The Hindu Business Line : IT players eye big bucks from Govt projects

After a slugfest for business in the US and Europe, Indian IT vendors are now rolling up their sleeves for the next skirmish — in the domestic market.

India’s largest IT services company TCS is eyeing about $1 billion revenue from Government contracts in three years, while Infosys Technologies sees ‘booked business’ from India at $1 billion in the same period. HCL Technologies and Wipro too are gearing up for a slice of the market.

“Revenue from Government projects is still a very small part of our overall revenue… But in the next 2-3 years, we are looking at a double-digit revenue contribution from it. In fact, Government business for us will be $1 billion in revenue in three years,” Mr Tanmoy Chakrabarty, Vice-President and Head — Government Industry Solutions Unit, TCS, told Business Line.

Already, TCS has two mission mode projects — the MCA-21 and Passport Seva Project — under its belt. “There are huge opportunities in the Government space. The Centre had earlier announced significant investments for mission mode projects under the National e-Governance Plan (NeGP) and we are seeing some of those contracts flow into the market now,” said Mr Chakrabarty.

The company — like its smaller rivals — is also keen to participate in the Government’s ambitious Unique Identification (UID) project. Industry experts say that, apart from large contracts in telecom, railways and Defence, the domestic proposition is also strengthened by State Government orders, including e-district, e-municipality and e-health.

Like TCS, IT bellwether Infosys Technologies too is chanting the India mantra. Previously, the company’s presence in the domestic market was primarily through its banking product ‘Finacle’, but it has now moved to a higher level in IT services.

“We are talking about $1 billion of booked business in the next 3-4 years from India,” Mr Binod H. R., Senior Vice-President and Head, India Business Unit, Infosys, said.

In July, Infosys clinched the ‘eBiz Project’ from Department of Industrial Policy and Promotion (DIPP). The project, through its single-window approach, will cater to the business life-cycle for all government-to-business services. Infosys has also bagged an order to establish and manage a central processing centre for the Income-Tax Department.

The local market is gathering steam at a time when the $46-billion Indian outsourcing industry has seen its growth rates slow down over the past few quarters.

Nasscom estimates that the domestic market would grow 15-18 per cent, even as the export market is likely to grow a mere 4-7 per cent in FY10. This would peg the domestic IT and BPO market numbers at a staggering Rs 67,000 crore, compared with Rs 57,000 crore last year.

“The slowdown in the US and UK markets have given local players an opportunity to explore the Indian market potential. Just the e-governance contracts over the next five years could spell an $8 billion opportunity for companies,” Mr Avinash Vashistha, Chairman and CEO of offshore advisory firm, Tholons pointed out.

Naturally, no one wants to be left behind in the race. IT major Wipro is busy fine-tuning its strategy to tap onto the business from Government. Wipro Ltd, Joint-CEO, Mr Suresh Vaswani had earlier told Business Line that the company’s plans for the local market have been somewhat “conservative”. “We expect the business to be big in this space, and so the exercise is aimed at leveraging our full capability in tapping the opportunities,” Mr Vaswani had said.

HCL Tech – which now ranks fourth in the pecking order of India software exporters – is bullish on financial services and public sector space. It plans to adopt a solutions led approach rather than building from scratch, when it comes to addressing the Government market. “There are three areas which we are working in Government…We are amongst the only people talking to Government on those sectors, but I do not want to comment on it at this juncture,” HCL CEO Mr Vineet Nayar said.

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