India was the second fastest growing major economy globally during 2009-10, even as US grappled with unemployment and the Eurozone slid into a crisis.
The Indian economy grew 7.4 per cent for 2009-10, with a better than expected growth of 8.6 per cent in the Jan-March quarter. This growth came on back of a drought last year, which hit agriculture.
Better still for the economy, growth for the coming year 2010-11 is being pegged at an even higher 8.5 per cent. Over the medium term, stronger economic growth would mean higher corporate profits, salary hikes and a buoyant stock market. On Monday, the Union finance minister, Mr Pranab Mukherjee, said that the growth momentum of the fourth quarter would continue with 8.5 per cent growth in FY11. “The growth numbers are pleasant but not really surprising, because we were expecting them to be robust which they have turned out to be. This clearly indicates the momentum which is there in the economy and the expectations that the 8.5-percentage points estimation for 2010-11 is going to be a clear possibility,” said the finance secretary, Mr Ashok Chawla. Other estimates on FY11 are more cautious, but still peg growth at over 8 per cent. The Prime Minister, Dr Manmohan Singh, had said last week that the government is targeting an overall growth of 10 per cent for the country. The recovery is evident in other areas as well. Corporate profits are already recovering with many of the major players beating expectations. Large companies, including IT majors, have also announced pay hikes in the past few months.
The strong growth could see a roll-back of the stimulus measures brought out to combat the slowdown. The government had already cut back some of these sops during the budget. Another possibility going ahead is an interest rate hike by the RBI, to rein in inflation.
Showing posts with label IT. Show all posts
Showing posts with label IT. Show all posts
Tuesday, June 1, 2010
Tuesday, February 2, 2010
IT majors to go on a hiring spree
With improving business sentiment and revival in IT spends, hiring seems to be back in full swing at software firms like Infosys and TCS.
While the country’s largest IT firm, Tata Consultancy Services (TCS) has made gross additions of over 21,000 people till the third quarter (Q3) of financial year 2009-10, Infosys plans to hire 24,000 in 2010-11.
“We have made gross additions of over 21,000 people, including subsidiaries till Q3 FY 2010. With utilizations at optimum levels (81.1 per cent, excluding trainees), we will look at aggressive hiring in the current quarter to match our talent needs with the business demand,” TCS vice-president and head (global HR) Ajoy Mukherjee told PTI.
In Q3 of FY 2010, TCS had made 7,692 net additions, compared with a net addition of 320 in the previous quarter.
According to Monster.com India MD Sanjay Modi hiring has gained momentum as forecasted. “Within Monster, in December 2009, we saw 33 per cent growth in job postings over November and 90 per cent compared to May in the software, hardware and EDP category,” Mr. Modi told PTI
With enhanced focus on domestic market, IT firms have got back to the hiring spree.
“Infosys will be hiring 6,000 people in Q4 FY 2010. Of these, 1,500-2,000 will be lateral hires. With this, the total gross hiring in FY 2010 will be 24,000,” an Infosys spokesperson said.
While the country’s largest IT firm, Tata Consultancy Services (TCS) has made gross additions of over 21,000 people till the third quarter (Q3) of financial year 2009-10, Infosys plans to hire 24,000 in 2010-11.
“We have made gross additions of over 21,000 people, including subsidiaries till Q3 FY 2010. With utilizations at optimum levels (81.1 per cent, excluding trainees), we will look at aggressive hiring in the current quarter to match our talent needs with the business demand,” TCS vice-president and head (global HR) Ajoy Mukherjee told PTI.
In Q3 of FY 2010, TCS had made 7,692 net additions, compared with a net addition of 320 in the previous quarter.
According to Monster.com India MD Sanjay Modi hiring has gained momentum as forecasted. “Within Monster, in December 2009, we saw 33 per cent growth in job postings over November and 90 per cent compared to May in the software, hardware and EDP category,” Mr. Modi told PTI
With enhanced focus on domestic market, IT firms have got back to the hiring spree.
“Infosys will be hiring 6,000 people in Q4 FY 2010. Of these, 1,500-2,000 will be lateral hires. With this, the total gross hiring in FY 2010 will be 24,000,” an Infosys spokesperson said.
Friday, January 29, 2010
It is cheaper to offshore jobs
The U.S. President Barack Obama, on Thursday, said that he would end tax breaks to American firms that shipped jobs out of the country.
Will India, which is known as the world’s back-office, suffer the most by this move?
According to software services industry body Nasscom, the IT sector accounts for 5.8 per cent of India’s gross domestic product in 2008-09, up from 1.2 per cent in 1997-98.
Though the objective of the move is to arrest the flow of jobs out of America, industry sources aren’t quite sure if the move will have the desired impact? If the U.S. Government disallows offshoring costs as expenses in the books of the U.S. companies, it will increase the cost of offshoring by 35 to 40 per cent for the U.S. firms.
Cost competitiveness
The on-site or onshore cost of a starting level engineer in an IT company is about $50 to 60 an hour. The correspondent cost for the same job if done offshore either in India or China works out to around $25-30 an hour. Assuming that the U.S. Government actually disallows offshore payments as expenses, then the cost of offshoring will go up. Industry experts estimate that the offshoring cost in that event could go up to $35-45. Still it is cheaper for the U.S. companies to offshore jobs to locations such as India or China.
Industry sources aver that the move could at best result in stoppage of fresh flow of transitional works from the U.S. into India and other countries which do offshoring. However, they are of the view that it will not result in any pull-back of jobs already shipped out of the U.S. Nevertheless, they agreed that the move could trigger some hard bargaining by the U.S. companies to hammer down offshoring prices, which could impact the top line and bottomline of IT companies in India and China which are America-centric in their businesses. Industry observers predict that Obama’s move may prod the Indian IT firms to look beyond the U.S. and explore business opportunities in Europe and elsewhere.
Commercial decisions
According to Ameet Nivsarker, Vice-President of Nasscom, the move is all about the American companies which have set up their outfits in lower tax areas and booking profits. In any case, the tax difference between India and the U.S. is very minimal. According to Chief Financial Officer of Hinduja Gobal Solutions Ltd., Anand Vora, “companies outsourcing are doing it based on financial implications and cost structures. The decisions are commercial and based on economic implications.”
Will India, which is known as the world’s back-office, suffer the most by this move?
According to software services industry body Nasscom, the IT sector accounts for 5.8 per cent of India’s gross domestic product in 2008-09, up from 1.2 per cent in 1997-98.
Though the objective of the move is to arrest the flow of jobs out of America, industry sources aren’t quite sure if the move will have the desired impact? If the U.S. Government disallows offshoring costs as expenses in the books of the U.S. companies, it will increase the cost of offshoring by 35 to 40 per cent for the U.S. firms.
Cost competitiveness
The on-site or onshore cost of a starting level engineer in an IT company is about $50 to 60 an hour. The correspondent cost for the same job if done offshore either in India or China works out to around $25-30 an hour. Assuming that the U.S. Government actually disallows offshore payments as expenses, then the cost of offshoring will go up. Industry experts estimate that the offshoring cost in that event could go up to $35-45. Still it is cheaper for the U.S. companies to offshore jobs to locations such as India or China.
Industry sources aver that the move could at best result in stoppage of fresh flow of transitional works from the U.S. into India and other countries which do offshoring. However, they are of the view that it will not result in any pull-back of jobs already shipped out of the U.S. Nevertheless, they agreed that the move could trigger some hard bargaining by the U.S. companies to hammer down offshoring prices, which could impact the top line and bottomline of IT companies in India and China which are America-centric in their businesses. Industry observers predict that Obama’s move may prod the Indian IT firms to look beyond the U.S. and explore business opportunities in Europe and elsewhere.
Commercial decisions
According to Ameet Nivsarker, Vice-President of Nasscom, the move is all about the American companies which have set up their outfits in lower tax areas and booking profits. In any case, the tax difference between India and the U.S. is very minimal. According to Chief Financial Officer of Hinduja Gobal Solutions Ltd., Anand Vora, “companies outsourcing are doing it based on financial implications and cost structures. The decisions are commercial and based on economic implications.”
