NASSCOM: IT Industry to Regain Double Digit Growth

According to India's IT industry trade organization NASSCOM, the IT sector is expected to regain its double-digit growth leaving behind the losses stemming from the global recession and downturn in the economy.

NASSCOM president Som Mittal was quoted as saying that beginning in April of 2010, double digit growth is expected to return. He was speaking to reporters at the sidelines of the Economic Summit in India. The IT sector has been growing at an alarming 30 percent every year. However, the sector was first hit badly by the dwindling rupee and then by the economic downturn in 2008 stemming from the subprime credit crisis in the U.S.

A report by The Economic Times indicated that economic activity within the IT industry has recouped. Mergers and acquisitions are back in place, while the leading tech firms are going on a hiring spree. Nonetheless, the current year figures estimate that the IT sector is likely to add just a mere 4.5 percent.

Mittal added that, nonetheless, the NASSCOM forecast will see compounded annual growth of approximately 12 to 14 percent in the next decade or so. At any rate, NASSCOM did indicate that it was too early to revise guidance upwards, despite being bullish about the return of growth. Mittal continued to say that there has some positive changes that have already taken place in terms of growth in IT. He also mentioned that performance of IT firms have been really sad in the first half of the year.

In terms of the scene in the overall sector, Mittal added that clients are discussing end to end modifications and transformations. There is also some talk about obtaining cost efficiencies in the entire organization and not just in IT .