Re volatility will hit IT firms' planning: Karnik

Expressing concerns over the rising rupee against the dollar, Nasscom President Kiran Karnik said the information technology (IT) firms' planning will take a serious hit if the Centre does not initiate measures to stabililse the rupee.

"The IT industry can withstand marginal fluctuations of rupee versus dollar. But there has been an 8% fluctuation in the last three months. This trend is something different. We hope the Centre will take appropriate measures," Karnik said today on the sidelines of the launch of an IT finishing school.

He pointed out that the industry can sustain growth on a short-term basis. "The business momentum is good at this point of time. The topline will not be affected. However, on a medium term and long term basis, all IT companies will take a bad hit since US constitutes two-thirds of the market. At the same time, other costs, including some categories of wages are increasing," he noted.

"There is a general perception that the IT industry has matured. But that is not true. Unlike other sectors like 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."

"There were indications of a slowdown in the US economy. So far, the slowdown has not happened. Whatever be the situation, we expect the IT industry to be prepared for 2-3% appreciation of the rupee year-on-year," Karnik said.