Friday, September 10, 2010

Countdown for the Indian IT industry thriving on off-shored work from different State governments in US?


The news is definitely a bang on the heads of all who thrive and make pots of money from off-shored IT work from government departments of US. The ban brought about by the US State of Ohio on outsourcing government IT and back office projects to off-shore locations such as India is definitely not palatable news for us all.

Mr. Strickland, we understood that “international trade” is Federal subject matter. In the fitness of things, could this kind of regulation be actually legally passed by Ohio?

Do you really mean to keep this regulation in force for quite sometime Mr. Strickland? Or is it just to take care of the situation just before the November elections to the US Congress and Governorship of Ohio?

One of the reasoning put forward by the Governor for the State of Ohio for passing such a regulation is:

"There are pervasive service delivery problems with offshore providers, including dissatisfaction with the quality of their services and with the fact that services are being provided offshore,"…….

Are you sure Mr Ted Strickland that this was the reason for taking such a step?...... delivery problems and quality? …..Perhaps you should have thought twice before making such a statement….if the problem was all about quality could that not have been resolved by other means?

The world knows that Indian IT guys have been delivering very high quality of work and the phenomenal growth rate achieved by the Indian off-shore IT industry during the recent past also bear testimony to such fact.

Mr. Strickland, would such a regulation not bring about a rise in the budget of the State of Ohio? I mean, if all the IT jobs off-shored by the government of the Sate of Ohio is withdrawn to be done onshore, then the cost of having such assignments done on-shore would undoubtedly be many times higher than having it done from India. Would that not put a heavy stress on the already tightened coffers of the concerned State? It is not unknown news that Governments of different States in US are going through strict budgetary measures to cut cost in all administrative and support functions.

Experts are afraid that other States in US might follow suit. Perhaps before blindly following the foot prints of Ohio, the other States would do well by actually taking stock of the amount of work the intending Sate government off-shores to India. Thereafter weigh the dollar equivalent of the bill it pays to Indian companies for such work as opposed to the amount it would be required to spend for pay to its on-shore IT guys for having the same work done on-shore. This will help them to find out the required hike in the budget for the intending State government.

The intending US States would also do well by looking at the fiscal studies released by the US Chamber of Commerce about the financial efficacy of off-shoring. Loss of jobs can be tackled in a better way than by floating a policy of pseudo-protectionism.

The silver lining in the small little dark cloud hanging over the head of the Indian IT industry is that, only the Government IT jobs from Ohio will not come to India; the private sector remains untouched.

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