The Hindu : India is on the rise: <I>BusinessWeek </I>

Online edition of India's National Newspaper
Tuesday, Dec 02, 2003

Business

Business

India is on the rise: BusinessWeek

NEW YORK DEC.1. India and its millions of engineering graduates are being enmeshed in America's New Economy quietly, but with breathtaking speed, according to BusinessWeek.

The New York-based news magazine, in a laudatory cover story, has said that new roads, schools and jobs are blowing fresh hope in India's economy.

"India has always had brilliant, educated people,'' the four-part story quoted tech-trend forecaster, Paul Saffo of the Institute for the Future, based in Menlo Park, California, as saying. "Now Indians are taking the lead in colonising cyberspace.''

China at one time drove down costs in manufacturing and Wal-Mart Stores in retail. India may — in some cases already — depress costs in the services sector. "What happened in manufacturing is happening in services'' said Azim H. Premji, Chairman of Wipro. "That raises a lot of social issues for the U.S.'' By some estimates, there are more IT engineers in Bangalore (150,000) than in Silicon Valley (120,000). About one-third of new IT development work for big U.S. companies is done overseas, with India taking the lion's share, the weekly said in its December 8 issue, the latest available on newsstands.

Despite last month's move by Indiana, a Midwestern state in the U.S., which cancelled a $15 million IT contract with the Tatas, other States are increasingly using India to manage everything from accounting to food-stamp programmes. Even the U.S. Postal Service is considering taking work there. These moves are expected to have a positive effect on the U.S.

"Harnessing Indian brainpower will greatly boost American tech and services leadership by filling a big projected shortfall in skilled labour,'' the magazine said, with the cover story titled "The Rise of India.''

American companies outsourcing to India pay about $10,000 a year to a top engineering graduate from any IIT. "Outsourcing work will spur innovation, job creation, and dramatic increases in productivity that will be passed on to the consumer,'' Rajat Gupta, an IIT-Delhi graduate and senior partner at consulting firm McKinsey and Co, said.

By 2008, McKinsey forecast, IT services and back-office work in India will swell fivefold, to a $57 billion annual export industry employing four million people and accounting for 7 per cent of India's GDP. That growth is inspiring more of the best and brightest to stay home rather than migrate.

This year about 20,000 tax returns of Americans were prepared in India and the number is expected to go up to 200,000 next year.

The magazine warned that the country's transformation is still a work in progress. The problems of illiteracy, poor infrastructure and bad governance persist.

But the commentative piece concludes the cover story by citing the Indian people's newly acquired self-confidence.

The Business Week story follows similar adulatory reports on the Indian technology sector in other leading American magazines such as the Fortune. — UNI

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