GST will provide opportunities in domestic market: Nasscom
Nasscom on Friday said the implementation of the GST will provide a huge opportunity to the country's IT sector, including the software product segment, as small and medium businesses in India are expected to spend more than $25 billion by 2020 to become digitally enabled.
"GST provides a big opportunity for the (IT) industry. For the small and medium businesses, the large part of the investment in IT will also be, in a sense, triggered by GST," the National Association of Software and Services Companies (Nasscom) said.
"The small and medium businesses sector in India is expected to spend more than $25 billion by 2020 to become digitally enabled. This will create an opportunity in the next three years," Nasscom President R. Chandrashekhar told reporters here.
He said the industry is expected to grow by 7-8 per cent in the current year in terms of revenue. "The global software product revenue was at $413 billion in the 2017 fiscal, and of this, India's share was only $7 billion, about 2 per cent of the global software product industry size," he said at the indsutry association's Product Conclave here.
According to Chandrashekhar, the domestic software product market stood at $4.8 billion and the year-on-year growth of the segment was 10.4 per cent.
Besides looking at the Goods and Services Tax (GST) as an opportunity, the industry has its own concerns over the new indirect tax regime.
"There are new concerns which have come up on account of GST, essentially linked to place of provisions of service rules and certain possible confusions that could arise from that. Other concern that we had was with regard to valuation and applicability of GST on internal supplies," Chandrashekhar said.
He also mentioed that some of these are getting addressed and the industry was trying to see how the GST could have the minimal impact on it in terms of additional compliance requirement.
Some additional compliance is inevitable after the roll-out of the GST. The association has already projected that in the long term perspective, the IT industry in India is expected to reach $350 billion by 2025, he said.
He said that software as a service is expected to grow at least three times in the next three to four years.
Speaking of the job losses in the industry, he said: "People often think within the industry, there is shrinking of jobs or there are jobs which have been lost from the industry. But, this is not true. It is a fact that the rate of increase of jobs has declined little bit in comparison with revenue. The growth of jobs is roughly half of the growth in revenue."
According to Chandrashekhar, the industry has identified skilling as the priority area for it. "We have identified 55 specific job roles and 155 new age skills. Companies and the association are taking initiative for skilling. Nearly, 1.5-2 million people in the industry have already received some form of training though it is not adequate. Additional 1.5-2 million people need to be skilled over the next 4-5 years," he said.
He also mentioned opportunities would come in the space of data analytics, data security and cloud technology.