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Vinson Kurian

THIRUVANANTHAPURAM, May 26

THE National Association of Software and Services Companies (Nasscom) believes that profit margins of 30 per cent are unsustainable due to the fact that "we exist in a market economy and margins in the `teens' are more realistic expectations for the industry going forward".

Despite the pressure globally and in comparison to the US companies which enjoy a single digit or negative profitability, Indian IT companies are better off and doing much better witnessing a double digit profitability growth.

On supply side challenges, Nasscom said since the IT industry was a people intensive industry, a good flow of quality manpower had to be ensured; they needed to be trained on not just the core skills but also on soft skills. "In order to capitalise on the resource base, we need to ensure that there is adequate power supply, roads and transportation facilities. These are the basic hurdles the industry is facing'', it said.

The association is working with the Union Ministries of External Affairs and Communication and Information technology on the modalities of issue of a new category of visas i.e. professional visas, to meet the requirements of the IT world as some countries such as the Netherlands have raised questions over the use of the business visas for a short period.

In an industry update on Indian software and service industry, Nasscom has said that it would work with the Government to discuss the special category of visas to be created for professionals, according to an official spokesperson.

There have been some unfortunate incidents in the recent past involving Indian IT professionals. These are separate incidents and in no way constitute a backlash or a conspired strategy. On anti-outsourcing Bills, Nasscom said the current status was that all those Bills had been put on hold. "Nasscom's stand on the same is that there is no need to worry, but we are concerned and we will not be complacent in addressing the issue".

In its various interactions with US customers, the association has opposed the Bills and is busy tackling the same.

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