IT industry is resilient and will emerge stronger, says U B Pravin Rao

Unlike earlier periods of recession, after the Covid-19 pandemic, there is likely to be greater investment in technology to make supply chains and client systems resilient, says technology services industry body National Association of Software and Services Companies’ (Nasscom) newly appointed chairman and Infosys Chief Operating Officer U B Pravin Rao in conversation with Neha Alawadhi. Edited excerpts:

You’re taking over as Nasscom chairman in a challenging year. What are the priorities for Nasscom in the coming financial year?

These are challenging times for the Indian information technology (IT) industry. However, the industry has time and again proven its resilience. We hope to emerge stronger. The immediate priority is navigating through the Covid-19 situation and ensuring business continuity. After Covid, I hope to continue the growth rate we’ve been doing, of taking forward the industry and making it relevant in the digital era, including expanding our market presence, skilling and reskilling workforce, and contributing to India’s gross domestic product (GDP) growth. 

Is there a more concrete understanding of recovery once the situation normalises?
 

We are past the phase of ensuring business continuity for clients, and in the stabilisation stage. We have to plan for whatever the new normal is. I expect this to happen in a space of over two-three months. As we do this, we should also ensure social distancing at the workplace and adequate focus on employee health and wellbeing. Over 80 per cent of our members are small and midsized companies and start-ups; will be much more impacted in the event of a prolonged lockdown. We are working with the government to provide relief to them to ensure zero or very minimal job losses. 

Do you have a clearer picture of the verticals which are the hardest hit?
 

The whole supply chain is disrupted. Some more impacted than others are travel and entertainment, retail and consumer packaged goods, and manufacturing — both on the demand and supply side. Pharma and lifesciences companies to some extent are doing well, but there are supply side issues. Some industries which are possibly less impacted are financial services, hospitals, and health care. 

What are you hearing from clients?
 

Clients are trying to wrap their heads around this pandemic and the impact on their own businesses. Everyone is struggling to figure out how long this will last. There is a lot of focus on cost takeout. Cash flow is a big area for them. Clients are also looking at variabalising their cost structures. The immediate impact will be to start looking at discretionary projects. Whatever is not relevant in today’s context, they will probably slow it down or put it on hold. But unlike recession in the past, our own belief is investment in technology will continue towards making businesses more resilient and investment in technology to derisk the supply chain will also happen.

It’s an election year in the US. What is the impact on the industry likely to be?
 

Global GDP will be 2 per cent less than the earlier projections. Predictions of slowdown and/or recession are there. The US is going through a tough time. But at the same time, the Centre has announced a very aggressive stimulus. We have to wait and see how long this will last. The short-term impact is difficult to predict. 

Your thoughts on onsite workforce, especially those with expired or about to expire visas.
 

In some countries like France and the UK, they have given relief to people who are out of status (for visas). The issue with onsite is with people whose visas have expired or are about to expire, in some sense they are out of status. Same for people who have gone on business visas. From our perspective, given the nature of the situation, I doubt any country will look at this as a violation, even though they have not really clarified it. Individual companies are working with local governments and Nasscom is also working with the foreign affairs ministry to talk to local governments to sort this out.