Indian IT sector to grow 15.5 per cent to USD 227 billion in FY22, fastest in a decade: Nasscom
At a time when the country is struggling with joblessness which is playing out with challenges on the streets as well, the industry added 4.5 lakh new jobs to take the overall number to 51 lakhs.
MUMBAI: India's IT sector is set to grow at 15.5 per cent "the fastest in over a decade" to USD 227 billion in FY22, as the pandemic pushes up demand for digitisation at companies across the world, industry grouping Nasscom said on Tuesday.
The revenue growth is much higher than the 2.3 per cent achieved in FY21 in the immediate aftermath of the COVID-19 pandemic, and double that of the pre-pandemic FY20, Debjani Ghosh, the president of Nasscom, told reporters at its strategic review. Global IT spending grew at 9 per cent to USD 1.9 trillion in the period.
She termed FY22 — the first when overall revenues crossed USD 200 billion — as a year of resurgence for the sector, as against FY21 which tested its resilience."
The body — which ceased an over two-decade-old practice of giving out an estimated growth for the next fiscal a few years ago — now aims to take the overall revenues to USD 350 billion by 2026, Ghosh said, seeking some help from the policymakers.
"The first USD 100 billion mark was achieved in 30 years, while the next came within a decade," she said.
At a time when the country is struggling with joblessness which is playing out with challenges on the streets as well, the industry added 4.5 lakh new jobs to take the overall number of direct jobs to 51 lakh.
About 44 per cent of the new jobs, or nearly 2 lakh employment opportunities, were for women, who now constitute 18 lakh workers in the sector which is giving flexible ways of working under the 'hybrid model'.
With concentration of economic activity is a challenge and policy's efforts on to broad base it, Ghosh said the industry -- which was focused on centers like Bengaluru, Hyderabad and Pune -- has created micro IT hubs in tier-II, III centers like Indore, Jaipur, Kolkata, Coimbatore and Ahmedabad.
"Attrition, the big problem for the industry in the recent past which has also impacted profit growth as companies jostle to retain talent, maybe at its peak right now," the body's vice chairman Krishnan Ramanujam said.
Ghosh called retaining talent — earlier identified as a key strength — as a key imperative for the success of the industry.
From a revenue pie perspective, exports are set to grow 17.2 per cent to USD 178 billion in FY22 or half of the overall service exports, while the domestic market will grow 10 per cent to USD 49 billion, Nasscom said. E-commerce revenues will touch USD 79 billion in FY22 from the year-ago period's USD 57 billion.
The new-age digital services sector saw a 25 per cent growth in revenues and now constitute nearly a third of the overall USD 227 billion pie, Ghosh said, adding that 16 lakh employees or a third of the entire talent pool are digitally skilled.
Looking at the revenue from a segmental lens, the largest contributor IT services grew at 16.9 per cent on the back of demand for cybersecurity, intelligent automation, and analytics in cloud; software products grew at a faster 18.7 per cent to USD 13 billion, while hardware grew the slowest at 7.3 per cent to USD 17 billion.
The domestic market grew on the back of surveys pointing out that over two-thirds of the Indian enterprises have increased their tech budgets in 2021 and aiding factors like 60 million new internet users to take it to 834 million, 1.3 billion Aadhar numbers and 1.036 billion new users on the Cowin app, it said.
From an outlook perspective, a survey of 100 CEOs done by the industry grouping said that they expect the growth momentum to be maintained in 2022 and FY23 will be "another growth year" for the industry.
A larger proportion of deals will be smaller in nature in niche differentiated products, the survey said, adding pharma/healthcare, banking, financial services, and insurance, manufacturing, retail/eCommerce will be among the high tech spend verticals in 2022.
An overwhelming 80 per cent of those polled said they will keep up with the hiring momentum of FY22 in the new fiscal, with a focus on picking up candidates from campus and non-engineering colleges. Digital talent will constitute half of the overall hiring, it said.
The industry — which is famously credited for growing without having to face such restrictions from the government sought help from the government on a slew of factors, with a clarification to accommodate the hybrid work model flagged as the most pressing one.
Ghosh said laws on data protection and cyber security are essential for the sector and stressed on some reservations that Nasscom has. It also asked for uninterrupted power, broadband connectivity, and a sufficient supply of talent in smaller cities.
Union Minister for Electronics and IT Ashwini Vaishnaw welcomed the growth which has been displayed by the industry and assured all necessary help from the government's end to help it flourish further.