Indian IT exports to log in 32% growth

The Indian information technology sector is expected to touch the Rs 1,00,000-crore (Rs 1,000 billion) mark in export revenue by March 2006, compared with Rs 78,230 crore (Rs 782.30 billion) in 2004-05, clocking a 32 per cent growth rate.

The hardware sector, however, is expected to grow by a mere 15 per cent to cross the Rs 10,000-crore (Rs 100 billion) milestone in export revenue by March 2006 against Rs 8,750 crore (Rs 87.50 billion) in 2004-05.

On the domestic production front, IT and electronics together are expected to touch Rs 1,90,000-crore (Rs 1,900 billion) revenue in 2005-06, compared with 1,47,610 crore (Rs 1,476.10 billion) last year, registering a growth of 29 per cent.

"Together, domestic production revenues of the IT and electronics sector are estimated to grow by 29 per cent to Rs 1,90,000 crore by March 2006," senior government officials told Business Standard.

Of the total IT & electronics revenues, while the hardware sector will grow by 20 per cent to reach Rs 60,000 crore (Rs 600 billion) in 2005-06, compared with Rs 50,000 crore (Rs 500 billion) last year, the software sector is estimated to grow by 33 per cent to Rs 1,30,000 crore (Rs 1,300 billion) against Rs 97,860 crore (Rs 978.60 billion) last year.

"The hardware sector lags behind the software sector primarily due to poor infrastructure and a small domestic market which makes its production a less attractive proposition. The sector has great potential if the three issues are addressed by the government," said Vinnie Mehta, director, Manufacturers Association of Information Technology.

The software industry is also estimated to employ an additional 250,000 staff in 2005-06, taking the total number of employees to 1.3 million, compared with 1.045 million in 2004-05.

"The IT industry is likely to increase its employee strength to 1.3 million by March 2006 against 1.045 million in March 2005," Mehta added.

Estimates are that the industry is likely to add another 900,000 employees in two years, taking the total employee strength to 2.2 million by March 2008.