Karnik spells out twin strategy to enhance IT growth

NEW DELHI, AUG. 16. The President of the National Association of Software and Services Companies (Nasscom), Mr. Kiran Karnik, today outlined a twin strategy of increasing focus on domestic IT market and promoting India Inc. as a global brand, with a view to enhancing the growth of the infotech sector.

``There is a need to focus on the domestic market also, as it offers a huge potential. We would work closely with the Government to promote the domestic IT market,'' Mr. Karnik said during his first official interaction with the media here.

Mr. Karnik's views come close on the heels of the recently announced annual performance of the industry, which saw the domestic sector clocking Rs. 9,410 crores during 2000-01 with the growth rate slipping to 31 per cent from 45 per cent in 1999- 2000. In 1999-2000, the domestic market had notched Rs. 7,200 crores.

``The IT revenues of the domestic sector could be increased though a sharper focus on e-governance efforts and increasing IT spending in various government departments,'' he said adding educational institutions could play a key role in increasing the demand.

Mr. Karnik said the Nasscom would also strive to project India Inc as a brand for software products. ``There has been enough focus on services. We now need to move up the value chain to be on the product segment, which would give better margins, revenues and recognition,'' he said adding that services would co-exist as a major thrust area as it was the current revenue driver.

Mr. Karnik said to increase IT usage in schools, applications should be developed by domestic companies. "Unless domestic companies develop education software to serve the needs of the schools, there would not be any demand for it", he said.

In the context of Indian companies moving to the product segment, he said a lot of R&D was needed in this effort. Therefore, there should be some incentive from the Government to push up the efforts, particularly in the academic field.

With the Nasscom's agenda extending to the promotion of hardware as well, Mr. Karnik said there was a need to bring both the orgainsations (Nasscom and the Manufacturers Association of Information Technology) under one umbrella.

"There is a possibility of merger between both the orgainsations as that would give a more synergistic and combined approach to the entire gamut of the software industry," he said.

The Nasscom is organising an IT event in Europe on October 23 and later in the U.S. early next year, Mr. Phiroz Vandrevala, Nasscom Chairman, said.

Export prospects

The Nasscom said IT software and services exports would touch Rs. 9,400 crores in the second quarter of 2001-02, reflecting a nine per cent quarter-on-quarter growth.

"In the second quarter, the industry is estimated to grow at the rate of nine per cent over the previous quarter (Q1)," Mr. Vandrevala said.

Giving a break up of projected revenues over the next three quarters of the current financial year, he said, industry export figures would touch Rs. 9,400 crores in the second quarter, Rs. 10,300 crores in the third quarter and Rs. 11,700 crores in the fourth and the final quarter of 2001-02.

Software exports of Rs. 40,000 crores in 2001-02 would represent a 41 per cent growth over the last year's figure of Rs. 28,350 crores.

The IT enabled services sector is expected to witness a growth of 54 per cent with revenues estimated to touch Rs. 6,300 crores in the current fiscal, he said.

Growth of call centres and business process outsourcing in the first quarter of 2001-02 has reaffirmed the fact that the IT enabled services sector is the next growth driver of the industry, he added.

- PTI

Send this article to Friends by E-Mail

Section  : Business
Previous : Bullion rates
Next     : FIIs show interest in pivotals