The Positive Impact Of Western Economies on Indian IT: Taking the Growth Story Further
The Positive Impact Of Western Economies on Indian IT: Taking the Growth Story Further
As recent results of major information technology companies have been released in 2014, it has become apparent that our nation’s IT sector continues to grow by leaps and bounds. A new factor in this equation has been the revival of the Western economies. This new development in the IT sector has a number of implications for the future of India’s growth and economic progress. Leading IT companies such as Infosys, TCS, Wipro and HCL Technologies have posted good profits in their recent disclosures for their fourth quarter and full year earnings. While TCS experienced a sales growth of 31% in the fourth quarter, Wipro reached around 21.3%. Net profit growth for HCL was a healthy 59%. Around 25% growth in net profits was achieved by Infosys. The information technology sector in India is experiencing a surge in growth in recent times. The IT sector has also contributed to the growth and development of India in past years.
Leading IT firms have established superior infrastructure and spurred growth in previously underdeveloped regions. India has become the centre for growth and a leader in the field of IT due to their efforts. As the major European economies look well on the way to recovery and the US as well as the UK experiences a revival, Indian IT has benefited from this global trend. Indian IT firms are now tapping the global market which is rapidly expanding. There is a huge demand for infrastructure as well as software technology in these countries.
Indian IT companies are also venturing into new markets in regions such as Latin America and Asia Pacific nations. The massive jump in social mobility and cloud as well as analytics space (SMAC) has spurred the further progress of India’s IT firms. The Indian IT industry is looking to capitalize on factors such as cheap and well qualified manpower available in India as well as IT friendly policies to bring about a growth surge. This has the potential to impact India’s growth story in a positive way.
India’s economic state in the current times is not healthy. Leading corporate bodies such as ASSOCHAM have indicated that there is need for bold reforms on the part of the new government to bring the Indian economy back on track. However, the IMF is bullish about India’s economic growth. It expects our growth to reach 5.5% in the current fiscal and 6.25% in the coming fiscal. Our favourable demographics are the reason for this. However, the IT sector can also play a massive role in the recovery process. Boosting sales and profits is likely to spur further growth in this sector.
So far, jobless growth has been a massive concern. But the capacity of the information technology sector to generate jobs is yet untapped. India’s IT firms continue to grow in size and market reach. IT outsourcing in particular has the capability to generate a huge number of jobs to absorb India’s large and growing workforce. Currently, India is still being evaluated for its growth potential by the international community. Our information technology companies are world leaders when it comes to software technology. India’s IT workers are known for their superior skills and knowledge. Leading institutions such as IITs and IIMs are churning out a capable workforce for contributing to the growth and development of this industry. Many engineering graduates are opting for interesting IT start-ups to capitalize on the wave of entrepreneurism.
But the good news about western economies driving growth in India’s IT sector is perhaps the most positive sign for India’s growth story. The biggest plus for India so far has been its demographic dividend. If key sectors in the Indian economy such as information technology experience record growth, this can translate into healthy returns for the Indian economy.
Indian IT giants have also realized the importance of digital infrastructure. TCS has indicated that digital alone presents a $5 billion opportunity in the coming years. Going digital will be the biggest plus for IT firms in the coming months. If all goes well, the IT industry may well surpass the 13 percent growth rate suggested by NASSCOM in 2015. Going digital to face global challenges can be a growth driver for the IT industry. Whether the captains of India’s leading information technology companies are able to fulfil this goal is an important part of the Indian growth story puzzle.
