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We must all necessarily stay on tenterhooks and be vigilant to do whatever is
in our powers to preserve our causecertainly an interesting time for our
industry!
A TV talk show host in the US on Monday speculated whether we are
experiencing a major recession or a minor depression as the news flow continues
to be poor in every part of the world. And the fortunes of both Wall Street and
Main Street seem to be in free fall. The mood in Washington DC where a Nasscom
delegation spent three days speaking to Senators and their economic policy
advisors on Capitol Hill and interacting with equally concerned associations
like National Association of Manufacturing and Tech America, was sombre. As one
worthy rightly put it after listening to our eloquent logic in favor of free
trade and anti protectionism: Your logic is irrefutable but the free traders
will have to wait till better news comes from the corporate sector and that does
not seem likely to happen anywhere in the near future!
Daniel Thorniley of the Economist Intelligence Unit mentions key points that
are causing uncertainty to policy planners in all developing markets and the
dilemmas in India, and also the IT and business services firms who will surely
resonate with his views. Put in five major buckets these concerns are.
- How deep and wide will the crisis be in the West and when will credit
start flowing again?
- Will Western banks support their subsidiaries and encourage lending in
emerging markets when they have their backs to the wall at home?
- What will happen to oil and commodity prices globally and which way will
currencies swing?
- When will the unemployment charts look a little better and what will be
the fate of infrastructure spending around the world?
- With the spectre of protectionism coming in the way of global free trade,
will companies outsource more or less to emerging markets during this time?
While all the points have relevance for the immediate and medium term GDP
growth in India, the last point is what has the entire industry holding its
breath. The logic of global competitiveness being increased thanks to global
movement of work with the resultant reduction in cost and improvement in quality
and innovation has been made many times. Moreover, at a time when most major
American and European corporations garner over half their revenues outside their
home country, ranting and raving against the outsourcing of jobs and the
tendency of global corporations to keep their money earned abroad in those
countries rather than move it back and pay high taxes in their home country can
at best be rhetoric that will resonate well in the minds of the domestic
watchdogs but fly in the face of the essential logic of globalization.
The other issue that concerns most Indians working in the high tech industry
is the tightening of immigration and the flow of visa holders particularly to
the US. Two pieces of legislation that were introduced in the 110th Congress
(the previous one) in the US and did not pass were the comprehensive immigration
bill and a more specific one that that would limit the number of H1B visas
available to companies to a percentage of their total employment. Our sense is
that while none of these are specifically targeted at the Indian knowledge
worker community, this may well be the inadvertent outcome as a pro labor
administration walks the tight rope between its focus on America and its desire
to honor international commitments.
The good news about American and British politics is that there is an
inherent sense of fair play and the willingness to debate with an open mind
which makes it possible for sound logic to be placed in front of the bill
creators and decision makers before, during and sometimes even after a bill hits
the floor of the house.
Ganesh Natarajan
The author is Chairman of NASSCOM and Vice Chairman & MD of Zensar
Technologies. He can be reached at
maildqindia@cybermedia.co.in
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