KOCHI: Over 100 legislations pending in various States in the U.S., seeking to ban outsourcing public contracts, increasing domestic political interference against IT & IT-enabled services coupled with redtapism and bureaucratic hurdles have marred the brightening prospects of Business Process Outsourcing Industry in India, according to a paper on Challenges of the Indian ITES sector, brought out by the BPO Council of Assocham.

The paper said that the growing competition emerging from countries in Europe and Japan has already put huge pressures on the bottom lines of the BPO industries with their lower cost. The proposed legislative attempts by the U.S. seeking to ban outsourcing their jobs to countries like India would further harm and restrict the growing prospects of the Indian Business Process Outsourcing industry.

According to the paper, over 100 legislations pending in the U.S. against outsourcing their jobs with an argument that their enactment will create employment opportunities there will have a huge backlash towards the Business Process Outsourcing Industry in India and ruin the growth of the rising BPO Industry. In view of Assocham, this perception, which is increasingly gaining ground in the U.S., will spread in the economies in other trading blocks and put heavy pressures on companies that intend to outsource some of their requirements to developing economies and restrict the expansion of domestic BPO Industry.

The paper also highlights the fact that the sunrise BPO Industry will be in for trouble because of excessive domestic political interference which is targeted for political gains against the industry. A case in point, according to the paper, is the recent opposition to land acquisition by a BPO company in Bangalore and the demand for additional jobs for local population. Similarly, Haryana, in the recent past, restricted some ITE firms from deploying women workers in night shifts citing security concerns.

The Chamber paper points out that if the policy is strictly enforced by Haryana, it might significantly impact the capabilities of the companies in the short-term. Another issue which will adversely affect the industry is the attempt to form employees unions in IT and BPO sectors. The Left parties have made demands to give IT - ITEs workers the right to strike. An industry which works on a 24 x 7 and real-time basis, a few strikes can ruin the reputation of the entire industry, argues the paper.

Redtapism and bureaucratic hurdles too are often noticed against IT and BPO sectors particularly when these are seeking to expand their operations and set up new centres.

Acquisition of large tracts of land requires considerable liaison with the Government and even after the land is acquired, there are possibilities of significant delays.

The bureaucracy generally is not found adequately supportive and cooperative whenever IT and BPO industry seeks expansion and their enlargement as well, says the paper.

Similarly, growing regionalism against the IT and IT-enabled services has also been noticed.

The local population of major cities like Mumbai and Bangalore have started demanding that the companies give them preference in jobs even though they might not be suited for them.

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