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Weak rupee not good for Indian economy: Nasscom
Nasscom said that neither a weak rupee is good for the economy nor a strong rupee as well. So there should be a balance.
Mumbai: As rupee has breached the 60-mark against the dollar, the apex body of IT and software services industry said it would like the Indian unit to be more stable as it is in the interest of overall economy. "We think the 54-56 range is good which we had kind of settled in. I hope the rupee comes back to that level and hovers within that short band.
"I don't think a weak rupee is good for the economy. But then there is problem with a strong rupee as well. So there should be a balance," said Som Mittal, President of Nasscom, on the sidelines of an event here.
In the IT industry most of the contracts are long-term and due to that it becomes difficult for the companies to arrive at a price level in such deals, he said. Mittal said in some large companies as much as 30-35 per cent of the cost like salaries, sales, administrative expenses and equipment, among others, are dollar denominated. Hence, they do hedging.
"So you might find some people gaining in the short-term and some even lose because of the currency fluctuation. Nobody had expected the rupee will slide to this level," Mittal said.
On the US immigration Bill, which if sails through would badly hit Indian companies due to certain provisions related to H-1B visas, Mittal said Nasscom is pinning hopes on the House legislation. "We are now depending on the House Bill. We are hopeful it will not have restrictions and will have all the positives," the President of Nasscom said.
Describing the legislation as on the expected lines, he said the House Bill will in a way be a balancing force for the domestic companies, which get more than 60 per cent of their revenues from the US.
Earlier, Mittal, along with WNS Global Services Group Chief Executive Keshav Murugesh, announced the launch of the Business Process Management Council. Murugesh has been appointed as Chairman of the Council for 2013-15. The body envisions re-branding of the entire industry to connote its true value and impact business outcomes.
The Council will work towards positioning India as a preferred global destination for Business Process Management (BPM) services. The Indian BPM industry has set a goal of achieving USD 50 billion in revenue by 2020 from USD 18 billion now.