Nasscom cuts hiring target, says salary raise to be muted

NEW DELHI: SD Shibulal, CEO and managing director of the country's second largest software exporter, Infosys said that the global economy, driven by slower growth in developed markets coupled with the European crisis, could impact the growth of the IT industry.

Nearly all the top service providers have warned of weakness in demand. India's IT and IT services sector will cross the $100 billion mark this fiscal but the growth rate will slow down in the next fiscal as concerns over global economic situation and domestic policy issues loom large, industry body Nasscom said.

Nasscom also said hiring is expected to be lesser at 1,00,000 jobs in the next fiscal and the growth in wage rise will also be lesser at around 8-10 per cent.

As per estimates by the industry body, total revenue of the sector will be $101 billion out of which $69 billion will be from exports and $32 billion from domestic market.

Gartner said the gap between what it expects and what the industry is projecting has only widened with Nasscom's lower growth estimates for software exports in the coming fiscal.

In the December quarter, the top 5-8 companies had a revenue growth in the range of 19-25%.

India's largest software services exporting houses such as Tata Consultancy Services and Infosys have been sending out mixed signals about growth ahead, but Nasscom's estimates confirm fears of a slowdown for the industry as a whole. It will re-examine its forecast in October, as economic uncertainties made prediction difficult.

Nasscom has set a $225-billion target for the Indian IT industry by 2020, which the industry can achieve only if it grows at 13% year-on-year for the next eight years.