Business & Economy Magazine IIPM News Edition: Over the last five years, the contribution of IT to India’s GDP has grown from 1.4% to 4.8%.

Thursday, October 18, 2007

Over the last five years, the contribution of IT to India’s GDP has grown from 1.4% to 4.8%.

of this growth has been contributed by the top five Indian IT companies viz. Infosys, Tata Consultancy Services, Satyam Computers, Wipro and HCL Tech; with all of them witnessing astronomical growth in income and profits. While Infosys has been in the news for succession moves (like Narayana Murthy stepping down and K. Gopalakrishnan taking on the position of CEO from Nandan Nilekani), Wipro has continued with its ‘String of Pearls’ strategy, acquiring diverse companies like Austria’s NewLogic, Portugal’s Enabler and Finland’s Saraware. On the other hand, HCL undertook its ‘Blue Ocean’ strategy with the company expecting 50% of its future business to come from various unexplored technology areas like aerospace and life sciences.

Even TCS has launched its ‘Experience Certainty’ drive – a global marketing campaign claiming that 96.63% of TCS deliverables are achieved on time. Satyam Computers has focussed on innovative HR practices, which have reduced its employee turnover rate from 21% to under 13%. While the growth story seems like a near-perfect scenario, there are certain factors that need immediate attention. Parag Shah, an analyst from Sharekhan, explains, “The rupee appreciation against the dollar has limited profit margins of IT companies. Another factor is the cap on the limit of H1B US visas. In the Clinton era, nearly 195,000 visas were issued, whereas in the Bush era, the cap has been reduced to 65,000.” However, with inflation down, and RBI coming in stronger, and even US industry bigwigs coming down hard on Bush, the going just might become too exciting!