IT/ITeS, electronics sectors show sluggish growth in 2007-08

Strong rupee attributed as primary cause

The Indian electronics and information technology and IT-enabled services industry grew 19.3 per cent in 2007-08 — the slowest in six years — to touch a value of Rs 2,91,000 crore.

The sluggishness in growth has been attributed mainly to appreciation of the rupee against the dollar.

Incidentally, only in the previous year did the industry enjoy its highest-ever growth rate of 28.3 per cent, according to the annual report published by the Union Ministry of Communications and Information Technology for 2007-08.

Strong revenue, jobs

The performance of the electronics and IT industry in 2007-08 in rupee terms had a deceleration.

This, however, does not reflect on the fundamental of the IT-ITeS sectors, which continued to be strong both in revenue terms and generating employment.

In 2007-08, the total value of software and services export was estimated at Rs 1,63,000 crore ($40.3 billion), an increase of 15.6 per cent in rupee terms and 28.3 per cent in dollar terms.

A year ago, the sector’s export reached Rs 1,41,000 crore ($31 billion), an increase of 34.8 per cent in rupee terms and 33 per cent in dollar terms, says the report.

BPO growth

Growing annually at over 35 per cent over the last four years, the business process outsourcing segment was the fastest-growing in the Indian IT sector.

BPO exports grew at 21 per cent to Rs 44,600 crore and this sector employs 2.16 lakh, the annual report says.

The IT-BPO sector ended 2007-08 with a direct employment of two million people compared with 1.63 million a year ago.

Every one job directly created by the sector generates four additional indirect jobs related to it.

Another eight million are estimated to have been indirectly employed by this sector last year, the report says.

Courtesy - T.E. Raja Simhan , Business Line