Indian IT industry to grow by 2.3% in FY21: Nasscom Report

The year 2020 has been hit by pandemic and everyone witnessed sharp declines in growth across industries. India’s IT sector was an exception. It is expected to grow by 2.3% to $194 billion in the 2020-21 financial year, as estimated by Nasscom. 

Nasscom’s report also stated that the IT exports would touch $150 billion this year, which is a 1.9% growth over last year. The sector expanded its employee base to 4.4 million after the addition of 1.3 lakh employees during the same period. As per the report, IT services grew 2.7% to $99 billion, while BPM grew 2.3% to $38 billion, and engineering R&D degree 0.2% to $31 billion.

The Indian tech sector contributed 8% to the national GDP, with 52% share in services exports, and 50% share in total FDI (based on FDI inflows for the period April to September 2020). 

“We have added $4 billion to the industry (this year). Indian IT sector continues to be a net hirer. A lot of these hires were in jobs that were being created due to the adoption of newer technologies and not in the traditional jobs”, said Nasscom president Debjani Ghosh. 

She further said that the digital revenue was 28-30% of industry revenue, or $50-53 billion, with a growth rate of 5x times the overall services growth rate.Nasscom’s report said that the enterprises are redrawing their technology spends to prioritise digitisation. “There’s a shift to offshore and work-from-anywhere models post the pandemic”, said Nasscom chief strategy officer Sangeeta Gupta.

She said that the industry saw a shift towards more outcome-based pricing. The attrition rate dropped by 50% in the second-half of the 2020 calendar year compared to the first half.  “Continental Europe and Apac have emerged as one of the strongest growth geographies in the 2021 fiscal. BFSI & healthcare were key growth verticals during the year”, Gupta added.

Digitally-equipped IT workforce now comprises 26% of the overall employee strength, up from just 8% three years ago, with most focusing on cloud computing and data analytics.“Digital transformation is the top-most priority for global corporations and in a highly connected world that will remain largely contactless for an extended