State logs 23 pc IT growth

State logs 23 pc IT growth

Software exports break recession barrier to touch Rs 74,929 cr

The State logged an impressive Rs 74,929 crore ($17 billion) in total software exports for the 2008-09 fiscal. Despite the worldwide slump, the State’s sterling performance, which has bettered the national average, is indication that it rightfully holds numero uno status as the country’s silicon capital.

The State’s IT exports have registered a 23 per cent growth in rupee terms (21.5 per cent in dollar terms) over previous year’s exports of Rs 60,800 crore.  This includes contribution from IT and ITenabled Services Special Economic Zone (SEZ) units from the State.

Incidentally, the State, which has been clocking an average of 26-27 per cent growth annually for some years now, performed better overall in the country’s IT sector whose total software exports stood at US$50 billion (Rs 2,22,360 crore), registering a growth of 21 per cent.

Hardware exports from the State during the fiscal 2008-09, however, saw a drop at Rs 2,889 crore as against Rs 3,100 crore in the previous fiscal with the total approved EHTP units being 68.

Main reason

The main reason for Karnataka’s resounding growth in the IT sector, despite a recession that has adversely impacted on several global IT majors, has been the robust audited financials reflected by nearly 1,200 of 1,600 units that provided details for the Software Technology Park of India (STPI), Bangalore. During the reporting fiscal, the State saw as many 84 new software units added with a total committed investment of Rs 465 crore over a five-year period.

Among these are 35 foreign equity firms, two Indian majors and 47 SME units, taking the total of approved STP units to 2,085 and EHTP units to 68, as of March 31, 2009.

No impact

Flushed with the success, State IT & BT Minister Katta Subramanya Naidu said the global recession had not “at all” adversely impacted the IT sector. Providing details of the growth performance of past fiscals, Naidu pointed out that if in 2004-05 exports totalled Rs 27,000 crore, in 2005-06 it went up to Rs 37,600 crore.

Software export growth continued even in 2006-07 when it stood at Rs 48,000 crore, Naidu said.  The State had set a target of exports worth Rs 1,000 crore ($20 billion) for the current fiscal.

Exports performance

“The exports performance of the State’s IT industry, especially Bangalore, demonstrates that the sector has remained unaffected by the global meltdown and overall decline in IT spending overseas,” the minister said. What was more heartening, he said, was the fact that despite voluntary attrition and lay-offs in the BPO sector, employment in the software industry in the State increased by 34,000 to 554,000 in fiscal 2008-09.

Besides, Naidu said, companies that started operations in 2008-09 included Thomson Holdings, STMicro Electronics (Wireless), NF Wireless India, Herman Miller Furniture, Atos Origin India, FNF Business Process Outsourcing, First American and Tandberg Technology.
Software Technology Park of India Bangalore director R Rajalakshmi said while 350 operating units expanded operations, the licences of 138 operating units were renewed, emphasising investor confidence for setting up IT operations in Karnataka.

More than average

She said Karnataka’s contribution to software exports was 34 per cent more than the national average. Maharasthra was second at Rs 42,242 crore with Tamil Nadu third at Rs 36,681crore, followed by Andhra Pradesh with Rs 31,983 crore and the National Capital Region with Rs 25,816 crore, she added.

While a major contribution towards the State’s IT exports came from 13 units with over Rs 1,000 crore exports, 17 companies returned export figures between Rs 500 crore and Rs 1,000 crore, 116 units between Rs 100 crore and Rs 500 crore and 978 firms below Rs 100 crore.

Those in the first category included Accenture, Cisco, H-P Global Soft, IBM, Infosys, Intel, Mphasis, Orcale Financial Services, Oracle India, Satyam, TCS and Wipro. While the United States was still the major market, accounting for 60 per cent of exports, Europe was second with 24 per cent, Asia 6 per cent and the rest of the world 10 per cent.

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