Karnik seeks govt cover for IT against Re fluctuation

Expressing concern over the rising rupee, Nasscom President Kiran Karnik said the IT firms' would be seriously hit if the Centre did not initiate measures to stabililse the rupee.

"The IT industry can withstand marginal fluctuations of the rupee, but the currency rose 8 per cent in the last three months. We hope the Centre will take appropriate measures," Karnik said here today on the sidelines of the launch of an IT finishing school.

He pointed out the currency appreciation would not hit the industry on a short-term basis. "The business momentum is good at this point of time and the top line will not be affected initially. However, on a medium-term and long-term basis, all IT companies will take a bad hit since the US constitutes two-third of their market. At the same time, other costs, including some categories of wages are also increasing," he noted.

Karnik said the IT industry needed the government's support for growth.

"There is a general perception that the IT industry has matured. But that is not true. Unlike other sectors such as gems and jewellery, which import goods and add value to them before exports, IT industry does not depend on imports. The rupee appreciation may be good for the economy and other sectors, but not for the IT industry," he contended.