Despite COVID resilience, IT industry to see muted growth this year: Economic Survey

Market diversification will increase resilience in the sector for the future, but the expected global economic slowdown is likely to dampen technology spending this year

Image used for representative purpose only. File | Photo Credit: K. Pichumani

The Information Technology-Business Process Management (IT-BPM) industry showed resilience during the COVID-19 pandemic — even growing slightly — and recorded 15.5% growth during the financial year 2021-22, the Economic Survey 2022-23 said.

Referring to a NASSCOM report, the Survey said that end-user technology companies benefited from a “rise in investment, more complex technology convergence use-cases, and the prioritisation of [an] enterprise-scale data and cloud strategy.”

“Many firms are now focusing on new markets, more prominently the Middle East and Latin America leading to market diversification which will increase the IT-BPM sector’s resilience in the coming years,” the Survey said. “NASSCOM’s quarterly review in August 2022 indicates that technology spending during FY23 is likely to see a relatively muted growth dampened by an expected global slowdown.”

“The industry undertook over 290 Mergers and Acquisitions in FY22, primarily focusing on digital services,” the Survey said. “India’s massive digital infrastructure played a crucial role in driving technology adoption.”