Tech cos say govt’s IT thrust to reboot sector

Mumbai/Bangalore: The new dispensation at the Centre has come as a ray of hope for the Indian IT sector, which expects a renewed thrust towards the field by a stronger, reform-oriented government. This comes at a time when the Obama administration plans tax clampdown that could hurt Indian players.
The software services and outsourcing industry expects the UPA government to increase spending on IT initiatives, education and infrastructure, fuelling growth, which lost steam because of the global financial crisis. The meltdown has forced many US, Europe and Japanese companies to pare their IT budgets, hitting Indian firms.
From TCS, Wipro, Infosys to HCL, Patni and Cognizant, companies are now scrambling to raise their share in the domestic software and IT services pie, valued at Rs 58,000 crore. Their earnings from the domestic market has been less than 10%. Additionally, government contracts have become more important because of their sheer size and long tenure besides being credible and financially stable.
Tata Consultancy Services MD S Ramadorai says, “Given the proven benefits of technology usage in programs like NREGA to speed up development and enable efficient public administration as well as deliver government services to the citizens’ doorsteps, the new government should embark on a $5-10 billion investment programme in e-governance initiatives.’’
National Rural Employment Guarantee Act, the flagship job guarantee programme, had been one of the major initiatives that worked in favour of UPA.
The industry hopes the government should leverage its capabilities to catalyse development programmes in education, healthcare as well as implementing unique identity card for each citizen.
The knowledge incentive industry, which generates the highest number of jobs, expects the Centre to increase its budgets to improve job skills and education in the country.
Avinash Vashistha, CEO of Tholons, an offshoring advisory firm, says, “Drawing examples from China, the new government should invest significantly in education and training. SMEs are going to drive the next-gen growth of the country, therefore the government should give them better growth incentives.’’