If corporate India is smiling at the decisive verdict given by the electorate, the IT and BPO industry is practically jumping up and down.
If corporate India is smiling at the decisive verdict given by the electorate, the IT and BPO industry is practically jumping up and down.
The industry has frequently found itself competing with coalition squabbles when trying to win the attention of the government towards fighting off challenges such as the rising protectionism in its markets abroad.
With UPA almost attaining majority by itself, industry leaders believe the government will have more time for the industry’s problems instead of being engrossed in putting out fires caused by coalition members.
“For the IT industry, uncertainty is over,” hoped Kris Gopalakrishnan, CEO of the second biggest Indian IT services firm, Infosys Technologies. “We expect the government to have a strong view on protectionism (from the West) and lobby against it and strongly drive home the point that such tendencies will only delay the recovery (of the global economy),” he added.
Others were more blunt. “I am very happy that some of the fringe elements have been thrown out,” said Pramod Bhasin, CEO of Genpact, the country’s largest independent BPO company, adding: “30-35 parties running a government was just too much.”
Bhasin pointed out that under the earlier situation, where even small parties were indispensable to the survival of the government, it was difficult to implement a common agenda and policy for the government as a whole. “We had different parties running different ministries almost independently, pushing their own agendas. This will make the public services more accountable,” he said.
“It’s historic, exciting!” said Raman Roy, the head of Quattro BPO. “Earlier, even if there was an agreement between the government and the industry, there were occasions when they would come back and say ‘Sorry, we can’t do it, our partners don’t agree to it.”
Besides giving its full attention to issues like countering protectionism, the industry hopes the government will also push through tax reforms, such as the simplification of service taxes.
“IT and BPO is a big feeder to the economy,” Roy said, “It has a multiplier effect. It employs lakhs of people and pays them well. They in turn spend that money on cars, furniture, they employ other people... This industry is now suffering and we hope the government will give us some tax incentives and continue with the ones already in place.”
Ganesh Natarajan, former chairman of IT body Nasscom, was even more optimistic, predicting that a more stable government would be able to make quicker decisions.
“I expect the government to announce an investment of at least $100 billion for the infrastructure sector. This would include creation of at least 40 more locations for IT on the lines of Bangalore or Pune and help the IT industry achieve its export target of $200 billion in 10 years.”
Natarajan added the government may look to extend the STPI benefits, due to end by December 2009.
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