The software and related services sector has a multiplier effect on the Indian economy with every one-rupee input resulting in a 100 per cent return, a study by rating agency Crisil Ltd said on Tuesday.
Every rupee spent by the IT-ITES sector translates into a total output of Rs 2 in the economy," the study done for software industry body NASSCOM said.
The study has analysed the expenditure on operating expenses, capital expenditure and consumption spending by professionals in the sector.
For every job created in the sector, four are created in the rest of the economy, it said.
The software services sector had a lot of headroom for growth, it said, adding 'cost-competitiveness remains a key factor determining investment attractiveness'.
While wage inflation was likely to remain, operational efficiencies offered, 'significant scope for offsetting margin pressures', the study found.
At current levels a 1 percentage point rise in billing rate would translate into a 0.6 percentage point rise in net margins, while a 1 percentage point rise in employee utilisation would result in a 0.5 percentage point rise in net margins, it said.
Courtesy : Expressindia.com
Every rupee spent by the IT-ITES sector translates into a total output of Rs 2 in the economy," the study done for software industry body NASSCOM said.
The study has analysed the expenditure on operating expenses, capital expenditure and consumption spending by professionals in the sector.
For every job created in the sector, four are created in the rest of the economy, it said.
The software services sector had a lot of headroom for growth, it said, adding 'cost-competitiveness remains a key factor determining investment attractiveness'.
While wage inflation was likely to remain, operational efficiencies offered, 'significant scope for offsetting margin pressures', the study found.
At current levels a 1 percentage point rise in billing rate would translate into a 0.6 percentage point rise in net margins, while a 1 percentage point rise in employee utilisation would result in a 0.5 percentage point rise in net margins, it said.
Courtesy : Expressindia.com