IT cos jittery on sluggish US growth, EU debt crisis: Assocham

New Delhi, Sept 28 (PTI) Major IT and BPO companies in the country are jittery amid fears of another economic slump in the US and a debt crisis in Europe, according to industry body Assocham. About 55 per cent respondents said that while the sector is unfazed from S&P's downgrade of the US credit rating and that the slowdown is temporary, it would surely hamper the hiring activity across the sector. Downgrade of US debt rating and debt crisis in Euro zone will impact recruitments in the Indian IT sector and hiring is expected to go down by about 30 per cent during the course of next few months, Assocham Secretary General D S Rawat said. The downgrade by credit ratings agency Standard & Poor's in August had triggered concerns that the USD 60 billion software services industry - which gets more than 60 per cent revenues from the US market - would be hit. IT industry body Nasscom, along with top players, had however, exuded confidence that the sector will sail through the crisis. Assocham interacted with about 140 representatives, directors, CEOs, CFOs, Chairmen and MDs of companies offering IT/ITes and BPO, BTO, KPO services in various domains like pharmaceuticals, Banking, Financial Services and Insurance, auto, FMCG and manufacturing. The study was carried out across Ahmedabad, Bangalore, Chandigarh, Chennai, National Capital Region (Gurgaon and Noida), Hyderabad and Pune. The US and Europe account for over 80 per cent of India's USD 60 billion IT industry and macro-economic uncertainty in these parts of the world are bound to make the market gloomy, Rawat said. About 25 per cent of respondents said the current round of global economic crisis won't have much of an impact on India, considering the strong domestic demand of goods and services together with their exposure to other avenues like Asia-Pacific and other parts of the world.
Nearly 20 per cent of the respondents said Indian firms may report sluggish business during the course of next few months due to the slowdown. Besides, the industry is already reeling under high interest costs, high inflation and the stock market is also in a sombre mood, the study added. Apart from slowdown in foreign direct investment (FDI), growth in exports and domestic private consumption might also slump, Rawat said.