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Has Y2K Bugged Indian Software Exports?

May 22, 2000

By Kingshuk Nag -- TIMES OF INDIA

AHMEDABAD: Is the rate of growth of software exports falling ? Some analysts have the raised this issue in view of the fact that the usually very efficient Nasscom has failed as yet to come up with aggregate figures of software exports for 1999-2000. It is being argued that Nasscom has deliberately not come out with the figures because they are not all that rosy.

At a time when the software sector has been overhyped, these analysts say that the release of the actual export figures will be a dampener and hence the reluctance on the part of Nasscom.

And why have software exports not grown as per expectations ? Analysts say that this is because of the Y2K effect. As we passed on to 2000 AD without a whimper, all Y2K work on which Indian software companies made their fortunes also came to an end. Software exports which were at Rs 10,940 crore ($ 2.65 billion) in 1998-99, were slated to grow to Rs 17,300 crore ($ 3.9 billion) in 1999-2000.

Nasscom president Dewang Mehta, of course pooh-poohs all this talk. "This is balderdash. The figures for software exports are being compiled. They will be available shortly," he says. "As far as software exports are concerned the scene is very good," he asserts.

To prove his point, Mehta says: "Germany wants 20,000 software professionals, Japan wants 10,000, Clinton wants a relook at the number of visas for professionals into his country. What does this mean ? That demand for software professionals is growing and this is because the sector is expanding fast."

Vice president of Manufacturers' Association of Information Technology (MAIT) Vinay Deshpande seems to be in agreement. "There is no doubt that software exports will continue to grow rapidly, though I think that action will be seen more in the telecom area," he says. But at the same time, Deshpande feels that there could have had an impact on software exports in 1999-2000. "The rate of growth could have fallen due to the Y2K backlash, but this is an aberration," he says.

Wipro's corporate treasurer J Shankar who analyses corporate results closely has a different way of looking at things. "All the big software companies are growing at 35-45 per cent. There has been no spurt in growth. Such a thing could have been expected, because as the d-day for Y2K approached companies held back orders waiting for the danger period to get over. But the orders have not increased," he says.

So what is the bottom line ? Well, it seems that Y2K could have hit IT companies temporarily, but over the next years the prospects are quite rosy. This is not the least because of new IT business like e-business coming up and the addition of newer and newer companies in the sector who are also going to be active in the area of exports. This in addition to existing players who are going to grow at anything between 30-50 per cent annually. Then why bother about the Y2K bug ?

For comments and feedback send Email) Bennett, Coleman & Co. Ltd. 2000. http://www.timesofindia.com/220500/22busi19.htm

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-- (Dee360Degree@aol.com), May 23, 2000