Friday, July 30, 2010

BPO, ITeS industry could grow to $225 billion by 2020

The time has come for the BPO and ITeS industry to increase its presence in tier-II and tier-III locations as the industry is poised to reach a size of $225 billion in 2020. The industry expects 40% growth from tier-II and tier-III cities, said Som Mittal, president, Nasscom at a media briefing during the Nasscom HR summit.

"Last year we have conducted a granular study in association with AT Kearney in identifying the next 43 locations for IT-BPO penetration as the 60% of the BPO growth is happening only in the 7 major cities in the country. The growth of key infrastructure like airports and roads are welcome signs in such places," he said.

As the offshoring customers are now becoming location agnostic, the building of BPO and ITeS delivery centres in non-major cities would progress at a much higher pace, he added. Mittal released a study on the job potential of the BPO and ITeS industry and stated that by 2020 the industry would be employing about 10 million people directly that in turn would provide 20 million indirect jobs.

The contribution of IT-BPO industry to organised sector employment has jumped from 5% in 2000-01 to 15% in 2005-06 with 58% of the workforce hailing from tier II and tier III cities. Interestingly, 56% employees are chief bread winners. On gender inclusivity, 37% of the workforce are women with 26% of them found to be the chief wage earners.

Tuesday, July 27, 2010

The other India growth story: rising donations

It isn't only global manufacturers who are enthused about India's impressive growth story. The country's fast growing gross domestic product and the burgeoning middle class, with rising disposable incomes, has an unusual player excited - the global non-government, non-profit organisations, or NGOs, as they are popularly known.

"India's fast economic growth makes it an attractive market for fund-raising," says Samit Aich, Executive Director, Greenpeace India. "We are roping in more and more activists, fundraisers and donors to expand our presence here."

Like Greenpeace, many global NGOs, such as Oxfam, Save The Children, Care and ActionAid, have begun their fund-raising programme in India recently though many of these organisations have been present here for more than four to six decades. Most of these organisations did not even have an India office till recently and operated here as the offshoot of their global parent.

They have begun setting up offices in the past two years because Indian regulations do not allow entities not registered in India to raise funds locally. Save The Children, a leading global not-for-profit body working for underprivileged children, for instance, has had ties with India since 1920s. It was, however, in 2008 that it set up its India office and only in May this year that India was accorded the status of a "strong" member in its global alliance.

"A pre-requisite for being a strong member is to raise funds of a certain level and have a certain number of dedicated donors," says Thomas Chandy, CEO, Save The Children. Chandy, who has earlier worked with companies such as Coca-Cola, says he currently has 50,000 donors and "we are adding 6,000 more every month".

This, indeed, is getting reflected in the agency's income. While in 2009-10, the funds grew 46 per cent to Rs 60 crore against the previous year, this year, Chandy hopes the income to grow 50 per cent to Rs 90 crore. "Everybody wants to tap into the 'happy story' unfolding in India," says Chandy.

Greenpeace, the organisation fighting for the cause of environment and climate change, has more than 100,000 Indian donors, who contributed around Rs 12-13 crore to its funds last year, and Aich hopes the income to rise at least 25-30 per cent this year. "In the past three months or so, we have been generating around Rs 1 crore a month."

Citing another reason for the shift in approach towards India, Nisha Agarwal, CEO, Oxfam India, says: "After the global economic crisis, fund-raising in the developed world has slowed a bit. Organisations are looking for newer avenues. India, with its growing affluence and influence, makes a natural choice." Oxfam has been present in India since the 50s. The India office, however, was set up only in September 2008. It currently has 30,000 donors and had a budget of Rs 90 crore in 2009-10. According to Oxfam India, 10 per cent of this was raised in India and they hope that this kitty to grow further this year.

Humanitarian agency Care, on the other hand, has had a registered office in India since 1950. However, even Care, according to Communications Manager Amelia Andrews Daniels, began "resource mobilisation programme as recently as a week ago". "We will have figures on our India budget to share next year," she has said.

Some industry insiders, however, say Indians still like to donate for traditional causes and do not easily dish out money for efforts they cannot relate with. "Philanthropic giving in India is an old tradition. Indians have traditionally been donating to religious places and causes and to several social causes such as setting up hospitals or dispensaries or giving money to the poor. Even now, more than 95 per cent of philanthropic charities go to programmes focused on these issues. The only difference is raising such funds is becoming more organised now," says Ravi Singh, CEO, World Wildlife Fund India.

Indians, he adds, still do not easily give money for activities such as conservation of animals. "Of the Rs 18 crore budget we had last year, a very small amount was raised in India," Singh says.

Tuesday, July 13, 2010

Infosys Q1 net falls 2.6 pct, lags forecast

Infosys Technologies Ltd, India's No. 2 software services exporter, lagged market estimates with a surprise 2.6 percent drop in quarterly profit as the European debt crisis and salary increases took shine off improving U.S. demand.

The Nasdaq-listed firm announced today that net profit in its fiscal first quarter ended June 30 fell to 14.9 billion rupees ($318 million).

A Reuters poll of brokerages had forecast a profit of 15.56 billion rupees for Bangalore-headquartered Infosys, which counts Goldman Sachs, BT Group and BP among its main clients.

Infosys, larger rival Tata Consultancy Services and third-ranked Wipro have all stepped up hiring and raised salaries as demand for outsourcing grows in an improving global economy.

But a debt crisis in Europe, the second-largest market for Indian outsourcers after the United States, has clouded the demand outlook from the continent, while a weaker euro crimps margins for the export-driven companies.

Infosys shares, valued at about $35 billion, hit a record high yesterday and are up 11 percent this year, outpacing the 7 percent rise in the sector index

Saturday, July 10, 2010

Economists see U.S. recovery weakening - survey

The U.S. economy will lose steam as the year progresses but will not slide back into recession, even though unemployment is unlikely to fall significantly, according to a survey released on today.

The Blue Chip Economic Indicators survey of private forecasters found analysts increasingly glum about the outlook. They now see the economy expanding just 3.1 percent in 2010, down from 3.3 percent in the June poll.

They do not, however, envisage a renewed period of contraction, which has been widely debated in financial markets in recent weeks.

"Our panellists think talk of a double-dip recession is overblown absent a new, major shock," the group said in its report.

Some analysts worry such a disruption might come from Europe, where concerns about high debt levels have made the banking sector jittery about lending.

The report's findings highlight the risks of a sputtering recovery amid lingering softness in housing, suggesting the unemployment rate will end the year at 9.4 percent, barely down from the current 9.5 percent rate.

"For a second straight month the number of panellists that lowered their forecasts of nominal GDP growth and inflation exceeded those that raised their forecasts by a significant margin," the report said.

"In the past, such a development has often suggested further erosion in consensus forecasts during subsequent survey."

Along with more moderate growth, inflation is expected to remain extremely tame. Forecasters are looking for a 0.9 percent increase in prices for 2010 as a whole, the smallest rise since 1950.