Time to Push Standards.

India reaching for a 2 figure growth in couple of years can be credited to the growing Outsourcing business in India. Big software Companies and BPO's are now heading towards becoming the backbone of economy. When Silicon Valley collapsed during late nineties, many had perceived that the golden era of software business has come to an end, but to the contrary the software business regained the hold on the same foot (only shoes changed) and is growing as ever. In the early part of the century this growth was further boosted by stepping in of BPOs in India, and to this day these industries account for maximum overseas revenue (cumulatively).

But! (This small 3 letter word)

Recent slump in American Economy has affected the outsourcing business in such a way that, these so called soft majors are now feeling trouble to give away salaries to their employees. Was it just the fall in dollar, that has affected there business? Or it was some thing more to it?

Definitely dollar crash has resulted into diminished revenues, no doubt about it. But (again this small 3 letter word) apart from this, has it not been the Overlooked vulnerability of tertiary sector, that has tipped this slump. More to add the companies are looking forward to sustain there profits by Work force reduction but! (Again this small 3 letter word) again do you think this is the only solution.

If we go to the root of the problem it is evident that basic concepts of development were ignored while planning the economic growth of the country. Services sector boom should have been in harmony with agriculture and Industries sector. Recent years, if we see had witnessed a number of acquisitions of majors by SME’s. There was no one talking about taking steps to support such industries which could be an alternative route to flourish our forex reserves. This is mere one example of shortsightedness of our policy makers. The FII’s queuing up to finance the projects instills that they have faith in the growing companies, but the stringent norms, which are more hectic than secure, have surfaced a fake mechanism to bring in their money( P notes). SEBI also finds it difficult to put a check on this practice, despite liberalizing there norms for FII’s to Route money. Proof is Institutional buying trends in case of IPO’s (recent reliance power).

You must be wondering, has the topic that was discussed earlier have missed its path? And, to that, I would say no… never! Because we find a thread that links all these problems and the solution to this is also the basic one. We should be clearly thinking of improving the standards, in framing policies, in creating better products (both tangible and Intangible), so that we are undeterred from the path of becoming fastest growing Economies and equally competitive.