According to the "Perspective 2020: Transform Business, Transform India" report by industry association Nasscom and McKinsey, India needs to address some fundamental problems in case it wants its IT and BPO industry to generate an additional $150 billion revenue potential by 2020, over and above the $225 billion revenue the sector is expected to log.

However, to achieve the mammoth figures, India needs to undertake certain reforms in tertiary education, as well as create more Tier II cities boasting of world class infrastructure. On the whole, urgent steps need to be taken up for transformation of the business environment, infrastructure, talent development and innovativeness.

In fact, pointing to the explicit threats to India's competitiveness, the report made a mention of scarcity of employable talent, insufficient infrastructure development and increasing competition from the up-and-coming outsourcing destinations like China and Philippines.

Noting that even the estimated figure of $225 billion IT and BPO sector revenue is based on some basic postulations, McKinsey partner Ranjit Tilankar said that these include academic reforms involving the industry and the curriculum; increase in employability of graduate pass-outs from the existing merely 10-15 percent; a minimum of
5.5 percent increase in GDP; and no impact of protectionism.

Stressing specifically on protectionism, Tilankar said: "Protectionism could put about $50 billion of the projected revenue at risk!"