The National Association of Software and Services Companies NASSCOM said India's GDP is expected to grow at 8.5 per cent in the year 2022, in line with the estimates for the next year by the International Monetary Fund. India is projected to have a 9.5 per cent GDP growth this fiscal, according to the IMF.
The global GDP is expected to increase by 5.9 per cent in 2021, according to NASSCOM. The growth momentum is expected to continue with the global GDP growing by an estimated 4.9 per cent in 2022, according to the growth momentum.
Revenues grew by 4.5 per cent quarter-on-quarter q-o- q and 17.8 per cent year-on-year y-o-y, with digital and cloud remaining the major drivers. It said that growth in revenues across all major markets continued sequentially as well as y-o-y. Revenues from India bounced back this quarter, growing 8.1 per cent q-o-q, the report adds.
When it comes to sector-wise growth, all sectors continued to see growth sequentially as well as on a y-o-y basis. The manufacturing industry led in terms of sequential growth, while financial services, financial services and insurance maintained the lead on annual growth, while travel and hospitality showed a strong rebound, according to NASSCOM.
There were higher salary hikes, new hires, increased sub-contracting costs and travel and facility costs that led to the decline of the net margins. This quarter, y-o y margins also declined as talent availability continues to put pressure on hiring, retaining and sub-contracting costs. Talent availability is a challenge that companies continue to address on priority, as a result of increased attrition, it said.
The employee count increased 5.3 per cent q-o-q and was up 17.5 per cent y-o-y as hiring remained the key strategy to counter talent availability. As the demand environment remains healthy, companies plan to hire more staff in the next few months of 2021, NASSCOM said.
Attrition was uptrending this quarter, reaching 19.3 per cent, up from 17.5 per cent last quarter. The industry body said that the increase is due to the rising demand for new-age digital skills across industries. Companies are focusing on reskilling and upskilling their current workforce in response to this trend and continue to increase their hiring.
A recent EY India report stated that India's goal of becoming a $5 trillion economy may have to wait until 2029 -- 30 in a worst-case scenario. The trend growth rate is uplifted to just 4.9 per cent by 2022, according to EY India, if we include the predicted growth of 9.5 per cent for this year and 8.5 per cent for 2022-23. It suggested that there need to be initiatives to lift the trend growth rate to 7 per cent or above in the medium term.
In 2022 Goldman Sachs was 1%.
Fitch said 6% of GDP is due to stronger revenue buoyancy.