IT Sector Poised For Major Leap
Indian software industry is expected to earn revenue of Rs.
60,000 crores ($13 billion) in 2001-02, according to a
report of Indian Software and Services Companies (Nasscom).
Of this, about Rs. 44,000 crores ($9.5 billion) would be
generated by software exports and Rs. 16,000 crores ($3.5
billion) from the domestic market.
According to estimates, I T exports will touch $14 billion
and domestic market $5 billion, giving a total of $19
billion in 2002-03. Growth in these areas is expected to
go up to $50 billion and $37 billion respectively, earning
a total of $87 billion by 2007-08. During 2001-02, an
e-commerce solution alone is expected to generate Rs.
10,000 crores of revenue ($2.17 billion). Another
important segment is that of telecom software including
network solutions and solutions for wireless Internet.
In the domestic market, the emerging revenue in 2001-02 will
be generated from e-governance, e-banking and digital
Inflow of Venture Capital (VC) to dotcom companies has
thinned due to various reasons. The flow has taken a
diversion to software and emerging technologies. The
expected investment in this sector is expected to be Rs.
65,000 crores ($14.13 billion) in 2001-02 as compared to
Rs. 32,000 crores ($6.95 billion) in the current year.
in Oil Pool Account
Deficit in oil pool account has been a bane of Indian
economy. The latest estimate prepared by the Petroleum
Ministry says that the deficit in the oil pool account by
the end of the current financial year may be around Rs
10,000 crore as against the anticipation of Rs 12,000
crore. That is still a cold comfort for a cash- strapped
Government struggling to rebuild the earthquake-ravaged
The oil pool deficit was Rs 5,701 crore at the end of
1995-96, escalated to Rs 15,976 crore at the end of
1996-97 due to sharp rise in oil price in the
international market and
inability to revise the domestic price.
This deficit came down to Rs 14,156 crore at the end of
1997-98, primarily because of the hike in the domestic
prices of petroleum products in September 1997 when the
government initiated reforms in the oil sector.
The deficit further came down to Rs 3,408 crore at the end of
1998-99 when the government issued oil bonds in March 1998
and the international prices of oil declined sharply.
A strong and vibrant banking sector with a network of over
64,500 branches supports Indian economy. Besides, a number
of national and state level financial institutions, a
large number of domestic and foreign institutional
investors, investment funds, equipment leasing companies
and venture capitalists add vigour to Indian banking
In the recent years, Indian banking sector is undergoing an
existential crisis. In the pre-privatisation period Indian
banks were well ensconced in the financial sector. Then
came the catalyst, Banking Regulation Act of 1993, which
opened the floodgates for foreign banks.
Foreign banks are in the fray forcing their Indian
counterparts to adopt a customer-centric approach, ensure
no erosion in bottomlines due to Non-Performing Assets (NPAs),
falling interest rates, cash reserve ratios, undue
exposures, and maintaining adequate capital adequacy
Once the Voluntary Retirement Scheme (VRS) implemented,
Indian banks both private and public would see an exodus
of efficient ones to greener pastures. Drain of competent
heads would further compound the crisis.
The move to minimise overheads goaded several Indian banks to
engage in an affair with foreign banks. The recent mergers
are Times Bank with HDFC Bank, Bank of Madura with ICICI
Bank and now Global Trust Bank with UTI Bank