What recession?

Is there a recession? If one goes by what the industry people say, yes we are going through a severe bout of recession. But if one goes by the actual figures, the truth seems to be quite different.

Defying the Cassandras of doom, the Indian IT industry grew by an astounding 50 percent in the financial year 2000-01, according to the Dataquest Top 20. In fact, this is the highest ever growth achieved in the history of Indian infotech industry.

Compare this with the 38 percent growth recorded in the 1999-2000 financial year. This means that despite a tough year when the country went through severe economic recession, the IT industry managed to hold its own against all odds. And if in this year the economy rebounds, which it should as the indications are positive, then one can well imagine what the growth rate can be.

Overall, what is heartening is the fact that all the sectors contributed to the healthy growth. Surprisingly, the hardware sector which should have been the first one to be affected by recession, grew by a whopping 52 percent in unit terms. Even in terms of value, the growth at 46 percent was very good. However, the excellent growth of hardware did not translate into success for the peripherals sector. Peripherals as a whole could only inch upwards at a rate of just about 17 percent in unit terms and 22 percent in value terms.

Overall, the software industry is what has not only kept the industry afloat but also buoyant. This sector grew by an excellent 56 percent. Although exports grew by a phenomenal 60 percent, what made the growth more sizzling was the fact that the export of consulting services grew by a staggering 105 percent. In the process, the IT industry got something to smile about. In the process, the IT industry got something to smile about.

The most interesting aspect of the hardware industry is the performance of the PC segment which according to DQ Top 20 grew by 52 percent in unit terms to go up to 17.5 lakh. And in the current fiscal, according to IDC, PCs would grow by another 50 percent to touch a figure of 25 lakh. And that would really be a big achievement.

No doubt, the 2001-02 fiscal started on a very gloomy note as the first two months--April and May--were extremely bad for the industry in terms of business. But then the tide turned in June when business picked up. And now the first quarter results announced by a number of software vendors like Infosys, Satyam, Polaris etc have turned out to be excellent. Which essentially means that we are due for some good times. And if that happens, where is recession?