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|August 15, 1997||
Y2K perks up Q1At a time when the government is scaling down the country's export targets, the software industry stands out with an impressive growth of 65 per cent in exports in the first quarter of financial 1997-98.
The year 2000 conversion projects have brought in a useful contribution. According to a study of the National Association of Software and Service Companies during April-June this year software exports grossed in revenues of Rs 13.6 billion up from Rs 8.2 billion in the corresponding quarter of the previous year.
Releasing the study, Nasscom executive director Dewang Mehta told reporters the year 2000 date conversion projects had has added to the growth rate of software exports from India. The country has already bagged over $700 million worth of orders in Y2K projects.
"Year 2000 conversion projects are being accorded high priority by managements around the world as they realise their competitiveness hinges on being able to successfully implement these solutions. We see an increasing number of Fortune 500 companies, especially from the US, Canada, Europe and Japan partnering with Indian software companies," Mehta said.
The offshore projects accounted for nearly 41 per cent of the software exports as per the Nasscom study. Over 525 high-speed datacom links are being currently used by the software industry in India as compared to three such links in 1992.
Besides exports, the domestic sector did well, registering a growth of 40 per cent. The industry at home grossed in revenues of Rs 6.4 billion in the first quarter of 1997-98 against Rs 4.6 billion in the same period last year.
Mehta attributed the growth to "Recognition of IT as a strategic asset, implementation of enterprise resource planning solutions directed towards increasing productivity, efficiency and enhancing output."
Spending in IT by financial institutions, banks, stock exchange, manufacturing and distribution systems helped trigger the awareness level of users.
Removal of minimum alternate tax on software exports helped the industry plough back profits into its expansion plans and research and development facilities.
Referring to the problem of working capital for the software industry, Mehta said Nasscom had made certain recommendations to the Reserve Bank of India.
Nasscom has said that individual banks should set up special groups to look into the financing activity of the software industry.
For working capital requirements the software companies can be required to submit a cash-flow statement showing the fund gap over a year and the banks should finance such gaps by means of working capital. Star-up software companies should be provided the concessions in the rate of interest as applicable to the small-scale industries, Mehta said.
- Compiled from the Indian media
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