The National Association of Software and Services Companies on Wednesday said India’s information technology services sector would grow slower than expected, at 8% to 10%, during the financial year ending March 2017. Cutting its earlier projected forecast of a 10% to 12% growth rate for the IT services sector, Nasscom said the industry would earn revenue between $116 billion and $118 billion (approximately between Rs 7.88 lakh crore and Rs 8.01 lakh crore), The Economic Times reported.
The factors taken into account to clash the growth rate included Britain’s decision to exit the European Union and the United States presidential elections, Nasscom said, according to Reuters. Slow growth in the banking and financial services sector and rising pricing pressures, along with the shift towards newer forms of managing businesses through cloud computing, were also responsible for the slowdown, the body said.
Nasscom President R Chandrashekhar said the situation will improve in the next two quarters as uncertainty caused by Brexit and Donald Trump’s election is expected to settle down. India’s share in the global sourcing market has also been increasing by one percentage point every year and currently stands at 56%, despite the factors affecting the IT industry, Chandrashekhar added.
Moreover, companies such as Infosys and Cognizant have cut their growth expectations for the current financial year. In October, a report by Kotak Institutional Equities had said that the Indian IT sector faced its worst second-quarter performance in eight years because of “broad-based” weaknesses in the banking, financial services and insurance industries as well as “weak healthcare and delays in projects across many clients”.