Kolkata, Feb 21: Revenue aggregate of IT and ITeS sector has grown ten-fold over the past decade but their roles in influencing wider economic and developmental impacts in the country has been relatively less explored, according to a study prepared by NASSCOM and CRISIL.
The report entitled 'The Rising Tide - Output and Employment Linkages of IT-ITES', which was released today, gives a detailed cross-sectional view of the multiplier effects on income generation and job creation induced by the Indian IT-ITES sector and quantifies the economic impact of their activity.
The findings of this study have reinforced earlier beliefs with quantified measures of the wider economic impacts of the growth of these sectors.
Commenting on the need to undertake this survey, Founder and Chairman of Satyam Computer Services and NASSCOM Chairman B Ramalinga Raju said, ''Indian economy has grown at over 8.5 per cent over the past four years. The rapid rise of the Indian IT sector has been widely recognised. But its impact on the economy has been explored for the first time perhaps in this study.'' This study has analysed and documented this impact, he added.
NASSCOM, premier trade body for IT sector, president Kiran Karnik further commented on the study's objective and findings, '' The survey has taken a detailed cross-sectional view of the multiplier effects on income generation and job creation induced by the Indian IT-ITES sector.'' The analysis has also been extended to assess the impact of two key concerns, continued wage inflation and the removal of the STP benefits on the sector's medium term performance.
''Factors like development of new satellite townships, rapid growth in social infrastructure, supported by the substantial disposable incomes amongst professionals employed and the relatively young demographic profile of the average IT-ITES professional have accentuated this impact,'' the report mentioned.
The younger generation is earning a high level of disposable income at a relatively younger age. This contributes to significant investment in creating support infrastructure and has induced high levels of consumption spending across the country.
'' This had resulted in generating substantial indirect employment and in creating additional income for a vast cross-section of society,'' Mr Karnik added.
CRISIL's Executive Director and Chief Economist Subir Gokarn said '' This study was an opportunity to put perceptions about the significant backward linkages of IT-ITES to test.'' CRISIL Principal Economist Dharmakirti Joshi said, "Apart from backward linkages with the sectors that feed into IT-ITES, the study found that consumption spending by IT-ITES employees, who on an average earn relatively higher incomes at younger ages, had a strong multiplier effect on the economy. This spending has given a boost to housing, transport, hospitality and entertainment and created employment there." CRISIL Limited, a Standard&Poor's Company, is India's leading Ratings, Research, Risk&Policy Advisory company.