R Chandrashekhar, President, NASSCOM, talks to Anoop Verma on the exciting and positive future of India’s IT sector. He also provides his views on the steps that must be taken to ensure speedy execution of eGovernance projects. Excerpts:
What is your view of the IT sector in India?
There can be difference in the performance of different companies, but overall the IT sector is doing well. The revenues of the industry had bottomed out in 2010. But even in 2010, the industry did not start contracting, only the growth rate came down. Now the prospects of the sector have seen lot of improvement. Last year NASSCOM had predicted that the industry would grow at 12% to 14%, and it actually grew at 13.2%.
This year we are predicting that the growth will be between 13% to 15%; this means that this year the growth will be a percentage point above the growth that we saw last year. This prediction is based on the projections of various companies about the position of the orders and contracts that they have from their major clients. If you look at the client side, then you find that economic situation in USA has improved and Europe’s economy has more or less stabilised. If you take all these trends into account, you realise that not only is the industry growing, the growth rate is slightly accelerating.
It is being reported that the IT industry is now hiring fewer people than earlier. Why is that so when the industry itself is seeing healthy growth?
Earlier when the industry grew by 15% the employment too grew by 15%, but that is no longer the case. That is no longer the case because of technology trends. What is happening is that if your industry grows by 15%, your employee growth is only 7%. You are actually able to get higher productivity out of people because now there is better technology available and more automation is possible. However, if you look at the trends then you see that now the industry is hiring in much higher numbers than in 2010. Only the hiring patterns have changed. Earlier a lot of hiring used to be done on the campus and many companies used to maintain a large bench strength. Now because of competitive pressures and changes in the nature of business, the companies are refraining from maintaining a large bench strength.
What steps can the government of India take to enable the Information Technology industry in the country to grow at a faster pace?
For higher growth there are many things that the industry needs to do, and there are the things that the government must do. One crucial area is that of the start-up community. Many bright youngsters are choosing not to go in for regular employment or even higher studies, they prefer to become entrepreneurs and develop innovative products and services. Such entrepreneurs are an asset to any country.
In countries like UK, Canada and Singapore there are special provisions to attract entrepreneurs from all over the world. In India, we have a situation where many new entrepreneurs are being constrained by the bottlenecks in the system. There are a plethora of problems that new businesses face in our country that they don’t face in many other countries. There is problem of regulatory compliance, financing, infrastructure, registration of Intellectual Property, etc. At times, a business has to be closed down, but it is not easy to do that in our country. The good thing is that the present government is aware of these problems and now attention is being given to creating an environment where companies can do their business easily.
Skilled human resource is one of the key requirements for software industry to flourish. What steps can be taken to ensure that adequate IT talent is available for our IT companies?
A formal education can provide a person with formal training, but for performing well the individual also needs to have certain skills that are specific to that industry. We need to accept that there will always be a gap between what is being taught in the educational institutions and what the industry may require. To a large extent this problem can be addressed, if we can ensure that our educational institutions have well trained facility and an up to date syllabus.
NASSCOM is taking several initiatives in the area of skills. Recently we launched the IT-ITeS Sector Skills Council NASSCOM (SSC NASSCOM), which strongly recommends that learning outcomes (based on National Occupational Standards) need to be introduced to country’s education system. If we can focus on certain key skills then that will lead to vast improvement in the employability of the Indian graduates. There is another initiative called National Skills Registry in which NASSCOM has partnered with the industry to create a national database of registered and verified knowledge workers in the industry.
As the former Secretary IT you have done lot of work in the eGovernance space. Why do so many eGovernance projects get mired by delays?
eGovernance has come a long way from where it was at the time when this whole journey started. Today all sections of the government recognise the importance of eGovernance and many of them have taken significant steps in its implementation. However, if you are considering the point where all government services are available online, then that is still very far. Many eGovernance projects face delays because of faulty procurement processes that the government has. The experience of many companies that have bid for eGovernance projects has not been positive.
The procurement processes of the government are not designed for procuring IT services, they are designed for procuring hardware or some equipment. When you are procuring hardware, you can clearly state the technological specifications concerning the processor, memory, hard disk, etc., but when you are procuring IT services you are describing services that many not exist today.
You are prescribing a standard which may or may not be achievable. So there has to be some amount of give and take during the execution of such complex IT services projects. It must be viewed as a partnership in which both sides collaborate for the achievement of the desired outcome. If the procurement processes for IT services can be reformed then we can see a quantum jump in the speed at which eGovernance projects can be implemented.
The new government is giving lot of thrust to eGovernance. What can NASSCOM do to promote eGovernance in the country?
NASSCOM is in touch with the government and we are making a case for enabling the private sector to participate more vigorously in eGovernance projects. But this can only happen when there is a re-look at the existing procurement policies and other issues. Private sector can be involved in execution as well as financing of the eGovernance projects. eGovernance should be a profit making project for the private companies, for the citizens and for the government. All three entities ought to profit. The thing that we loose or get rid of when we have eGovernance is the inefficiencies that we have in the system. There are more than 3 million people working in the IT sector in the country and in government we have only close to 10000 IT professionals, so it is a no-brainer that the private sector has to be involved in the execution of eGovernance projects. But the private sector can only come in when eGovernance projects make a business sense.
Even after the implementation of eGovernance in some departments we continue to have one or two manual steps. What is your view on this?
The general perception is that eGovernance is not being implemented to a sufficient degree. We have to see eGovernance projects from the perspective of citizens. If eGovernance has been implemented for certain service then that service should be available to the citizen electronically. The problem is that many of the eGovernance projects allow the citizens to use certain electronic facilities, but if you actually want to have the service then you have to go to the office with your documents. If there are 10 steps for availing any service and you have made 9 steps electronic, leaving last one to be manual, then you are still not offering eGovernance from the perspective of the citizen. He still has to come to the government office for finally availing the service.