has pulled down overall GDP by at least half percentage point," said the official.
The Central Statistical Organization said in its advance estimates that the Indian economy would grow at 7.1 percent in 2008-09, compared with nine percent in the previous financial year, reports Business Standard.
However, India's economy grew at a much slower rate of 5.3 percent in the third quarter ended December 2008. In the first half ended September 2008, the growth rate was 7.8 percent.
Contributions of different sectors were not calculated when the advance estimates were released in January 2009. They will be made available by the end of this month.
"Even though IT sector constitutes a small part of our GDP, its contribution to growth rate is almost same as agricultural sector," said another statistics ministry official.
The farm sector, which has nearly 18 percent weight in GDP, grew at an average rate of 4 percent in the last four years. At this rate, its contribution to GDP growth rate was 0.72 percentage point.
Nasscom expects the software services segment - which constitute over 80 percent of IT industry - to post 15 percent growth rate in fiscal 2009, as against 32 percent in the previous fiscal, due to the recession.
