Bangalore: Infosys Technologies vice-chairman Nandan M Nilekani on Monday admitted that the global economic meltdown has affected hiring in India's IT industry.
"The IT sector is not seeing job buoyancy now compared to earlier years due to global economic slowdown," Nilekani said at a function in the Institute for Social and Economic Change (ISEC) in Bangalore, the technology hub.
Delivering a lecture on 'India at the Crossroads: the Choices Before us', Nilekani said the IT industry was facing unprecedented crisis and it was difficult to predict how long the economic downturn would continue.
"The recruitment was well-placed earlier when the growth rate was 30 per cent in the IT sector. The crisis in the financial sector has automatically affected Indian IT firms," Nilekani said.
Though software exports grew to a whopping $40 billion in FY 2008 from a mere $50 million in 1991, with a compounded growth rate of 30 per cent over the last three-four years, the economic slowdown has reduced the growth to 20 per cent.
"The IT industry grew rapidly on the back of high global economy growth. But in the long-run the sector will do well. The need for technology the world over has not reduced and India too is a large consumer of the technology," Nilekani noted.
Referring to the various challenges the country was facing, the IT bellwether's top executive said there was a need to create 270 million jobs by 2035 to reap benefits of the demographic change.
"India has a large number of young people and jobs need to be created by integrating our economy with the global economy. The potential of the youth needs to be harnessed to accelerate the economic growth rate," he asserted.
Recalling the growth witnessed by developed economies such as Britain, Japan and the US before and after the World War II, Nilekani said India was young when the rest of the world was ageing.
Seeking devolution of more powers and funds to urban and rural local bodies, Nilekani lamented that the local bodies had been denied powers due to vested interests of some political leaders at the state and central levels.
"The poor have not benefited from food, power, farm, water and healthcare subsidies. Measures have to be taken to distribute entitlements directly to the targeted beneficiaries since the subsidies are regressive and not progressive," he added.
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