Rapidly rising Rupee to hit small companies more: NASSCOM

Hyderabad, Dec 4 (UNI) Even while maintaining that the rapidly rising Rupee will hit the Information Technology industry over the next five years, National Association of Software and Service Companies (NASSCOM) President Kiran Karnik today asserted that the Indian IT sector would achieve a revenue of 60 billion Dollar in 2010 despite the Rupee's appreciation against the US Dollar.

''The appreciating Rupee will not hit the topline this year and the IT industry is sure to clock over 26 per cent growth,'' he told reporters here.

However, India would lose the advantage of being an attractive destination for IT services and Business Process Outsourcing(BPO) over the next five years if corrective steps were not taken by the Centre, he opined.

Urging the Union Government to provide a conducive tax and fiscal environment, Mr Karnik suggested creation of a fund to buy technologies and technology companies to ensure a stable exchange rate. ''We are not against Rupee appreciation per se. A 15 per cent appreciation in one year is too much and too fast.'' ''This creates problems for all exporting industries. But IT industry is hit the most, particularly smaller companies, many of which are exporting to a single market -- USA,'' he pointed out.

''Rise of every one Rupee will result in 30 to 40 basis point change in the bottomline of IT companies,'' he informed.

While IT majors would be able to survive, medium and small IT companies would be hit hard over the next five years, he said, adding that Chief Ministers of those States which had big IT bases, including West Bengal and Andhra Pradesh, had come to their defence and urged the Centre to extend the tax concessions beyond 2009.

UNI