According to a recent CRISIL study released today, the IT and ITeS services sector has a multiplier effect on the Indian economy with every input of a rupee resulting in a 100 per cent return.

The study, conducted for NASSCOM, says, "Every rupee spent by the IT-ITeS sector translates into a total output of 2 rupees in the economy."

Analysing the expenditure on operating expenses, capital expenditure and consumption spending by professionals in the sector, it notes that for every job created in the sector, four are created in the rest of the economy.

The study said that a the current levels a 1 percentage point increase in the billing rate would translate into a 0.6 percentage point rise in net margins, while a 1 percentage point rise in employee utilisation would result in a 0.5 percentage point rise in net margins.

While wage inflation was likely to remain, operational efficiencies offered, "significant scope for offsetting margin pressures," the study found. It also noted that software services had a lot of room for growth adding "cost-competitiveness remains a key factor determining investment attractiveness."