The IT boom continues to yield strong growth figures for the industry. The software and ITeS exports from India are expected to exceed $31.3 billion during the year 2006-07, up by 32% compared to the previous year. Also, the software and ITeS sector’s contribution to the gross domestic product (GDP) is expected to rise to 5.4% in 2006-07, up from 4.8% in 2005-06.

The  exports to the US and UK make up 67% and 17% of the total exports, respectively. Banking, financial services and insurance and technology (high tech and telecom) are the main IT verticals accounting for nearly 60% of total exports. This is followed by manufacturing retail, media, utilities, healthcare and transportation that are rapidly growing verticals, says the report.

Over the last six years, India’s share in global sourcing is estimated to have grown from 62% to 65% for IT and from 39% to 45% for BPOs. The report attributes the fast growth of the IT-BPO segment to the leading demand for global sourcing and the evolving socio-political attitudes.

The domestic IT market also seems to be picking up. The report highlights that the total size of the domestic market is expected to cross Rs 37,800 crore in 2006-07, growing by 28% since 2005-06. Now, Indian firms are in neck-to-neck pace with the MNCs, says the report.

KEY FINDINGS OF THE NASSCOM ‘TRACKING OF THE IT ADOPTION STUDY 2006’

The 2006 Study, conducted among IT heads and senior IT managers from about 292 companies in India, across multiple verticals, showed that the growth of IT adoption was on an incline, with both large and SME companies buying more IT. The Study also indicated the following:

The highest average IT spending for 2006 was for the BFSI vertical followed by for the Energy and Utility segment. The rate of increase in the average spending in each of these verticals was expected to be in the range of 12-27 percent, making them the most likely highest spending sectors in 2007 as well.

The third sector which was projected to witness a considerable hike in its IT spend was the Tourism and Hospitality industry. The sector’s Rs. 18 crore of IT spend was projected to grow by 13 percent, placing it among the highest tech-spenders in India in 2007. 
Interestingly, one out of four companies in both large scale and medium scale organizations indicated that their IT budgets would increase by around 10-19 percent during the current year.

NASSCOM’s “Tracking of IT adoption study 2006” also revealed the following:

Business Continuity and Risk Mitigation were the key priority areas for CIOs
Increasing efficiency and process productivity was the business goal achieved through IT adoption in 2006.