New Delhi: India's software and services industry is on track to become a $ 77 billion industry by 2008 despite global economic challenges, the country's main software body said on July 29.

Kiran Karnik, president of India's National Association of Software and Service Companies (NASSCOM), said the local industry was on course to match expectations of a survey the association conducted in 1999.

The Nasscom-McKinsey survey predicted India's information technology industry would grow to $ 77 billion in terms of total sales by 2008 on the back of strong exports worth $ 57 billion, said Karnik. The market is currently worth $ 10.1 billion.

"This calls for a compounded annual growth of 33-34 per cent each year which is tough but attainable for us. We are right on track," Karnik said.

The expected growth rate would generate robust employment.

"I see a tremendous revival of recruitment this year. By 2008, the industry will directly employ two million people and provide work for an equal number of people indirectly through support services," Karnik said.

NASSCOM added IT-enabled services would be the biggest driver for growth in the industry.

"This industry segment, which includes call centres, has experienced 70 per cent growth in the last financial year ended March 2002, generating revenues of Rs 41 billion ($ 850 million)," said Karnik.

"Revenues from the back-office operations of global firms will grow to $ 20 billion by 2008."

Karnik added India was slowly climbing up the value chain in the IT-enabled business.

"IT-enabled services sold through mushrooming call centres in India include very low- end, low-value work to very high-end, high-value work."

A lot of foreign airlines, credit card companies and banks have shifted their "back- office" work to India which has the world's second largest pool of English-speaking computer literates after the US.

"The IT-enabled service explosion started with a call to Citibank being bounced to Delhi by satellite and an unsuspecting Californian speaking to an Indian with a good old-fashioned American accent when enquiring about his bank balance.

"Now the same Indian graduate on the other side of the phone could be a doctor giving microbiology inputs to a global pharma company. Call centres have diversified into data processing and analyses which is much more intelligent, paying and high- value."