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Struggling of an industry comes takes birth form over concentrated business exposure to a particular industry or segment. Well this might place many of the industry veterans under a severe jerk in the spinal cord. When an industry opens up its business growth projections it focuses on the most promising growing and lucrative product segment. But over the year the industry fails or rather remains blocked with it stupendous growth achieved in short time comparing to the growth rate of other industries. There are two big mistakes behind a falling industry

1) over exposure and

2) becoming blind to identify and create vale within other industry.

Indian IT industry is one of the biggest examples where my theory Industry development linked with economic development of India will get its shape. Indian IT industry mainly driven by companies like Tata Consultancy Services, Infosys, Wipro, are all focused aggressively on banking and financial services. Well that is the sector through which these companies become millionaire to Billionaire. But after the recent slowdown in the global economy after the recession of 2008 the double digit growth projections of the Indian IT industry just vaporized.

Well prior to vaporization of the growth I would like to accentuate on the blindness growth path travelled by the Indian IT industry. The Indian software industry has grown from a mere US $ 150 million in 1991-92 to a staggering US $ 5.7 billion (including over $4 billion worth of software exports) in 1999-2000.  No other Indian industry has performed so well against the global competition. India exports software and services to nearly 95 countries around the world. The share of North America (U.S. & Canada) in India’s software exports is about 61 per cent. Starting with an export of around $100 million and 5000 employees at the beginning of the 1990s, it has grown to exports of $70 billion and 2.8 million employees today, and a globally dominating industry too.

The above data is sufficient enough to increase the chest size of every Indian but this is now the biggest curse for the Indian IT industry which is struggling with its single digit growth. The blockage was created by the Indian IT industry itself. It focused aggressively on earning revenue through developing the IT industry of US, Europe and all those 95 countries. In reverse we got employment and dollar revenue but did we very develop the Indian IT structure. But I find the Indian IT industry earned more but did less for the economic development of India. Government of India created license for Software Technology Parks of India (STPI), and give a 20-year tax holiday to units in export-oriented special economic zones (SEZ) which has resulted to create billionaire like Infosys, TCS etc. Well growth was their but did that create economic value for India other than employment creation.

During that time did the Indian IT industry develop IT infrastructure for Indian healthcare, Banks, Automobiles etc. In fact for any industry of India did the Indian IT industry created the sense of requirement of Indian IT infrastructure. This is one of the main reasons why Indian talents failed to uplift the Indian economy as well grow the economy to a stable economy. Indian IT industry focused on these issues or rather focusing now when the revenue flow from the western world has dried up.

Well I am not criticizing any industry but what I am trying to push through the management minds that industrial growth strategies should be linked with economic growth of an economy. If an industry runs blind at the back of an revenue then at one point of time the industry not only suffers but also the shareholders, future prospects of expansion and more importantly the current state of the industry drowns away just like a flush. Over exposure of the Indian IT industry towards export created the most damaging phase of the current IT industry. Well growth of an industry can be lucratively presented but the crisis and struggle phase of the industry creates the long term sustainability of an economy.

Management should understand that when they link the business prospects of an industry with the economic growth of a country then profitability becomes printing machine. If industry links it growth with an economy then just imagine what we are deriving today we should have derived and enjoyed fruits of the same 10 years ago.

Shortfall in linking industry and economy leads to slow growth of an country.

Indraneel Sen Gupta

Master in Economics/MBA in International Business/ICAI(FINAL)/Pursuing Master in Journalisim


Published by

Indraneel Sen Gupta
(Vice President-Business Development,Research & Product IFAN Finserv Private Ltd.(SPA Group Company) )
Category Others   Report

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