Highlights: Economic Survey 2007-08 - HT
The survey, tabled in Parliament today, pegs economic growth in FY 08 at 8.7%, lower than 9.6% in FY 07
* Economic growth in FY 08 pegged at 8.7%, against 9.6% a year ago
* Inflation to decline from 5.6% in FY 07 to 4.4% in 08
* Inflation and infrastructure biggest challenges for growth
* Dearth of skill causing attrition, wage hike; pushing inflation
* Farm growth in FY 08 seen at 2.6%, against 3.8% a year ago
* Foodgrain output seen at 219.3 MT in FY 08 against 217.3 MT in FY 07
* Acceleration in domestic investment, savings drove growth
* Macroeconomic fundamentals continue to inspire confidence
* Industrial growth slower at 9% in first 9 months of FY 08
* Costly rupee, sluggish consumer goods and infra a concern for the economy
Good news for Indian cos on IT spend
BANGALORE: Early indications on IT spending by large global corporations suggest that growth in offshore/outsourcing budgets may be either flat or marginally up. For the Indian IT services industry, especially for the large players like TCS, Infosys, Wipro, the annual IT budgets of its clients sets the tone for the rest of the year.
The IT budgets, which are generally finalised by the end of December or early January, was delayed this time primarily due to the uncertainty in the US economy. The dependance of the Indian IT industry on the US economy is well above 50%.
According to Forrester's Global IT 2008 Market Outlook, the IT services spending by the US economy is expected to show a growth of 4% in 2008 against 6% in 2007. While early indications suggest IT budgets have been either flat or moderately up, there has been a cut in the BFSI spending, according to analysts. The cut in BFSI spending has been largely by the US banks, which have been hit hard by subprime crisis and are under pressure to cut costs. –
http://economictimes.indiatimes.com/articleshow/2820866.cms
Fidelity's offshore facility hands out pink slips to 30 in Gurgaon
Recruiters for global financial firms say they have not seen any slowdown in their clients' hiring drive
Fidelity Business Services India Pvt. Ltd, the business process offshore division or back office of one of the world's largest asset management firms, has terminated the services of 30 employees at its investment management services group in Gurgaon in what it terms as a "business decision."
Fidelity Business Services provides research and information technology assistance to the global operations of its parent, Fidelity International. Established in 2001, the firm employs around 7,000 people across three offices. The number of people employed in the investment management services group isn't known.
"There was a review of the way in which analyst support was provided to global offices. The reorganization of the team has led to some roles being discontinued. However, Fidelity remains committed to India," said a Fidelity spokesperson.
Fidelity International also runs an asset management company in India, Fidelity Fund Management Pvt. Ltd. This firm managed Rs9,509 crore of assets as on 31 January. It is also registered as a foreign institutional investor (FII) with stock market regulator Securities and Exchange Board of India.
Fallout of the US crisis?
A senior executive of a back office firm said it was only a matter of time before the US credit crisis that has affected large financial institutions in that country, has an impact on the so-called captive back-office units of those companies here. "One could see either a slowdown in the recruitment process at these captive units or the resources may be channelized into other operations," this person added.
Wall Street investment banks, stung by debt losses, have cut tens of thousands of jobs, and even more significant cuts could come in the months ahead amid a bleaker earnings outlook.
US financial services firms eliminated more than 52,000 jobs in the second half of last year, a New York City official said in the second week of February, based on a quarterly study. Boston Consulting Group's Achim Scvhwetlick estimates that firms may reduce headcount by 5-7%.
Goldman Sachs Group Inc., Lehman Brothers Holdings Inc., Merrill Lynch and Co. Inc., Bear Stearns Cos Inc. and Morgan Stanley have been cutting jobs since June, though pink slips have been on the rise since late January.
Many of these firms have outsourced some of their operations to India, employing thousands of people. Lehman has a back office in Mumbai, Lehman Brothers Financial Services (India) Pvt. Ltd; JPMorgan Chase and Co. has two such units in Mumbai and one in Bangalore; and Goldman Sachs has one in Bangalore. It is not known whether any of these firms has seen a slowdown in the recruitment process, although an executive at a staffing services firms thinks that unlikely.
"It (the crisis) hasn't affected the hiring requirements" of the back offices of the "international finance companies we work with," said Raman Hariharan, general manager, information technology enabled services practice, at Manpower Services India Pvt. Ltd.
Other recruiters also do not see a slowdown in hiring by the back offices of finance firms. Asim Handa, country manager at New Delhi-based Futuresteps, a subsidiary of recruiter Korn/Ferry International, said his firm has not seen any slowdown in the recruitment drive of his clients.
Futuresteps hires middle management executives for the captive business operations of some international financial services firms here.
Joseph A. Giannone of Reuters in New York contributed to this story.
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