Nasscom India Strategy Summit 2005: Opportunity knocking at the country's door
Bangalore: The Nasscom India Strategy Summit 2005 has summarized that it is time to act in a faster and more rational manner, if the Indian IT industry is to grow faster to reach the US$60bn mark in exports from the present US$17bn in just another five years.

India is already the leader in IT services and BPO off-shoring with a 65 per cent share in global IT services and 46 per cent share in BPO. But the real challenge is how to sustain and improve upon these achievements. In the past six years India has been able to build a virtual platform on which the IT industry can grow.

"This virtual platform has been established, tested and made scalable," said Ramalinga Raju, founder and chairman, Satyam Computer Services. "The need of the hour is to use it effectively to meet the target."

Raju said, the two enabling factors that will help the Indian IT industry to reach the target is its software and hardware infrastructure and its leadership position in IT services and BPO. Right now 28 per cent of the global pool of suitable professionals are employed in India as compared to China and Russia which have 11 per cent and 10 per cent respectively.

But there are seemingly insurmountable challenges in terms of infrastructure and talent requirement for the Indian IT sector. The Nasscom-McKinsey 2005 report highlights that the country may, by 2010, fall short of five lakh people in terms of required workforce for the IT sector.

Presently, the total strength of people employed in the IT sector in India is seven lakh and by 2010, according to the report, it needs to add another 1.6 million suitable professionals.

The main reason for the expected shortage is the lack of suitable talent required for the industry. India generates 2.5 million graduates every year, of which only 10 per cent are fit for jobs in BPOs. Only 25 per cent of the 3.5 lakh diploma holders or graduates who come out of the colleges are able to fit into the IT services area.

Another challenge for the country is the need for integrated infrastructure development. The Nasscom McKinsey report has suggested that to reach the coveted $60 billion mark and remain an ideal destination for offshoring India needs to have 10-12 cyber cities - five based on the Gurgaon model and the rest based on Pune model.

The report says that these cities must be closer to the tier II cities, not be more than one hour of commuting time. They must have airports and expressways and operate as integrated satellite townships fully funded through public-private partnership.
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CII unhappy with power sector performance
New Delhi: The Confedaration of Indian Industries (CII) has termed progress in the power sector as unsatisfactory, compared to sectors like telecom and IT, and has welcomed the setting up of the Energy Cooordination Committee under the prime minister to enhance coordination between different energy-related ministries.

"The constitution of the Energy Coordination Committee (ECC) headed by the Prime Minister and Energy Implementation Committee (EIC) headed by Cabinet Secretary has been a remarkable achievement," CII said in a release. Setting up of the ECC and EIC would help and enable the energy sector to work in cohesion and resolve issues amicably and within noticeable timeframes, it added.

India is facing a shortage of fuels such as coal and gas. Almost 2,000 MW power capacity in the country, involving investments of Rs 8,000 crore is at cross-roads due to unavailability of gas, it said.
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New telephony regulations to come in force
New Delhi: The government has notified new National Long Distance (NLD) and International Long Distance (ILD) norms and has decided to do away with the existing Internet Protocol-II (IP-II) and Internet Protocol Virtual Private Network (IPVPN) licences.

The new norms will lead to further reduction of telecom tariffs in the country, and will intensify competition in the sector and also allow smaller players to enter the market, according to an official in the department of telecommunications.

According to the new guidelines for NLD licences, the entry fee has been slashed to Rs2.5 crore from the existing Rs100 crore, while the annual licence fee has been cut to 6 per cent of the adjusted gross revenue (AGR) from 15 per cent at present.

Besides, the mandatory rollout obligations have been removed.

For the ILD sector, the entry fee has been reduced to Rs2.5 crore from Rs25 crore at present. The reduction in revenue share, networth requirement and paid-up capital is similar to that for the NLD licence.

Here too, the rollout obligations have been removed and ILD service providers have also been permitted to access subscribers directly with regard to leased circuits closed user groups.

Additionally, for both ILD and NLD, prior experience in the telecom sector is no longer a prerequisite for being granted telecom service licences.

The guidelines will come into effect on January 1, 2006.
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