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CURRENT UPDATES OF SERVICE SECTOR

1) The Government of India is ready to launch cloud computing initiative, Communications and
IT Minister Kapil Sibal said.India with its vibrant IT industry and adoption of IT in government
is uniquely positioned to immensely benefit from cloud computing, Sibal said while delivering
the keynote address at the day-long Open House on India as a Hub for Cloud Services here
on Tuesday.Sibal said that Cloud is likely to unleash new growth opportunities for Indian IT
industry and also bring innovations in the way IT solutions and services are delivered.He said
that with their modest resources and technology, medium and small sector industry needs the
clouds more than anybody else.He said that keeping in mind the economic and cultural
context, the architecture of Indian clouds will have to be different, frugal and
innovative.Speaking on the occasion, Minister of State for Communications and IT Sachin
Pilot said that with 120 million Internet users and with net connectivity slowly spreading to
Panchayats, this is the right time for India to develop cloud services.Pilot said content creation
would have to be in Indian languages if the benefits of cloud services are to reach the
common man. He said the issues of data vulnerability, privacy laws, regulatory oversight and
network security need to be addressed.The cloud is a shared pool of configurable resources
categorised by on-demand self-service, resource pooling, elasticity and measurable service
levels.

2)India's domestic market for IT services is growing rapidly, but it is still small compared with the
offshore IT work done in the country for organisations overseas.The domestic IT services market in
India represents a mere 1.4 percent of the world's total IT services spend, far short of the 39
percent seen by the US. In a report released on Monday, Pierre Audoin Consultants (PAC)
estimates India's IT services market at $7.3bn (4.7bn) last year. The analyst house expects it to
grow by 14 percent this year, compared with the three to four percent predicted for the US and
Europe.Three-quarters of the demand for IT services in India comes from four vertical sectors:
government, manufacturing, telecoms, and banking and financial services. Outsourcing within
India is also a growth area, with PAC calculating that outsourcing in India hit $2.3bn last year.But
demand for IT services from Indian companies is dwarfed by the provision of offshored service by
Indian companies to organisations abroad. According to the analysts, offshore IT services created
33bn in revenue in 2011 three-quarters of the worldwide total.PAC senior analyst Rajeev
Suman said more growth in IT project spending will come from larger Indian government
initiatives such as the Tax Information Network and the National Pension Scheme.Demand for IT
services from smaller Indian cities such as Mohali, Ahmedabad, Surat, Indore, Bhopal, Lucknow
and Mangalore will increase and account for as much as 25 percent of total Indian IT services
business, he noted."This trend is seen mainly due to rise of SMBs in these cities and their
propensity to ask for cost optimisation," Suman told ZDNet.
3) New Delhi: India's economic growth could fall below 5 percent in the the first quarter of current fiscal,
impacted by contraction in industrial output and deficient monsoons, global research firm Citi has said.
"The (industrial) production numbers will have a bearing on the 'value-add' industry numbers for Q1 FY'13 GDP.
This coupled with sub-par monsoons and the deceleration seen in some of the service sectors could result in a
sub 5 percent Q1 FY'13 GDP," Citi said in its 'India Macro Flash' report.Data released yesterday said industrial
output in the first (April-June) quarter contracted by 0.1 percent, against a healthy 6.9 percent growth in the
corresponding period last fiscal. For the month of June, IIP declined by 1.8 percent, against a growth of 9.5
percent a year ago.Besides, rain has been 20 percent lower during June-July, affecting kharif crops, mainly
coarse cereals and pulses. Karnataka, Gujarat, Maharashtra and Rajasthan are facing drought-like situation.
Last week, the Met department said the monsoons will be below normal by 9-10 percent of the long period
average. Monsoon is the life-line of the agriculture sector as only 40 percent of the cultivable area is irrigated.

The Reserve Bank in its policy review last month had kept key interest rates unchanged but cut its growth
expectations for the fiscal to 6.5 percent from the earlier 7 percent, blaming high fiscal deficit, sticky inflation and
a possible drought."On rates, while we lowered our rate cut call to 50 basis points, given the RBI's stance on
inflation, we re-iterate that rate actions are contingent on 'some' government action," Citi said.It said while on the
production side the deficient rainfall will likely take its toll on agriculture and could have a knock-on impact on
both industry and services, on the expenditure side, investment decline is a cause of concern.Analysts feel the
worsening economic situation will put pressure on the Finance Minister to quickly move ahead with the initiatives
announced by him earlier this week.Finance Minister P Chidambaram had said the government will converge on
the (Mahatma Gandhi National Rural Employment Guarantee Act) and other schemes to meet the challenges of
drought-like situation in several states and enhance imports of commodities in short-supply to control price
rise.This week, Citi as well as CLSA, Crisil and rating agency Moody's had trimmed their annual growth forecast
for the Indian economy."The global economic slowdown and domestic policy missteps are weighing on
confidence and demand," Moody's had said.
4) Indian

aviation is likely to witness some key technologies

SITA, the global IT provider wholly owned by the worlds airlines and airports, has introduced many innovations for Indias
airlines, airports and passengers. Maneesh Jaikrishna, VP, India and sub-continent, SITA talks about the company's

Maneesh Jaikrishna
future plans, emerging technological trends and market scenario. By Kahini Chakraborty
What are the new solutions that SITA is looking at offering the Indian for airlines, airports, GDS to streamline
the business?
Since its inception in 1952, SITA has been instrumental in bringing new technology to India and it has always been SITAs
endeavour to assist the Indian aviation revolutionise its operations and touch new heights. SITAs current and future strategies
are aligned with our commitment to play a critical role in the development of the Indian aviation sector.
SITA has introduced many innovations for Indias airlines, airports and passengers. These include the first check-in systems for
common use by the countrys airlines; air-ground communications; and airport management systems. Today SITA is involved
in all aspects of air transport in India - from check-in to the cockpit; from boarding to baggage carousel; from airline operations
to airport management; from passenger facilitation to border management.
One of our major focus areas is to help Indian airports improve their IT infrastructure by implementing world-class airport
systems and allied subsystems. As a result of SITAs focused efforts together with the airline community, a number of airports
throughout India have successfully implemented this strategy. In terms of our current operations, four years ago, SITA
partnered with Mumbai International Airport to showcase Indias first modern airport management system. This was a
significant step for us in terms of establishing a leading presence in the India airport sector.
It was also a strong signal to the worlds airlines that India was rising to the challenge of becoming a world-class player in the
air transport sector through an extensive airport modernisation programme that continues to gain momentum. Everyone
travelling through Mumbai has reaped the benefits. There has been an improved performance across the whole spectrum of
activity, including the more efficient allocation of resources to customer airlines such as departure gates, aircraft slots, check-in
counters and baggage carousels, and state-of-the art flight information displays for the travelling public. With many greenfield
airport projects in the offing, SITA is poised to play a critical role in developing and modernising these airports as an airport
systems integrator.

India continues to grow in importance as a market for SITA. As the community provider, SITA offers unique opportunities to
India-based carriers. While the benefits of SITA network services are widely known and appreciated, SITA also offers hosted
community applications.
With technological advances taking place rapidly, what is the next big thing in store for the travel industry?
As per the recent CAPA-SITA report on Innovation and Technology, Indian aviation is likely to witness some key technologies
being deployed, which are expected to have a positive impact on the businesses and operations in future. However, this will
need to be supported by favourable policy and industry initiatives. There has been sufficient progress in technology at the PPP
(Public-Private Partnerships) airports since 2010. Technologies for passenger experience enhancement such as self-service
kiosks, information exchange via mobile and social networking along with FIDS (Flight Information Deploy System) have
gained importance during the period.
At present PPP airports are planning to extend self-service kiosks for the purpose of lost baggage and transfers. In the last two
years, four out of five PPP airports established a social media presence. Currently social networking is being used primarily for
customer relationship handling, though further plans include promotion of services and flight updates.
Airports Authority of India (AAI) is considering investment in solutions such as virtualisation, self service kiosks, FIDS, ERP,
and RFID. Additionally, AAI plans to implement Baggage Reconliation Solution (BRS) at its major airports within two years. It
is also considering limited implementation of biometrics to enhance security. AAI is evaluating server virtualisation along with
the deployment of CUTE at 13 airports in the first phase and 25 airports in the second phase of implementation. Airport
Operation Command Centre (AOCC) is planned to be implemented at 10 airports within the next two years. Key drivers for IT
implementation for airlines are obtaining operational efficiency and bringing about enhancement of customer experience
coupled with cost reductions. Mobility solutions are emerging as a key IT investment area for the future with 90 per cent of
respondents planning some form of implementation in the next one-two years. Virtualisation, cloud computing, BI and multiple
applications of social networking are being considered actively.
Furthermore, technology implementation for cargo operations will witness the deployment of RFID and bar coding solutions.
This will be supported by applications for automating processes.
Ground handling agencies saw slow implementation of technology, on the back of rising competition impacting their bottom
line. However, technological implementation has increased due to the privatisation of major airports. Automation of
maintenance tasking and reporting systems has been implemented along with airline and airport operations systems.
Initiatives towards Border Management Solutions (BMS) have witnessed slow deployment since 2010 broadly on account of
policy issues. Initiatives towards Advance Passenger Information System (APIS) systems at major international airports saw
deployment towards increasing security and efficiency of border control. Solutions towards pre-screening of passengers and
using PNRs for risk assessment have already been implemented. Plans outlined in 2010 for biometric systems and electronic
documentation (bar coded boarding passes) in passenger processing have seen some progress but will take another three to four
years to implement.
Air Traffic Management (ATM) in India has witnessed numerous technological developments since 2010. Key drivers pushing
the pace of technology upgrading are rapidly increasing traffic flow and international compliance requirements.
Implementation of GPS-Aided Geo-Augmented Navigation (GAGAN) by June 2013 will make India as the fourth country to
have a Satellite-Based Augmentation System (SBAS). This will enhance Indias domestic ATC capabilities but will also improve
the regional flow of aircraft with its wide coverage.
Has there been any change in travel sentiments by passengers lately?
Passengers nowadays prefer a smooth and seamless travel. Also there is a growing popularity of web, kiosk, and mobile check-in
which has made travel easy. The 2011 SITA/Air Transport World Passenger Self-Service Survey found that the web check-in
rate was higher in Mumbai than at any of the other airports included in the survey. At Mumbai, 70 per cent of passengers said
they use it occasionally or frequently compared to a global average of 65 per cent. Mumbai passengers also have the highest user
rates across several self-service options and the demand was high for new services, according to this survey which also found
that the mobile phone is now an integral part of the passenger experience in India.

India is upgrading its existing airports as well as developing new ones. Are Indian airports heading in the
right direction in regards to adopting and implementing right IT solutions?
Civil aviation in India is now entering a new phase of development after two decades during which the sector has witnessed
both stagnation and unprecedented growth. The industry has experienced some natural growing pains, but numerous lessons
have been learned and are being acted upon.
Despite the recent growth, less than two per cent of Indians travel by air in any given year, highlighting that we have barely
arrived at the threshold of the growth potential of Indian aviation. India has 130 designated airports, of which 80 have
scheduled services. It is essential that airport planning and infrastructure development supports safe, functional, capacity
balanced and user-friendly airports. Over the next 10 years, the government has planned to invest US$ 30 billion to develop
Indian airports.
The CAPA - SITA report on Innovation and Technology estimates that by 2020 domestic traffic will reach 180 million
passengers per annum and international traffic will exceed 90 million. Airport infrastructure is critical for supporting this
growth. Congestion at airports has resulted in significantly increased costs for Indian carriers. The airport modernisation
programme that is underway is certainly delivering improvements. In fact, in recent years, IT has gone well beyond its
traditional role as an infrastructure cost to become a strategic tool that can help both airlines and airports to reduce their
operational costs.
PPP airports witnessed investments across three broad categories over the last couple of years covering enhancement of the
passenger experience and facilitation, improving airport operations and strengthening IT infrastructure. Technologies for
passenger experience enhancement such as self-service kiosks, information exchange via mobile and social networking along
with FIDS have gained importance during the period.
All PPP airports have Common User Terminal Emulation (CUTE) deployed; while business intelligence gained managements
attention. Solutions such as baggage reconciliation (BRS), RFID, biometric identification solutions and handhelds for internal
communication attracted attention. In terms of IT infrastructure, airports looked at implementing virtualisation and ERP
solutions.
Passenger facilitation technologies saw increased roll-out of self-service functionality and its acceptance by passengers. Kiosk
check-in has been the major focus area and saw widespread implementation at PPP airports. Moreover, most airports
implemented FIDS systems and are also planning to automate the public announcement system to reduce noise.
Mobility solutions are believed to play a critical role among airport operators, but dependencies on other stakeholders such as
security institutions are posing a hindrance in implementation and hence the priority allocated to mobility is declining when it
should in fact be the opposite.
Indian airports could consequently be left behind. The adoption of RFID has been slow in India even for the sole purpose of
baggage recovery, whereas other markets are already expanding deployment to redesign check-in, cargo handling, asset
management and even passenger management.

5)

Economic growth may slow down to 6-6.2% in FY13: Assocham


Source: IRIS (06-AUG-12)
slowdown in industrial growth and its spill over effect on the service sector, deficit Monsoon
and worsening global are expected to drag Indian economic growth to 6-6.3% in the fiscal
2012-13, an Assocham survey of economists and industry leaders has indicated.
Indian economy had slowed to 6.5%, the nine-year low in 2011-12, as per the official data.
The survey conducted amid 110 senior industry leaders and economists also cautioned that

the prospects may further worsen if some of the policy issues are not immediately
addressed.
Almost 80% of the economists covered in the survey, said the government has to create a
fiscal space for significantlyraising its capital expenditures so that the economy gets an
investment booster. This can be done by removing untargeted subsidy bill. The private
sector will follow as a spin-off, they said.
As the overall business confidence has further eroded in the first quarter of the current fiscal,
the outlook survey of The Associated Chambers of Commerce and Industry of India
(Assocham) indicated that the gross domestic product may grow even slower than the RBI`s
lower projections of 6.5% as the risks have increased on several counts.
Significant deficiency in Monsoon has added to the problems. The survey found that the
prospects of growth in agricultural sector are dismal.
In fact, the agricultural sector which grew at about 2.5% in 2011-12 may not show any
growth this year since sowing of the khariff crops, the main stay of the sector, has been
affected.
In this background, the survey respondents find that the industrial expansion at best could
be just about 4-4.5% for the year while the services sector, the major contributor to the GDP
is also showing signs of weakness. Mining is at a near standstill due to inadequate
regulatory environment and manufacturing is at low ebb.
However, all is not lost pointed out majority of the surveyparticipants if immediate steps are
taken to address the policy issues. These include addressing bottlenecks facing the
infrastructure projects and removing hurdles in the way of theforeign direct investment.
``The Reserve Bank of India has rightly pointed out that the Indian economy is at the crossroad. As the central bank called it, the economy can `spin up or down depending on how the
policy uncertainty is addressed and supporting measures put in place`.
Even though confidence level is low, urgent remedial measures can retrieve the situation,``
Assocham president Rajkumar Dhoot said.
The immediate measures are required, since the global headwinds are staked against most
economies in the world, including emerging markets of India, China and Brazil.
While China may soft-land with growth below nine%, India and Brazil would find it more
difficult to cope up.
The survey found while it is true that India still has a large domestic market, the country`s
total external engagement is well over half the size of the economy. ``It is not only the
merchandise exports which are getting hit, but also the services exports which are directed
towards the problem hit western economies,`` Dhoot said.
As many as 75% of those included in the Assocham surveysaid that the persisting euro
zone problems and weakening growth in developing economies (EDEs) will be weighing on
the global growth in 2012. The deceleration in BRICS countries, which have so far been
pushing growth in the emerging and developing markets, has made things even more
difficult for the global recovery.
The global trade flows have slowed with tight credit conditions and the adverse impact of
squeezing trade finance.

The situation does not look promising in terms of capacity utilization, overall investment and
the order book, found thesurvey. The investment outlook remains uncertain. As per the RBI
figures, investment intentions in the new projects sanctioned financial assistance moderated
to Rs 2.1 trillion in 2011-12 from Rs 3.9 trillion in 2010-11. These may further go down in the
current financial year.

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