India's information technology industry is reeling under the global downturn and it is difficult to predict how long the crisis will last, according to Infosys Technologies co-chairman Nandan M Nilekani.

Delivering his keynote lecture at the Institute of Social and Economic Change (ISEC) in Bangalore, he said the IT sector was not seeing the job buoyancy that it witnessed in previous years.

"The Indian IT industry has grown from $50 million in 1991 to $40 billion today. In the last three-four years ... the compounded growth rate was 30 per cent and more; and now it is reduced to 20 per cent due to the economic slowdown," he said.

"We can still come out of the slump, as the need for technology and innovative solutions to tackle complex problems has assumed greater importance and urgency," he added.

Delivering the Dr V K R V Rao Memorial Lecture on "India at the crossroads: the choices before us" to celebrate Founders' Day at the institute, Nilekani said one of the challenges was to invest in human capital so as to leverage the country's "demographic dividend" of a large population.

One way to look at it is to aim at creating 270 million jobs by 2035. Otherwise there would be a large number of unemployed youngsters, leading to tension, he said.

Among other areas he stressed were local governance, education, labour laws and infrastructure. "Empowering local governance is another challenge. To deliver good governance, one needs a good local government. However, due to various political reasons, one is unable to bring about strong empowerment," he said.

Nilekani said there should be a positive approach towards energy. "It's impossible for India to build the sector as was done in the West, hence we need to think differently. We need to create a post-carbon energy model."

He also said there is a need to improve primary education, and reform higher education which is "in the doldrums".

Restructuring, but no layoffs
Speaking at another occasion in Bangalore, Infosys managing director and chief executive officer Kris Gopalakrishnan said that while layoffs were not on the cards, restructuring of the company to adapt to the current economic environment could make some jobs redundant.

"But that percentage is very low," he told reporters after delivering a 'power talk' to the students of the Great Lake Institute of Management. "Our employees have, of course, been assessed periodically based on their performance. With the business situation being challenging now, and client demands increasing, the performance thresholds are bound to go up," he said.

The company's bench utilisation has declined by about five percentage points from 80 per cent to 73-75 per cent. "So, we train our staff on two technological specialisations instead of one," Gopalakrishnan said.

The company recently announced that it would increase its training duration for employees from 16 weeks to 29 weeks. Gopalakrishnan added that there would be a real challenge in terms of finding trainers for the extended period.