Centre to form strategy group to help IT sector

Centre to form strategy group to address IT sector problems

With analysts anticipating that COVID-19 pandemic is likely to hit the IT sector severely,  the Centre has decided to constitute a strategy group to work out a roadmap for the sector and address the problems faced by it.

Union Telecom and IT Minister Ravi Shankar Prasad, who held a video conference with state Information Technology Ministers and officers on Tuesday, assured them that a strategy group comprising representatives from Central Government, State Governments and private sector would be formed to work out a roadmap for the Indian IT sector.

The same group can also give a road map to make the Indian electronics sector more robust, Minister said.

Around $97 billion worth Indian IT sector is one of the largest service exporters and helps the economy also by supporting over 40 lakh jobs if the IT-enabled services are also included.

However, the COVID-19 pandemic is likely to hit the sector hard as it is staring at a revenue growth sliding to a decadal low of up to 2%  and an impact on profitability due to the narrowing of margins.

The IT companies will lose out on new deals, which will compromise future revenues, and also face reverses on the exiting ones, which may be renegotiated as their overseas clients face difficulties due to the lockdowns, domestic rating agency Crisil said in the report.

Ravi Shankar Prasad also informed that India stands a good opportunity to promote electronics manufacturing and urged the states to work towards attracting investments in their states.

He also shared that three schemes namely Production Linked Incentive 2.0, Electronics Manufacturing Clusters, and Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors (SPECS) with a project outlay of Rs 50,000 crore have been notified by the Centre in order to attract investments in the electronics manufacturing sector. He appealed to States to supplement these with their schemes.