Minimum pay hikes for Infosys employees this year

Infosys Technologies, India's No. 2 outsourcer, would hand out minimum wage rises in April to its staff, its chief executive Kris Gopalakrishnan said on the sidelines of an industry conference.

"This is going to be a prolonged downturn," he said referring to the global economic slowdown.

The company expects IT services business to be slow in the foreseeable future as clients delay technology spending amid the global economic crisis, he added.

India's large pool of English-speaking engineers and cheaper wages has helped attract outsourcing from Western firms such as Citigroup, General Electric, Qantas and Airbus. But a recession in the United States, which accounts for more than half the sector's revenue, and turmoil in the global financial sector have halted the sector's scorching pace of growth and battered stocks.

"The environment continues to be challenging," Gopalakrishnan said. "The feedback we are getting from clients are that the budgets are going to be down, in some cases significantly down," he said of likely technology spending by the firm's customers.

"They are also saying that when the budgets are released there will be a delay in spending."

India's exports of software and services in the year to March will be sharply below an earlier forecast, expanding 16-17 per cent to about $47 billion, the National Association of Software and Service Companies said earlier this month.

On US President Barack Obama's pledge to end tax break for companies that send US jobs overseas, Gopalakrishnan said the Indian IT companies would wait to see how the proposal was implemented.

"My take on it is of course protectionism will only prolong the downturn," he said. "This is a challenge which we all have to face collectively."

Agencies