US Outsourcing Ban: CM Worried

Chief Minister K Rosaiah expressed surprise over the decision of the Ohio State Government to ban the outsourcing of government information technology and back-office projects to locations such as India as it seeks to combat unemployment which is nearing 10% across the United States.

He was reacting to the decision announced by the Ohio State Government a few days back, and also to the speech of US president Barack Obama that indicated that incentives to companies outsourcing IT projects would be withdrawn.

The Chief Minister observed that more than half of the world's top 500 companies outsource work to India, which has become the world's back office, while western firms have set up call centres and number-crunching and software development outlets to cut costs.

"Particularly, Andhra Pradesh, in recent years, has become an IT hub, providing employment to more than 2 lakh employees in various Indian and multinational companies. Any hasty decision by the US to ban outsourcing would be detrimental to the interests of all our IT-qualified graduates," the Chief Minister expressed.

In the light of the decision of the the Ohio State Government and US President Obama's remarks, the Chief Minister discussed with the IT Advisor C S Rao the possible negative impact of the same on the IT sector in Andhra Pradesh.

He addressed letters to the Union External Affairs S M Krishna, Union Commerce and Industries Minister Ananda Sharma, and Union Information Technology and Communications Minister A Raja.

The essence of Rosaiah's letter's is as follows:

"I write this letter with a deep sense of concern over the state of Ohio, US, banning outsourcing of Government work to other countries and US President Barack Obama proposing to deny tax concessions to businesses creating jobs outside and not within the US.

"It is ironical that a State in the US, which has always advocated free markets and competition, is opposing outsourcing at a time when more and more countries are opening up their markets for competition.

"Raising invisible trade barriers on the eve of His Excellency President Barack Obama's visit to India in November 2010 does not augur well for relations between the two greatest democracies on the planet. Andhra Pradesh has grown into an IT hub, providing employment to tens of thousands of young and educated engineers and other graduates.

"The Ohio ban seems to be a precursor to more and more States in the US falling in line. President Barack Obama's latest statement endorses the same. At a time when the bilateral trade and business relations between India and the US are likely to deepen and widen in the wake of the civil nuclear cooperation agreement between the two nations, the anti-outsourcing plans are jarring.

"May I request you to take up the issue at appropriate fora and ensure that the Indian IT industry and people do not suffer."

Courtesy: INN