INDIAN SOFTWARE INDUSTRY FACTS AND FIGURES :2011
 
Technology import policy of India <ul><li>Period of liberalization until mid sixties. </li></ul><ul><li>Period of tight re...
Industrial policy resolutions <ul><li>Government of India adopted Industrial Policy Resolution Act. (April 1948) </li></ul...
<ul><li>The Monopolies and Trade Restrictive Practices Act (MRTP Act) 1969. </li></ul><ul><li>(The industrial groups with ...
<ul><li>Industrial policy as a whole was reviewed in 1973, 1977 and 1981 </li></ul><ul><li>(Industries with the investment...
Why liberalization in 1991   <ul><li>India’s economy grew at the rate of about 5% during 1980s. </li></ul><ul><li>Domestic...
Policy changes since 1991 <ul><li>Drastically reduced number of industries reserved for public sector. </li></ul><ul><li>A...
Government Incentives  <ul><li>Telecom sector deregulation  </li></ul><ul><li>Sector deregulated in the mid and late 1990s...
ECONOMIC LIBERALISATION - 1991 ONWARDS <ul><li>New measures introduced were: </li></ul><ul><ul><li>Virtual abolition of in...
MAIN FEATURES <ul><li>INFO INFRASTRUCTURE DRIVE </li></ul><ul><ul><li>No license fees for ISP for first 5 years </li></ul>...
MAIN FEATURES <ul><li>FINANCIAL SOPS (Contd... ) </li></ul><ul><ul><li>Banks to give 25 percent of the contract value for ...
MAIN FEATURES <ul><li>GLOBAL THRUST </li></ul><ul><ul><li>A blanket approval for acquisition of software/IT companies acro...
MAIN FEATURES <ul><li>MANPOWER ISSUES </li></ul><ul><ul><li>The seven national level institutions (IITs, IISc.) shall be e...
 
 
Q3 AND Q4 FORECAST : FY 10-11
FICCI : EXECUTICE SUMMARY
NASSCOM’s strategic review 2011 <ul><li>IT-BPO industry registered a growth of  19.2 per cent in FY2011 . </li></ul><ul><l...
GLOBAL SOURCING TRENDS <ul><li>Worldwide technology products and related services spend is estimated to cross USD 1.6 tril...
IT-BPO SECTOR-OVERVIEW <ul><li>Total IT-BPO industry to reach  USD 71.7 billion  accounting for  5.8%  of India’s GDP; sof...
IT SERVICES <ul><li>IT Services involves a full range of engagement types that include consulting, systems integration, IT...
ENGINEERING SERVICES, R&D AND SOFTWARE PRODUCTS <ul><li>The engineering, R&D, and software products exports segment is exp...
BPO MARKET <ul><li>BPO services exports,  up 18 per cent , was the fastest growing segment across software and services ex...
HARDWARE MARKET <ul><li>Despite the declining trends in pricing observed across key categories, increasing volumes have en...
INDIAN’S IT-BPO VALUE PROPOSITION <ul><li>Strong fundamentals , a robust enabling environment, and enhanced value delivery...
FUTURE OUTLOOK <ul><li>Despite the unprecedented economic downturn the industry will witness sustainable growth </li></ul>...
Electronics & IT Industry   The production and growth trend of the Indian Electronics and  IT industry since 2004-05 has b...
Indian IT industry to hire 2.25 lakh in 2011: Deloitte <ul><li>MUMBAI: Indian IT industry will add over 2.25 lakh employee...
Union Budget 2011: No extension to STPI <ul><li>NEW DELHI: The 2011-12 Budget has failed to bring cheer to the Indian IT s...
TAX HOLIDAY END : 2011 <ul><li>The Budget has brought down curtains on the tax holiday of the Software Technology Parks of...
NASSCOM <ul><li>Total revenue of the software and back-office outsourcing sector, including sales from the domestic market...
AVENUES : 2011 <ul><li>Indian IT industry  is expected to add 183,000 jobs in 2011, says the Ma Foi Randstad Employment Su...
 
 
ANY QUERIES…. THANKS
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JOB OPPORTUNITIES IN INDIAN IT INDUSTRY

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JOB OPPORTUNITIES FROM 2012 ONWARDS IN INDIAN IT INDUSTRY

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  • Iip – index of industrial production Wpi – wholesale price index Consumer price index industrial workers
  • BFSI –BANKING FINANCE AND INSURANCE SECTOR
  • Smb small and medium business
  • National Association of Software and Services Companies ( NASSCOM )
  • JOB OPPORTUNITIES IN INDIAN IT INDUSTRY

    1. 1. INDIAN SOFTWARE INDUSTRY FACTS AND FIGURES :2011
    2. 3. Technology import policy of India <ul><li>Period of liberalization until mid sixties. </li></ul><ul><li>Period of tight regulations from then until the end of seventies. </li></ul><ul><li>Period of relaxation of regulations from then until the end of eighties. </li></ul><ul><li>Regulations were then relaxed and the policy became once again liberal. </li></ul>
    3. 4. Industrial policy resolutions <ul><li>Government of India adopted Industrial Policy Resolution Act. (April 1948) </li></ul><ul><ul><li>Private sector development of Industry. </li></ul></ul><ul><ul><li>Reserve for development of exclusive industries in public sector. (The manufacture of equipment viz telephones, telegraph and wireless apparatus excluding radio receiver sets one of the six major areas of industrial activities so reserved) </li></ul></ul><ul><li>The Industries (Development and Regulation Act of 1951) </li></ul><ul><li>In 1956 Parliament adopted Industrial Policy Resolution (IPR 56). </li></ul>
    4. 5. <ul><li>The Monopolies and Trade Restrictive Practices Act (MRTP Act) 1969. </li></ul><ul><li>(The industrial groups with assets of Rs 200 million and above would be allowed to undertake activity only in specific group of industries) </li></ul><ul><li>The Foreign Exchange and Regulation Act. (FERA) 1973. </li></ul><ul><li>(Restricts the Indian activities of the companies having more than 40% foreign equity to the same group of industries as the MRTP houses. Net payment in foreign exchange increased from Rs 412 million in 1977-78 to Rs 1848 million in 1980-81) </li></ul>Industrial policy resolutions
    5. 6. <ul><li>Industrial policy as a whole was reviewed in 1973, 1977 and 1981 </li></ul><ul><li>(Industries with the investment of Rs 50 million now don’t need the license if their annual requirement of imported raw material does not exceed four million rupees or 15% of the production whichever is less.) </li></ul><ul><li>In 1983 government announced certain special tariff and tax concessions for the electronics industry. </li></ul><ul><li>In March 1984, the IPR 56 was amended. </li></ul><ul><li>( The manufacture of Telecommunication equipments such as private automatic branch exchange (PABXs), telephone instruments, teleprinters and data communication equipments for installation. Also jointly with the public sector with 5% investment by the government the private sectors now manufacture switching and transmission equipments). </li></ul>Industrial policy resolutions
    6. 7. Why liberalization in 1991 <ul><li>India’s economy grew at the rate of about 5% during 1980s. </li></ul><ul><li>Domestic inflation gone up to 17% in 1991. </li></ul><ul><li>Foreign exchange reserves reduced to $ 1.2 billion barely sufficient to pay for two weeks imports. </li></ul><ul><li>Central government fiscal deficit as a percentage of GDP touched the all time high of 8.4%. </li></ul><ul><li>Current account deficit widened to $ 8 billion (2.6% of GDP) </li></ul>
    7. 8. Policy changes since 1991 <ul><li>Drastically reduced number of industries reserved for public sector. </li></ul><ul><li>Abolished industrial licensing except for a short list of industries related to security and strategic concerns, hazardous chemicals. </li></ul><ul><li>The restrictions imposed by MRTP Act on large firms expansion, merger, amalgamation and take over etc..have been abolished. </li></ul>
    8. 9. Government Incentives <ul><li>Telecom sector deregulation </li></ul><ul><li>Sector deregulated in the mid and late 1990s to allow private sector and MNC participation </li></ul><ul><li>Regulatory reform to allow adoption of new technologies </li></ul><ul><li>Enable benefits of free market competition </li></ul><ul><li>Improved service quality and declining tariffs </li></ul>
    9. 10. ECONOMIC LIBERALISATION - 1991 ONWARDS <ul><li>New measures introduced were: </li></ul><ul><ul><li>Virtual abolition of industrial licensing, </li></ul></ul><ul><ul><li>The dilution of MRTP Act w.r.t. expansions/mergers </li></ul></ul><ul><ul><li>Relaxation of FERA on foreign companies holding a majority stake in certain Indian operations </li></ul></ul><ul><ul><li>Abolition of import licenses </li></ul></ul><ul><ul><li>Lowering of customs duties. </li></ul></ul><ul><li>Software exports were also aided by </li></ul><ul><ul><li>Decline in disputes over intellectual property rights </li></ul></ul><ul><ul><li>Lessening of complaints from the international s/w industry </li></ul></ul><ul><ul><li>Lessening of export of certain technologies after Cold War ended </li></ul></ul>
    10. 11. MAIN FEATURES <ul><li>INFO INFRASTRUCTURE DRIVE </li></ul><ul><ul><li>No license fees for ISP for first 5 years </li></ul></ul><ul><ul><li>Promotion of Hi-Tech Habitats </li></ul></ul><ul><ul><li>Export shipment time for air cargo will be reduced to less than 24 hours </li></ul></ul><ul><li>FINANCIAL SOPS </li></ul><ul><ul><li>IT Software shall be entitled for zero customs duty and zero excise duty </li></ul></ul><ul><ul><li>The definition of software and export turnover changed so as to include IT services exports to get Tax Exemption under Section 80 HHE of the IT Act </li></ul></ul>
    11. 12. MAIN FEATURES <ul><li>FINANCIAL SOPS (Contd... ) </li></ul><ul><ul><li>Banks to give 25 percent of the contract value for 18 months </li></ul></ul><ul><ul><ul><li>with the first six months as term loan (without collateral's) </li></ul></ul></ul><ul><ul><ul><li>From the 7th month onwards annualised Cash Flow Statements shall be accepted instead of collateral's. </li></ul></ul></ul><ul><ul><li>IT software and services industry shall be treated as a Priority Sector by banks for period of five years </li></ul></ul><ul><ul><li>Working Capital amount increased from 400 Crores to 1200 Crores </li></ul></ul><ul><ul><li>Banks shall be allowed to participate in Venture Capital funds </li></ul></ul><ul><ul><li>Banks shall setup JVs for setting up of at least four different venture capital of a corpus not less than Rs. 50 crores </li></ul></ul>
    12. 13. MAIN FEATURES <ul><li>GLOBAL THRUST </li></ul><ul><ul><li>A blanket approval for acquisition of software/IT companies across the board for software exporters </li></ul></ul><ul><ul><li>Combating Visa regulations of the recipient countries through a planned diplomatic strategy </li></ul></ul><ul><ul><li>Enabling Indian Marketing companies to set up wholesale companies abroad. </li></ul></ul><ul><ul><li>'India Pavilions' shall be set up in several major IT exhibitions </li></ul></ul><ul><ul><li>'Mega Web sites' shall be created on INTERNET for promoting marketing </li></ul></ul>
    13. 14. MAIN FEATURES <ul><li>MANPOWER ISSUES </li></ul><ul><ul><li>The seven national level institutions (IITs, IISc.) shall be encouraged to triple their output of students in IT </li></ul></ul><ul><ul><li>IT Course Module shall be made a compulsory component of all Degree Courses </li></ul></ul><ul><ul><li>The setting up of Indian Institutes of Information Technology (IIIT) shall be implemented with urgency </li></ul></ul><ul><ul><li>Promote pairing of our Universities with centres of excellence in IT in developed countries </li></ul></ul><ul><ul><li>Specific courses in association with the Software Industry and top management institutes to provide Project Management skills and Software Marketing </li></ul></ul>
    14. 17. Q3 AND Q4 FORECAST : FY 10-11
    15. 18. FICCI : EXECUTICE SUMMARY
    16. 19. NASSCOM’s strategic review 2011 <ul><li>IT-BPO industry registered a growth of 19.2 per cent in FY2011 . </li></ul><ul><li>Exports estimated to grow by about 18.5 per cent in FY2011 and reach USD 59 billion </li></ul><ul><li>Domestic segment (including hardware), grew by 21 per cent in FY2011, to reach USD 28.8 billion. </li></ul>
    17. 20. GLOBAL SOURCING TRENDS <ul><li>Worldwide technology products and related services spend is estimated to cross USD 1.6 trillion in 2008, a growth of 5.6 per cent over 2007. </li></ul><ul><li>Worldwide BPO spending in 2008 grew by 12 per cent , which was the highest among all the segments. BPO today is an integral part of the global delivery chain and is increasingly involved in mission critical applications. </li></ul><ul><li>Global sourcing market size has increased threefold since 2004, to reach USD 89-93 billion in 2008. </li></ul><ul><li>Offshore IT-BPO service providers continued to build their global delivery footprint, expanding service lines and also growing inorganically by acquiring firms in the US and Europe to build skills and “nearshore” delivery capabilities. Therefore, though the established players dominated the market, Indian heritage service providers gained ground and market share. </li></ul>
    18. 21. IT-BPO SECTOR-OVERVIEW <ul><li>Total IT-BPO industry to reach USD 71.7 billion accounting for 5.8% of India’s GDP; software and services revenues aggregated to about USD 60 billion </li></ul><ul><li>Software and Services export revenues estimated to grow over 16-17% to reach USD 47 billion </li></ul><ul><li>Direct employment expected to reach nearly 2.23 million , an addition of 226,000 employees, while indirect job creation estimated at ~8 million </li></ul><ul><li>India’s fundamental advantages—abundant talent and cost—are sustainable over the long term. With a young demographic profile and over 3.5 million graduates and postgraduates that are added annually to the talent base, no other country offers a similar mix and scale of human resources </li></ul><ul><li>Seven Indian cities account for 95 per cent of export revenues, focus on developing 43 new locations to emerge as IT-BPO hubs </li></ul><ul><li>Higher growth in European/Asian market </li></ul>
    19. 22. IT SERVICES <ul><li>IT Services involves a full range of engagement types that include consulting, systems integration, IT outsourcing/managed services/hosting services, training and support/maintenance. </li></ul><ul><li>IT services (excluding BPO, Engineering Services, R&D and Software products), contributing to 57 per cent of the total software and services exports, remains the dominant segment and is estimated at USD 26.9 billion, a growth of nearly 16.5 per cent  in FY2009. </li></ul><ul><li>Domestic IT services spends grew at over 43 per cent in FY2008, showing strong signs of increasing sophistication as building enterprise IT infrastructures and applications, networking and communication became key priorities for India Inc. </li></ul>
    20. 23. ENGINEERING SERVICES, R&D AND SOFTWARE PRODUCTS <ul><li>The engineering, R&D, and software products exports segment is expected to grow by 14.4 per cent in the current fiscal, to touch USD 7.3 billion , which highlights the strong impetus and renewed focus on improving IP driven service capabilities in India. </li></ul><ul><li>Indian software product companies revenues are expected to account for 21 per cent of total software product revenues in FY2009, up from 20.6 per cent in FY2008 . The market is expected to grow exponentially driven by an increasing number of start-up software product businesses as well as a rapid growth of existing businesses. </li></ul>
    21. 24. BPO MARKET <ul><li>BPO services exports, up 18 per cent , was the fastest growing segment across software and services exports driven by scale as well as scope. BPO service portfolio was strengthened by vertical specialization and global delivery capabilities. </li></ul><ul><li>Emergence of domestic BPO is the key highlight for FY2009 recording a growth of above 40 per cent in INR terms. The growth is led by the BFSI, Telecom and Airline industries and a greater vendor focus with specific service offering </li></ul><ul><li>Horizontal BPO, accounting for more than 80 per cent of Indian BPO exports, represents the larger and relatively more established set of services being delivered from India </li></ul><ul><li>Other aspects of Indian BPO, besides the growing breadth and depth of the service portfolio, that reflect its increasing maturity include the increasing global delivery footprint and continuous emphasis on enhancing service delivery efficiency and productivity. </li></ul>
    22. 25. HARDWARE MARKET <ul><li>Despite the declining trends in pricing observed across key categories, increasing volumes have ensured that the domestic hardware revenue aggregate continues to grow. While hardware exports remained steady, domestic hardware segment remains the largest segment to grow at 17 per cent in INR terms during FY 2009. </li></ul><ul><li>PC adoption is growing at more than 30 per cent incase of SMBs </li></ul>
    23. 26. INDIAN’S IT-BPO VALUE PROPOSITION <ul><li>Strong fundamentals , a robust enabling environment, and enhanced value delivery capability are the hallmarks of the Indian IT-BPO industry. </li></ul><ul><li>India enjoys a cost advantage of around 60-70 per cent as compared to source markets. Additional productivity improvements and the development of tier 2/3 cities as future delivery centres, is expected to enhance India’s cost competitiveness. </li></ul><ul><li>Timely government policies and increased public-private participation have played a key role in developing an enabling business environment for the Indian IT-BPO industry. The Government’s focus on education has helped create the large talent base from where the industry draws its workforce. The Government’s proactive approach towards the IT-BPO industry was further highlighted in 2008 through actions such as the IT Act Amendment, extension of tax incentives by a year, removal of the SEZ Act anomalies and the introduction of progressive telecom policies that focus on work from home. </li></ul><ul><li>Indian companies are now trying to adopt a culture that encourages innovation, embrace new trends such as Green IT , and deliver solutions that are focused on re-engineering and transformation. India is emerging as a leading Innovation hub with increasing number of patents being filed and granted from India </li></ul><ul><li>The silver lining of the economic downturn is the opportunity for the industry to enhance its overall efficiency . Companies are increasingly looking inwards and focusing on process benchmarking, enhanced utilization of infrastructure and talent, increasing productivity and greater customer engagement. </li></ul>
    24. 27. FUTURE OUTLOOK <ul><li>Despite the unprecedented economic downturn the industry will witness sustainable growth </li></ul><ul><li>The global technology related spending is expected to grow from 2010 onwards led by growth in outsourcing adoption. </li></ul><ul><li>Greater focus on cost and operational efficiencies in the recessionary environment is expected to enhance global sourcing </li></ul><ul><li>India Inc would remain focused on tactical measures to achieve cost savings and greater productivity </li></ul><ul><li>Services and software segments are estimated to cross USD 1.2 trillion by 2012. This is more than the 5.2 per cent growth expected in the total IT spending </li></ul><ul><li>The huge potential for global sourcing is further highlighted by an addressable market size of USD 500 billion in 2008, which is more than five times bigger than the current market </li></ul><ul><li>The industry will continue to diversify in terms of geographies, verticals and service lines </li></ul><ul><li>SMBs are expected to emerge as a significant opportunity due to lower IT adoption currently </li></ul><ul><li>Lack of working age population in the developed economies and a significant long term cost arbitrage indicates India’s sustained cost competitiveness  </li></ul><ul><li>Service providers are expected to enhance focus to domestic market to de-risk business and tap into the local growth opportunities </li></ul>
    25. 28. Electronics & IT Industry The production and growth trend of the Indian Electronics and IT industry since 2004-05 has been as follows:   SOURCE : DEPT OF ELECTRONICS AND IT INDUSTRY(annual report 2011) Year Production Growth ( Crore) (%) 2005-06 190,300 24.9 2006-07 244,000 28.3 2007-08 295,820 21.2 2008-09 372,450 25.9 2009-10 415,520 11.6 2010-11(Estimated) 470,090 13.1
    26. 29. Indian IT industry to hire 2.25 lakh in 2011: Deloitte <ul><li>MUMBAI: Indian IT industry will add over 2.25 lakh employees in 2011 and will clock revenues of USD 71.7 billion by the end of the year, consulting firm Deloitte has said. </li></ul><ul><li>Revenues from the information technology and business process outsourcing industry will reach USD 71.7 billion for 2011 and account for 5.8 per cent of the country's GDP, the firm said in its Technology, Media and Telecommunications Predictions for 2011. </li></ul><ul><li>The total number of employees working in the IT/ITeS (IT enabled services) sector will grow to 22.3 lakh this year, which translates into the addition of 2.26 lakh personnel, it said, adding that an additional 80 lakh people will get employment indirectly from the sector. </li></ul>PTI Mar 13, 2011, 02.45pm IST
    27. 30. Union Budget 2011: No extension to STPI <ul><li>NEW DELHI: The 2011-12 Budget has failed to bring cheer to the Indian IT sector as Finance Minister Pranab Mukherjee did not make any major announcements to boost the segment. </li></ul><ul><li>IT companies were batting for reduced tax rates and continuation of sops under the STPI to help the industry, which is seeing a recovery in demand after almost two years of slowdown. </li></ul><ul><li>&quot;I propose to increase the rate of Minimum Alternate Tax (MAT) from the current rate of 18 percent to 18.5 percent of book profits,&quot; Finance Minister Pranab Mukherjee said today during his presentation of the Budget 2011-12. </li></ul>PTI Feb 28, 2011, 04.21pm IST
    28. 31. TAX HOLIDAY END : 2011 <ul><li>The Budget has brought down curtains on the tax holiday of the Software Technology Parks of India (STPI) scheme, which will end by March 2011. Yet it continues to be business as usual for STPI and it continues to attract new units. There have been 88 new registrations in Maharashtra so far, and the number is likely to exceed 100 by the month end, STPI officials said. The number of new registrations was similar last year. “Either the industry is optimistic that they will get an extension or they want to continue with their growth plans. I seem to find no signs of change,” SK Agarwal, director of STPI Maharashtra, said. “I don’t think there should be much of an impact,” he added. </li></ul><ul><li>“ Companies are already paying taxes amounting to nearly 34%. Corporate taxes with educational cess come up to nearly 31%, there is also the service tax and minimum alternate... </li></ul>                                                    Sat, 13 Aug 2011Tue, 9 Aug 2011
    29. 32. NASSCOM <ul><li>Total revenue of the software and back-office outsourcing sector, including sales from the domestic market, is estimated to have risen to $60 billion in the financial year 2008/09. The sector, which accounts for five per cent of the country's gross domestic product, is projected to earn $175 billion in exports by 2020, according to study by NASSCOM and McKinsey. </li></ul>
    30. 33. AVENUES : 2011 <ul><li>Indian IT industry is expected to add 183,000 jobs in 2011, says the Ma Foi Randstad Employment Survey. </li></ul><ul><li>Another dampening factor is that there will not be any attractive compensation package for freshers as the wage bill hike across sectors for 2011 is pegged between 8.82 per cent and 12 per cent, it said. </li></ul><ul><li>According to the survey, around 1.6 million new jobs will be created in 2011 on the back of capacity expansion by companies. </li></ul><ul><li>650 companies across 13 industry sectors </li></ul><ul><li>As per the survey conducted amongst 650 companies across 13 industry sectors in eight major cities, the healthcare sector is expected to create 248,500 new jobs. 46 IT and ITES companies were part of the survey. Sectors like real estate, hospitality and manufacturing of non-machinery products together would create 223,400 new jobs. </li></ul><ul><li>&quot;The estimated wage bill hike across the sectors will be in the narrow band as most companies are under margin pressure,&quot; Ma Foi Randstad's managing director and CEO E.Balaji told reporters here </li></ul>Friday, April 01, 2011
    31. 36. ANY QUERIES…. THANKS

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