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Outsourcing: Impact of IT on India’s Intellectual Capacity
By Shailesh Upadhyay and Ujala Shanker

A stract This paper sheds light on !arious aspects of the impact of IT outsourcing from the US to de!eloping countries like India and illustrates ho" the profits of outsourcing are not necessarily the only indicators of impact# Outsourcing has played a major role in shaping technology policy of many de!eloping countries and has led to deceleration of other core engineering disciplines like electronics$ mechanical engineering$ ci!il engineering and en!ironmental engineering# %urthermore$ the enefits of outsourcing are mostly reaped only y the ur an population "hile a !ast majority of citi&ens especially those in rural areas continue to face ine'uality and po!erty# By ela orating a out the inefficient educational system and negligent policy making$ the paper tries to e(plain through e(amples ho" IT outsourcing has put de!eloping countries in a !ulnera le spot and can ha!e ad!erse conse'uences on the economy in the long run# The paper further attempts to re!eal ho" IT is hindering the ad!ancement of other crucial sectors like agriculture$ manufacturing and healthcare# To"ards the end$ the paper pro!ides a fe" policy recommendations# Information Technology )IT* and Business +rocess Outsourcing )B+O* in India: An Introduction India’s success story as an IT superpo"er is no folklore, it all egan after the -..- economic reforms in India "hich pa!ed "ay for the usiness process outsourcing )also kno"n as offshoring* re!olution# Bet"een /000 and /001 alone$ a out 110$000 US "hite,collar jo s "ere lost to outsourcing in India and other countries# - The num er of jo s created collaterally as a result of outsourcing "as e!en more numerous# 2odern Indian cities like Bangalore$ 2ysore and 3ydera ad "ere flocked y youngsters from all parts of the country seeking jo s in hitech companies, such cities came to e kno"n as IT hu s# The IT industry gre" at a galloping pace o!er the last decade, on an a!erage the gro"th rate of this industry "as .#-4 from /00- to /0--#/ 5ith IT$ se!eral other industries like real estate$ te(tile and hospitality flourished# Besides IT$ other forms of outsourcing usinesses also found their "ay into the gro"th story of India and the prospect of finding skilled as "ell as cheap la our or "hat many referred to as$ 6four heads at the price of one7 made India a popular outsourcing destination for "estern countries$ especially the US# Undou tedly$ IT has een critical to"ards India’s economic gro"th and de!elopment# 3o"e!er despite displaying such impressi!e gro"th figures$ the outsourcing industry has failed to achie!e sustaina ility, outsourcing has not only increased the economic ine'uality et"een the rich and the poor ut has also stunted India’s creati!ity and inno!ation# This paper "ill thro" light on some crucial aspects of the outsourcing industry that ha!e een ignored for se!eral years and no" need close e(amination and scrutiny y policymakers# The mirage of success has pre!ented many from analysing the disappointing truth that lies eneath and the need for policy change is more pressing than e!er# +olicy 8eforms to +romote Outsourcing The Indian go!ernment has undertaken se!eral policy initiati!es oth at the Central and the State le!el in order to sta ilise the outsourcing industry# The go!ernment also recei!es enormous support from ig corporations "ho ha!e !ested interests in outsourcing# At the Central le!el$ the agency "hich looks after outsourcing de!elopment is 9epartment of :lectronics and Information Technology$ 2inistry of Communications and Information
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Technology# It is mainly responsi le for formulation$ implementation and re!ie" of national policies in the field of IT and outsourcing# The 9epartment claims that it intends to make India a glo al IT superpo"er and a forerunner in the age of information re!olution ut the credi ility of these claims need to e !erified# According to 2c;insey$ the la our producti!ity of the modern sectors of the economy is only a out -<4 of the highest le!els of producti!ity glo ally#= In addition$ India’s efforts to upgrade indigenous technologies through imports are eing met y constant disappointment# +olicy initiati!es taken to address these issues are limited in scope and inefficient in implementation# A stu orn ureaucracy at the Central le!el makes e(ecution slo" and the pre!alence of corruption simply chokes the o!erall system# But efore analysing the policy inade'uacies and dra" acks related to outsourcing one must understand the asic policy measures taken y the go!ernment to promote outsourcing "hich are descri ed as follo"s# +olicy 8eform -: -..- 8eforms Until the -..0s$ the Indian >o!ernment had a socialist approach to"ards go!ernance ut in the "ake of the -..- financial crisis$ the go!ernment decided to open up the markets and undertake li eralisation, these reforms "ere recommended y the then %inance 2inister$ 9r# Su ramanian S"amy# 3o"e!er initially$ the go!ernment made a mistake in identifying India?s comparati!e ad!antage# In its effort to mo!e the Indian industry up the !alue added chain$ the go!ernment focused its efforts on IT hard"are and attempts "ere made to de!elop the hard"are sector ehind high tariff "alls# +ersonal computers and other IT products manufactured in India in the -.@0s and early -..0s "ere oth e(pensi!e and technically ack"ard$ "hich led to lo" demand# The soft"are and IT industry had its eginnings in the late -.@0s y !irtue of pri!ate companies like TCS and +atni "hich recei!ed no support from the go!ernment# 3o"e!er$ y the mid -..0s$ it "as clear that something !ery good "as going on in soft"are$ and that the scope for gro"th "as significant# The Indian pri!ate sector organi&ed itself into a dominating lo y called AASSCO2 "hich ultimately con!inced the go!ernment to lo"er tariffs on hard"are so that prices "ould come do"n# This lead to the hiatus of the local hard"are industry "hich opened doors to the spread of lo" cost imported hard"are$ "hich in turn sparked the IT re!olution# 3ence IT "as not a strategic mo!e of the go!ernment ut "as an accident# Though the initial pace of economic reform and uptake of IT "as slo"$ the country made huge profits# :ntrepreneurs flourished and India ecame the ne" fa!ourite destination for foreign in!estors especially in the outsourcing usiness# 5itnessing the rapid gro"th$ the go!ernment decided to introduce a series of reforms to facilitate outsourcing e(pansion in the entire nation# The Central >o!ernment started allo"ing duty free imports of capital goods and pro!ided ta( e(emption on e(port of IT ena led ser!ices# B Soft"are Technology +arks "ith state,of,the,art technology infrastructure and telecom facilities "ere set up "hich ser!ed as islands of producti!ity# These parks recei!ed special regulatory pri!ileges and could operate smoothly "ithout getting into cum ersome ureaucratic hassles# In addition$ a separate 2inistry of Information Technology "as set up to accelerate appro!al and implementation of IT projects and to streamline the regulatory process#
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+olicy 8eform /: The IT Bill in /000 In 2ay /000$ the Indian +arliament passed the IT ill to ring :commerce "ithin the pur!ie" of la" and accord punishment for cy er crime# 5ith the ne" IT la"$ India joined a and of -/ countries that ha!e cy er la"# After the IT la" "as passed$ the 2inistry of IT set up a Aational Centure %und to pro!ide seed capital to soft"are technology start ups# B The ne" reforms reduced licensing re'uirements and eased restrictions on in!estment# %urthermore$ measures "ere taken to deregulate the soft"are and IT market e!en further and make foreign technology more accessi le#
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+olicy 8eform =: Central and State le!el Incenti!es The Central go!ernment gi!es se!eral ta( reaks to promote IT in!estments in the country# %or instance$ a -0,year ta( holiday is applica le to !entures that de!elop$ operate andDor maintain in notified IT parks and special economic &ones )S:Es*# Similarly State go!ernments ha!e also taken significant steps to ad!ance IT gro"th# 2ost of the states in India ha!e Soft"are Technology +arks and the state go!ernments ha!e pro,acti!ely announced special incenti!es like re ates on cost of land$ concessions in po"er tariff$ re ates on stamp duty and special incenti!e packages for mega projects that re'uire o!er USF -0mn in in!estment# Outsourcing: Turning from Boon to Bane :!en though outsourcing is dri!ing the Indian economy$ o!er dependence on outsourcing has hindered progress in se!eral other important spheres# This can e clearly understood y comparing the gro"th indicators of the ser!ices sector$ the industrial sector and the agricultural sector# Compared to the ser!ices sector$ the other t"o sectors ha!e gro"n at snail’s pace o!er the last decade# %urthermore$ outsourcing has had an ad!erse influence on the educational system and inno!ati!e capacity of the country# Although there are more jo s due to outsourcing$ rich poor di!ide continues to roaden "hich is rather ironical#
14 12 10 8 6 4 2 0 -2 -4 -6 -8 -10 Ind"str$ !rowth(#) %er&ices !rowth(#) India's Real GDP Growth Rates (Factor Cost) !ric"lt"re Growth(#)

%igure -: The >ro"th 8ates of 9ifferent Sectors of the Indian :conomy
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:ducation One of the most crucial needs of any company is good human resource )38* ut Indian IT companies lack this !ery asic need# The 38 managers in most Indian IT companies try to find an easy "ay around "hile doing their jo , instead of doing some ground "ork and "orking hard to find deser!ing candidates$ they go to a !ery fe" engineering colleges ignoring a large chunk of other institutes right a"ay$ take considera le ri es from the college authorities$ impose illogical eligi ility criteria to filter out most of the students and finally take a fi!e minute inter!ie" of the eligi le candidates just for the sake of it# The reason "hy IT companies act o li!ious to these hiring fla"s is that e!ery year these companies target gigantic international outsourcing projects and to ag these contracts they need to sho" large headcount, to fulfil this need$ they focus on lind num ers instead of 'uality and fairness of hiring# %urthermore$ the rise in num er of IT companies has increased the demand for more engineers and this demand is follo"ed y the rise in the num er of educational institutes# %rom -.<G until -..<$ there "ere only =G deemed uni!ersities# This num er rose to -0= y %e ruary /00@# Bet"een 2arch -..< and 2arch /00@ nearly 100 applications "ere filed seeking deemed uni!ersity status# 1 But most of the deemed and pri!ate uni!ersities "ere founded in a jiffy and many of these uni!ersities ha!e du ious credentials# Students are attracted to these uni!ersities only ecause they feel assured to get placed in an IT firm upon graduation# Surprisingly$ the uni!ersities also pay !ulgar ri es to 38 managers of IT firms to make sure that their students get placed and the good reputation of the uni!ersity stays in place# But "here does all the money to ri e 38s come fromH The o !ious ans"er is through the high fees charged from students, the result of this is that$ only those "ith deep pockets are a le to afford to go these so called 6good7 uni!ersities and get stylish IT jo s# In fact$ small colleges "hich are not rich enough to ri e 38s arely get entertained y companies for on campus recruitments# There is another flip side to this, most of these deemed uni!ersities are run y people "ith an e(perience in politics# %or corrupt politicians a tightly regulated uni!ersity system is often ad!antageous# These uni!ersities collect ri es e!en for appointing faculty and re"arding good grades# Ignorant customers are lured into an am ush through ad!ertisements in ne"spapers and TC$ sophisticated flyers and rochures and the tudents "ho land up in these places often feel cheated "hen the output of their fees$ usually a reasona ly high amount$ is almost nil# This culture has se!erely affected the o!erall 'uality of higher education in India# Although India is reno"ned for its capacity to produce rilliant young graduates particularly in the engineering domain$ not many are a"are of the harsh reality that hides ehind this reputation, according to AASSCO2$ =<0$000 engineers emerge each year$ mostly from pri!ate colleges# Out of these$ /<4 are unemploya le "ithout further e(tensi!e training and half are simply unemploya le#< 2oreo!er out of //0 mn children going to school only /G mn graduate to the uni!ersity le!el i#e# only -/ percent students get an opportunity to go to college# One of the main reasons ehind high dropout num ers is the unreasona ly high cost of higher education and the fear of unemployment amongst students# This fear has de!eloped not as a result of high competition ut is a psychological impact that aseless hiring mechanisms ha!e created on the youth# The IT re!olution has also undermined the importance of core engineering disciplines like ci!il$ mechanical and chemical engineering# The Indian Institutes of Technology$ etter kno"n as IITs are "orld class institutes "hich churn out the rightest graduates in India,
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ho"e!er$ in recent years IIT graduates ha!e started preferring jo s in IT and consulting o!er engineering# 2illions of dollars are pumped into IITs y the go!ernment each year to produce 'uality engineers "ho can contri ute to"ards technology up gradation of the nation# But a majority are opting out of engineering# %or e(ample$ in /0-- only =<4 of all companies that !isited IIT 2adras to place students "ere core engineering companies, the remaining "ere IT$ %2C>$ consulting and anking# G Similarly in /0--$ less than =<4 of IIT Bom ay engineering graduates "ere placed in core engineering and research companies# The o jecti!e of 'uick money making has replaced passion and moti!ation#I 2oreo!er$ today youth has no inclination e!en to"ards pursuing fields like art$ music$ sports and science ecause of lack of jo s in these fields, the entire focus is on IT and outsourcing# The performance of Indian athletes at the Olympics has een far elo" a!erage: in /0-/$ India "on only G medals "hich can also e represented as - medal per /0G$.-<$=/G citi&ens# @ Besides sports$ art and music are also not cele rated professions in India# Some of the greatest Indian artists of all time died in po!erty ecause they recei!ed no support or monetary enefits from the go!ernment# 8esearch and Inno!ation Crushed The high demand for engineering graduates y IT companies prompted the rapid e(pansion of engineering education capacity ut !ery little emphasis "as laid on 'uality of education# As a result there is a plethora of engineers in the market ut !ery fe" ha!e ade'uate skills to face practical challenges in the professional arena# In addition$ the research output of Indian educational institutions is e(ceptionally lo"# India directs only 0#.4 of its >9+ to"ards 8J9 e(penditure# 9omestic 8J9 in!estment is considered to e one of the most critical inputs for inno!ation in any country ut in India the in!estment scenario looks leak: around I<,@04 of the domestic 8J9 is taken y the pu lic sector$ /0,/<4 y pri!ate enterprises and only =4 y uni!ersities# On the contrary$ the typical 8J9 e(penditure split up in O:C9 countries is as follo"s: G. 4 y pri!ate enterprises$ -@ 4 y uni!ersities$ -04 y go!ernment 8J9 la s and =4 non,profit institutions# . This pro!es the lo" confidence that pri!ate in!estors ha!e in the 8J9 potential of India# India’s record in the field of scientific pu lications is also poor# In /0-- Aature$ one of the most prestigious journals of science pu lished only - paper and . articles from India -0 "hich is an insignificant num er compared to other Asian countries# In addition$ 8J9 in India is mostly go!ernment funded and the direct in!ol!ement of the go!ernment in research gi!es rise to other pro lems# %or e(ample$ the go!ernment does not gi!e enough fle(i ility to organi&ations under its control and lays emphasis on procedural formalities o!er results# 3ence$ long decision cycles$ inefficient planning and su standard funding hamper the effecti!eness of go!ernment in!estments in 8J9#

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(# 20# P")lic sector Pri&ate sector *ni&ersities +(#

%igure /: Sector "ise 8J9 funding scenario in India
'# 10# 18# P")lic sector Pri&ate sector *ni&ersities ,on Pro-it sector 6.#

%igure =: Sector "ise 8J9 funding scenario in O:C9 countries Brain 9rain: Kuality not Kuantity Before the -..0s going a road "as afforda le only to the elite fe" ut after the -..- reforms a "orld of opportunities opened up and as the Indian economy de!eloped$ the middle class flourished and many young educated people from this section of society fle" a road to pursue greater opportunities# 9espite economic reforms rain drain continued since doing usiness in India "as not easy due to poor infrastructure$ technology ack"ardness and corruption# 3ence$ e!en as more jo s "ere created$ there "as a dearth of high paying "hite collar jo s to retain the educated and skilled "orkforce# It took almost a decade and the ad!ent of IT to make things fall in shape and make India a hotspot for multinational companies# %ollo"ing the ITDB+O onset$ youngsters started migrating to ig Indian cities instead of other countries and "ere satisfied "ith the fat checks they got y "orking at ITDB+O firms# 3o"e!er as positi!e as this may sound$ there "as a flip side to this trend# O"ing to the lack of a competiti!e and creati!e "ork en!ironment$ many smart Indians started looking for opportunities a road# The result "as that this time instead of numerous
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Indians migrating a road$ only a select fe" "ho could ha!e other"ise een an asset to the nation started seeking opportunities a road# ITDB+O firms promote mediocrity and outsourced "ork assignments do not pose the kind of intellectual challenges that smart people look for"ard to# 3ence$ in order to attain professional e(cellence$ many people are mo!ing out to countries like Singapore$ Canada$ 9u ai and USA# +eople "ith leadership skills and fresh ideas do not recei!e much credit at their "orkplace in India and those "ho are "illing to su ject themsel!es to a daily monotonous routine of clerical outsourced "ork are the ones "ho are appreciated# %urthermore ecause of poor research infrastructure$ high 'uality 8J9 cannot e carried out in la oratories# Indian la oratories do not encourage creati!e people to e(plore ne" frontiers of kno"ledge, instead the focus is mostly on educating the a!erage and not on encouraging the gifted "hich leads to mediocrity and the deterioration of the spirit of e(cellence# Ur an 2igration and the 8ich,+oor 9i!ide Industrialisation and outsourcing re!olution is a lessing for the ur an population ut the rural masses continue to suffer "ho constitute a major chunk of the Indian population$ nearly t"o thirds# 9e!elopment is restricted only to a fe" cities lea!ing ehind the !illages and small to"ns# The main occupation in rural India is farming ut e!en today Indian agriculture is grossly outdated# Irrigation is still rain dependant and e!en the slightest shift in "eather conditions can ha!e a profound impact on agricultural output# The ack"ardness of agriculture dri!es se!eral farmers to 'uit farming and migrate to cities in search of jo s# But circumstances in cities are too harsh for the poor and migrated farmers end up "ith lo" paying lue collar jo s, most migrants "ork as daily "age la ourers and earn so little that they can’t e!en afford three s'uare meals a day for the entire family# The "ages can e as lo" as F-#< per day )for @ to -0 hrs of la or*# Because of high rents and inflation of commodity prices$ most of these migrated indi!iduals or families end up li!ing illegally in slums# Slum d"ellers are po!erty stricken "ith no access to proper education and healthcare# The conditions are too hostile for children li!ing there "ho mostly end up eing malnourished and !ulnera le to a use# 5ith the rise of the ser!ices industry and the increase in the num er of lue collar jo s$ ur an migration has dramatically increased leading to o!er congestion of cities# The e(odus of masses into ig cities has lead to a space crunch and poor ur an planning makes matters "orse# The main pro lem that cities face today is transportation# As Indian cities ha!e gro"n in population$ they ha!e also spread out"ard and the lack of effecti!e planning has resulted in oisterous spra"led de!elopment e(panding rapidly in all directions$ far eyond old city oundaries into the distant countryside# That has greatly increased the num er and length of trips for most Indians$ forcing increasing reliance on motori&ed transport# This increase in road traffic has lead to an increase in the num er of traffic crashes, each year traffic crashes result in a out -0<000 deaths$ -#= million serious injuries )re'uiring hospital !isits*$ and around <#I million minor injuries#-- Ur an migration has ecome a pro lem not only for the poor ut the rich as "ell#

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Ta le: 8oad Traffic %atalities in India
Lear -..I -..@ -... /000 /00/00/ /00= /001 /00< /00G /00I %atalities II000 I.000 @/000 [email protected] @0.00 @10<. @11=0 .-=IG .@/<1 -0<I/< --1<.0 +opulation )million* .<< .I.@I -00/ -0/I -0<-0G@ -0@G --0= --/0 --=G %atalitiesDmillion persons @@/ @= I. I. @0 I. @1 @. .1 -0-

%uture of Outsourcing 8ecently a ill "as passed in the state of Ae" Mersey that allo"s only the citi&ens or legal non, Americans to e gi!en contracts# This legislation also affected some other states in the USA "hich ha!e started considering similar la"s and their implementation# This can ha!e serious conse'uences on the Indian economy "hich thri!es on outsourcing# %urthermore$ other Asian countries like +hilippines ha!e started ad!ancing in pro!iding IT ser!ices "hich are at par and sometimes e!en etter than the ser!ices offered y India# +hillipines has ecome the call center capital of the "orld "ith =<0$000 call center employees against India?s ==0$000 "orkforce# In addition$ according to the Business +rocessing Association of the +hilippines there are G00$000 %ilipinos in the B+O industry#-/ Stiff competition from other de!eloping countries and America’s reluctance to"ards offshoring pose a threat to the great Indian IT dream# Some researchers ha!e predicted that y /0-<$ =#= mn American jo s "orth F-=G n in "ages "ould e shipped offshore# -= 3ence$ in order to e self dependant$ the Indian economy needs to focus on inclusi!e gro"th rather than eing at the mercy of "estern companies# Solutions: Balancing IT "ith sustaina ility It’s a pity that despite ha!ing an economy "hich thri!es on IT$ a !ast majority of the Indian population doesn?t e!en kno" ho" to turn on a computer# The enefits of IT ha!e not een a le to reach the li!es of the rural masses for "hich IT is still an alien concept# A fe" corporations ha!e started these so called$ NICT )Information$ Communication and Technology* initiati!es’ as a part of their corporate social responsi ility to make rural people a"are of the enefits of technology and gi!e them access to internet ser!ices# 3o"e!er$ these projects are mostly in pilot stages and need massi!e scale up efforts in order to ha!e significant impact# :!en the go!ernment took measures to esta lish telecenters in rural areas in order to promote : go!ernance ut these measures ha!e not really succeeded# Oo" computer literacy and high costs are the reason attri uted to the failure of effecti!e ICT implementation# IT also poses a ne" threat to the ur an masses# O!er dependence on the ser!ices sector has "eakened the Indian economy in other critical spheres like industry and manufacturing# In order to offset these "eaknesses$ India needs to identify other strengths that can lead to inclusi!e de!elopment and e(cel in areas like agriculture and science#

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8ecommendation -: Strengthen :ducation and 8esearch India is a famous destination for off shoring ecause it pro!ides cheap ser!ice "orker ut in order to gain a competiti!e edge o!er other de!eloping nations "hich pro!ed cheap ser!ice "orkers$ India needs to produce "orkers capa le of handling more applied and specific challenges# :ach year many engineers graduate from Indian colleges ut out of those only a out /<4 are fit for specialised roles in industry, this is ecause of lack of e(posure and practical kno"ledge# In order to address this issue$ the current sylla us of higher education needs to e re!ised laying more emphasis on practical training o!er theoretical rigor# 2ore "eight should e placed on industrial training and project "ork and students should e encouraged to apply their kno"ledge to find creati!e pro lems to real societal pro lems# In addition$ other than eing only under the pur!ie" of Indian regulatory odies like U>C )Uni!ersity >rant Commission*$ policies should e introduced to encourage Indian uni!ersities to recei!e accreditation from international regulatory agencies like AB:T )Accreditation Board for :ngineering and Technology*# If uni!ersities recei!e incenti!es from the go!ernment to meet glo al standards in education and research$ then the state of affairs "ould e much etter# +olicymakers need to rainstorm ideas in order to attract more pri!ate in!estment in 8J9# 3a!ing an e(ceptional human resource "ill play a key role here and the most logical "ay of starting reform "ould e to impro!e education and training of the "ork force# 9i!ersity in disciplines should also e promoted to make sure that future professionals can address interdisciplinary pro lems as a team# %or e(ample$ Indian parents al"ays dream to see their children as doctors or engineers$ ut there are many other nota le professions like architecture$ economics$ and financial ser!ices$ that re'uire e'ual attention to propel India’s gro"th# A person should e gi!en the freedom to do "hat heDshe is passionate a out so that e(cellence is achie!ed and the education pays ack "hen needed# 8ecommendation /: Technology +enetration in 8ural Areas In order to make rural people tech sa!!y$ policies that promote science and technology education at the school le!el need to e implemented# %armers need to e enlightened a out the positi!e change that technology can ring into li!es# The Indian state of >ujarat has een proacti!e in adopting technology to impro!e the conditions in rural areas# >ujarat is a !ery ad!anced state "ith policies that promote oth ur an as "ell as rural de!elopment# The state agricultural gro"th rate )o!er the last fi!e years* is -/#@4 "hich is much higher than the national a!erage of /4# In this state there are more than .00000 internet users in the !illages$ thanks to the high speed road and connecti!ity in the rural areas# Adopting technology has made >ujarat so capa le and efficient that "ith only <4 population of the country$ it accounts for -G4 of industrial output and //4 of the country’s e(port# -1 India needs to mo ilise its masses in order to achie!e a similar gro"th trajectory# 5ith I< 4 of the population li!ing in rural areas de!elopment "ithout technology inter!ention "ill e a distant dream#

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16 14 12 10 8 6 4 2 0 India's Real GDP Growth Rates (#) G"/arat GDP Growth Rates (#)

%igure 1 : >ujarat’s >9+ gro"th rate !Ds India’s >9+ gro"th rate 8ecommendation =: Use IT as a tool for 9e!elopment India can use information technology to eradicate se!eral pro lems in rural areas# IT in the form of telemedicine can e used to impro!e access to healthcare# In India$ the magnitude of healthcare and nutrition pro lems is massi!e, 1/4 of Indian children elo" the age of three are malnourished compared to /@4 in Su Saharan Africa# :!en though the Indian >9+ gre" o!er -#< times from /00-,/00G$ the malnourishment num ers dropped only y -4# :ach year nearly -#I/ million children die in India efore the age of -# -<$-G$-I The reason ehind these shocking deaths is non a!aila ility of hospitals and clinics in rural areas, y using telemedicine this pro lem can e addressed and rural patients can reach out to doctors in distance cities !ia a computer interface# IT also needs to e integrated into go!ernment functioning, usually go!ernment "e sites are incomplete and outdated# Some "e sites ha!e not een updated for months or years# 8ecently the leading ne"spaper of India carried an article on @ "orst go!t "e sites that include$ Agricultural 2arketing Information Aet"ork$ :n!ironment 2inistry$ 9epartment of 3ealth and %amily 5elfare$ I8CTC#co#in )Ticketing "e site of the Indian 8ail"ays "hich is one of the "orld’s largest rail net"orks*$ BSAO )Aational Telecom Carrier*$ "e sites for passport processing etc# Sometimes these "e sites are intentionally maintained in sluggish "ays so that corruption can creep into the system "ithout the citi&ens’ kno"ledge# IT can also play a major role in ad!ancing the nation’s agricultural practices, most of the farmers in India still depend on ne"spapers or the radio for recei!ing "eather forecasts "hich are not that accurate# %urthermore$ since the ne"spaper and radio reports forecast "eather just a day or t"o from the current date$ farmers are una le to get enough information to plan their ne(t crop# Another major issue that farmers face is ina ility to find out the e(act selling price of farm produce in the market ecause of "hich farmers end up making losses y under!aluing their produce in the main market# %or e(ample$ recently farmers in +unja $ an Indian state dumped /00 tractor,full of potatoes on ecause selling potatoes "as not at all profita le# ;no"ing "hen and "hat to so" in the fields and ho" much to 'uote for the agricultural produce is critical to ensure profit making in farming, "ith the help of IT tools and internet connecti!ity$ farmers can find out a out the daily prices of agricultural products and keep track of long term "eather patterns#
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8ecommendation 1: Build Inno!ati!e Capacity 8J9 not only makes a country technically self reliant ut also increases scope for international colla oration and foreign in!estments# In India$ 8J9 is mainly run y the go!ernment "hich operates numerous inefficient la s# Talented people don?t take up positions at research la s ecause the research jo s are underpaid$ outdated and most importantly highly political and ureaucratic# 9ue to poor research output$ Indian uni!ersities stand no"here in the glo al rankings,according to the times higher education ranking$ only one Indian institute falls in the top 100 Uni!ersities’ list# India needs to uild a sound research en!ironment "here intellectuals get a chance to e(periment and create# If India "ants to compete "ith the "orld in 8J9$ the go!ernment run research "ill need more accounta ility as "ell as funding# Currently India spends only a out -4 of its entire >9+ on 8J9# 8ecommendation <: +romote :ntrepreneurs :ntrepreneurial gro"th is !ery important for any economy ut entrepreneurship ecomes particularly important in the conte(t of de!eloping nations# As the +resident of 8"anda rightly 'uoted$7 :ntrepreneurship is the surest "ay for a nation to meet its goals and to de!elop prosperity for the greatest num er of people#7 O!er the years Indian citi&ens ha!e spread out to different parts of "orld, esides sending money ack home to India they ring ack "ealth of kno"ledge a out technology and culture from a road# If India utilises their kno"ledge and gi!es them support to create startups an NIndian Silicon Calley’ can e esta lished in India# Besides encouraging the citi&ens "ho return from other countries e!en those ack home should also e encouraged to set up usinesses# Currently$ the process of starting a usiness in India is still !ery cum ersome and inefficient# 3o"e!er a lot of people ha!e started returning to India to start a usiness ecause the immigration rules in countries like the US and U; are tightening and raising seed funding is ecoming more challenging o"ing to the financial crisis# Canada and Singapore continue to e fa!ourite destinations for Indians ecause of the lenient immigration la"s and immense policy support for startups# Conclusion %rom the points discussed a o!e$ it is clear that the effect of outsourcing is not as great as it appears to e# 2ost of the outsourced jo s ha!e little scope for inno!ation# An employee doing an outsourced jo earns more than a doctor "orking at a pu lic hospital after medical school in India# 2ost college students are attracted y the money and many Indians ha!e stopped considering going to graduate school in order to take one of these jo s$ "hich is not a good strategy for long term career gro"th# As a result$ there is no dearth of people to endure the monotony of ne!er ending night shifts# On a personal le!el$ most of these outsourced jo s not only stifle creati!ity ut also distort "ork,life alance# 2any of the IT jo s in India are gi!en to engineering graduates from any discipline$ and they are trained for a ma(imum of four months, once the training ends they are called IT engineers$ ut they pro a ly graduated as electrical or aeronautical engineers# If one can ecome an IT engineer in just four months$ it’s 'uite o !ious that the "ork they do is mediocre and sometimes e!en "orse than mediocre, there is no specialisation or e(pert le!el training "hatsoe!er# Outsourcing helps nations gripped "ith po!erty y lifting the economy$ ut "hether it does so in the est possi le "ay is 'uestiona le# It’s crucial at this point to offset the dra" acks of
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outsourcing y implementing feasi le and effecti!e solutions especially catering to the lo" income and rural communities#

:ndnotes 6>lo alisation: The outsourcing and in sourcing issue7 Accessed Septem er /00.$ http:DD"""#ci!ili&ationsfuture#comD sund'uistDins#htmlP9:+TCO22# / 6Indian +lanning Commission 8eport7 Accessed Muly /0-/$ http:DDplanningcommission#nic#inDdataDcentralDinde(#phpHdataQcenta = T#;rishnan$ 6Can India Inno!ate7 1 6%rontline: Uni!ersity Business7 Accessed Septem er /00.$ http:DD"""#hinduonnet#comDflineDfl/G-1DstoriesD/00.0I-I/G-100100#htm < IT Industry Communi'uR for the Academia )AASSCO2*: IT 5orkforce 9e!elopment# Issue .$ Colume / April,Mune /00I G 6Campus +lacements: /0--,-/#7 Accessed August /0-/$ http:DDstudents#iitm#ac#inDthefifthestateD/0-/D0<Dcampus,placements,/0--,/0-/D I 6IIT B +lacements#7 Accessed August /0-/$ http:DDplacements#iit #ac#inDfilesDIITBS+lacementS8eportS/0--,-/#pdf @ 62edals per Capita#7 Accessed Septem er /0-/$ http:DD"""#medalspercapita#comD . 6India 9ept# of Science and Technology#7 8J9 maga&ine$ 9ecem er /00. -0 6/0-/ >lo al 8J9 %unding %orecasts#7 Accessed 9ecem er /0--$ http:DD"""#rdmag#comD%eatured,ArticlesD/0--D-/D/0-/,>lo al,89,%unding,%orecast,The, Asian,2achineD -9#2ohan$ 68oad Accidents in India#7 IA9$ 2arch =0 /00. -/ 6IB2 >lo al Business Ser!ices 8eport#7 Accessed Ao!em er /00.$ http:DD""",.=<#i m#comDser!icesDusDg sD usDpdfDg l0=00<,usen,00hr#pdf -= B#9ogra et al$ 6Strategic Outsourcing: Concept$ IT Outsourcing$ Sector Applications$ India Ad!antage7 -1 :conomist$ 6India?s >uangdong#7 Muly I$ /0--< Suresh Sharma$ 6Childhood 2orality and 3ealth in India#7 -G 8ieff 9a!id$ 6India’s 2alnutrition 9ilemma#7 Ae" Lork Times$ Octo er <$ /00. -I 8o inson Simon$ 6India’s 2edical :mergency#7 Time$ 2ay /1$ /00@
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