LAHORE, Oct 25: State Bank Governor Dr Ishrat Hussain on Friday said the IT sector had disappointed him as it had failed to take off despite incentives given to facilitate its growth.

Addressing the businessmen at the Lahore Chamber of Commerce and Industry, the governor said the IT industry was very close to his heart and he was prepared to do anything for its development. But it had failed to come up to his expectation, although the government had announced several incentives to boost this line of business. He said IT exports had not moved an inch despite enjoying all incentives they had asked for.

He said the central bank had received some 11,000 applications for different IT-related jobs for its $25 million IT project. But only 4,000 managed to pass the test held to screen the applicants and only about 500 could clear the technical interviews. It means that not only there is a very small market to absorb thousands of IT graduates (being churned out every year) but also that most of them are not “employable”.

Dr Hussain said the businessmen were allowed by the State Bank to “invest in any line of business outside the country and obtain foreign exchange for it.”

He said he was hopeful that the new political government, which is expected to be installed next month, would not reverse economic policies of the present regime.

“The political leaders are responsible people and would not do any harm to the economy. Besides, if Shaukat Aziz is retained for the post of finance minister in the new setup, the policies would certainly not be changed,” he added.

Dr Hussain said “with the privatization of HBL in the next few months, the public sector ownership of banks will come down to 20 per cent. This will produce competition and help bring down the interest rates.” He stated the banks had already reduced weighted average interest rates by three per cent to 11 per cent.

He said the government was also working to clean up the balance sheets of the nationalized banks to prepare them for privatization. “We are also helping them broaden their customers base by encouraging and assisting them to develop a whole range of products like consumer financing and mortgage financing. It would help them reduce their interest rate.”

He said prudential regulations for the small sector were being revised because their needs are different from that of large industry.