REFLECTIONS

NASSCOM CHAIRMAN IS WRONG

The recent news about US President Obama saying that the loopholes in the prevailing tax laws will be plugged, has sparked attention in the Indian press – of particular interest, was his saying that it was imperative to create jobs in the US (for eg. in Buffalo, New York) as opposed to Bangalore, India. The response by the NASSCOM Chairman, Mr. Pramod Bhasin, is perplexing and in my personal opinion, totally flawed and wrong. He says that Indian companies will not be severely impacted by the President Obama plan.

To begin with, this is a very quick off- the- cuff response by the NASSCOM Chairman to an announcement by the US President. As a US citizen and having been the co-founder of two Silicon Valley companies, I do understand the industry from a US perspective. Mr. Bhasin’s pointing out that this will affect US companies is absolutely right – nobody questions that – that is very clear from President Obama’s message.

What is not clear is how once can conclusively say that there will not be any impact of this on Indian companies – the real answer is ‘Nobody Knows’ and any other answer offered by the NASSCOM Chairman is ‘wrong’ in my book. It is clear though that if this becomes law, there could possibly be huge layoffs among the CISCOs, Microsoft, IBM, Oracle and Intel employees based in India. That could boomerang and possibly affect the other Indian IT companies – for Mr. Bhasin to say that none of that will happen is definitely premature and hasty.

This is a baby step in the US plan for re-emergence and it will be poetic justice of sorts if the IT Czars of India (Nandan, Premji and Co.) come up with a plan to help put America back on its feet. A model could be developed (and this is what NASSCOM as an industry body should look into) wherein a certain percentage of all positions are guaranteed to US citizens based in the United States. The India-based BPO and IT companies should unleash a BUILD AMERICA plan that targets all the University towns in the United States and assures jobs to the money-starved students – for instance, a university town like Arcata, California might have at least 300-500 students who could staff the BPO offices and then, if the company decides to expand to India creating another 3000-odd jobs in India nobody will begrudge them – because there is a win-win element in the model.

I am confident that the larger IT companies are much more sanguine about this than the NASSCOM Chairman and are probably working furiously at developing win-win models for the future. It is the smaller IT companies that could become vulnerable and it is for them that NASSCOM should investigate options, rather than brushing away the issue.

In my mind, this is a clarion call to Indian IT companies – the party is over – it is time that they also participate in rebuilding the United States from a US perspective by adopting a more pragmatic approach that will ensure long term sustainability for all stakeholders.

posted by sekhar @ 10:15 PM