Fourth year in a row, Information Technology (IT) and Information
Technology Enabled Services (ITES) grew at an astounding 33% netting USD
23.5 billion from exports and 31% domestic growth netting USD 29.6 billion.
The National Association of Software and Service Companies (Nasscom) had
projected a 26.3% growth to USD 60 billion by 2010. However, with the
growth rate much higher than earlier projection, that estimates should be
higher. However, it is not known if this sort of growth can be sustained.
Nasscom refused to up its estimate saying that the IT & ITES will grow at
28% next year.
In a refreshing note, the Federal Government is planning to set up two
Software Technology Parks (STPs) in the north eastern states to support the
ITES-Business Process Outsourcing (BPO) sector. This comes at a time when
the European Union Intelligence Unit (EIU) said that the cost of
outsourcing in India has grown significantly and the increased costs are
eating into the cost savings. They projected Central and Eastern Europe and
North Africa as alternate sites that could be used.
Since most of the ITES and BPO work has happened in major cities where the
real estate has mushroomed beyond recognition, the costs have been
increasing rapidly. However, the latest trend is to move the BPO companies
away to secondary tertiary cities to get a cost advantage. The major
disadvantage is infrastructure to support this move. Power, roads,
telephone lines, etc are unreliable at best beyond the major cities.