Amid growing uncertainties, information technology (IT) industry body National Association of Software and Services Companies (Nasscom) has stopped giving guidance for the sector. Instead, it has come out with a CEO survey for FY20, in which 51% of CEOs said they felt that the year ahead would be similar or somewhat lower than 2018 in terms of growth.
‘In transformation’
Confirming the development, Nasscom president Debjani Ghosh said, “The narrative is significantly changing as the industry is in transformation. In 2019, we still see growth across, but not at a pace as in 2018, so we are cautiously optimistic for 2019. On March 29, there is the Brexit decision; U.S.-China trade war and the technology regulations are new challenges. They are fundamentally changing the scope of businesses.”
On breaking its tradition of providing guidance for the industry’s growth for the upcoming financial year, Ms. Ghosh said, “Guidance looks at the past, we are now looking at the future. Providing guidance is not the right way to indicate growth. We have to look the industry with a new lens. The way we looked things at the past is not going to hold true for the future. We should start looking at what the future should look like.”
According to Nasscom, 2018-19 was an ‘exciting’ year for the industry as the export sector crossed $137 billion in revenues and marginally grew above the Nasscom guidance of 7-9%.
Growth driver
Interestingly, the industry’s sub-sectors have also expanded beyond IT Services and together are almost half the industry’s revenues in 2018-19. Digital was the growth driver for the year, growing at 30% and is estimated at $33 billion in FY19.
Growth in the start-up sector was another key highlight of the year, as India witnessed eight unicorns being born and start-up funding reached an all-time high.
As per the CEO survey, global economic uncertainties are leading to a cautionary outlook among CEOs, but they expect digitisation initiatives to continue with the same momentum in the next fiscal.
Rishad Premji, chairman, Nasscom, said, “The IT-BPM industry, with a revenue of $180 billion, continues to be a key catalyst for India’s growth. During the year, the industry’s performance also showcased a changing narrative for the sector, a sector focused on internal transformation and driving transformation for its clients globally and in India.”
