Of late there has been a lot of hue and cry about the various so called protectionist policies enforced by the Obama administration. The most controversial ones include the heavy limitation of H-1B Visa holders for positions in companies utilizing the bailout funds and taking away tax sops on the companies that resort to outsourcing. But is it worth all the noise? Is it fine for our own Finance ministry to question and raise the issue of such policies at a time when their economy is doing worse than ours (comparatively)? Are we asking for too much?

Traditionally, Indian economy has been heavily dependent on IT outsourcing which in turn earns primarily from US firms kind enough to give them a chunk of their low level IT work. So when most of them have their neck deep into recession and debt, they would, beyond doubt resort to layoffs and cost cutting. And in any case, IT expenditure usually takes a hit and our firms start feeling the heat. Much like the Domino effect, any change or hit they take quickly affects our firms at home. So basically all the theory about our own economy being recession proof or de-coupled from the US economy is completely false as the backbone of the Indian economy is the IT outsourcing which itself is at the mercy of the US economy. So there you go- the connection; and the very reason why our Finance ministry boasts from time to time that we’re de-coupled and all that but also goes on to question the new changes in policy.

Let me pose a quick question here. When your own family members are starving, would you invite a guest or your neighbor to dinner? I guess not! Quite definitely your family comes first and you would pool in anything to save them first and only then attend to anyone else. Quite the case with the Obama administration as well, I would say. They are just trying to save American jobs at a time when the population is being laid off like crazy, increasing foreclosures and rising unemployment claims. If you happen to put the same analogy here, you would see how damaging outsourcing really has been. You can employ 4-5 Indians for the amount you might pay for one skilled American employee and there’re close to 500,000 Indians working in outsourcing firms. Not damaging enough? Is that not enough for them to shut their doors even temporarily to us who actually steal their jobs? Makes all the sense to me!

And what is all the big mess about the capping of US H-1B visas? For the benefit of those of us who do not know the finer details, let me just tell you that H-1B visa program was started for the benefit of American technology firms requiring talent not found locally. In other words, H-1B was initially started for companies like Microsoft, Google, Intel and the like. But the real beneficiaries of the program ended up being Indian companies like Infosys, TCS, and Wipro etc. What is the stark difference here? The H-1B was abused by these (mostly) Indian companies to further their own objectives and targets to strengthen outsourcing when the real parties used them judiciously in far lower numbers. If hard facts be put forward, Infosys and Wipro have received 4,559 and 2,678 H-1B visas each last year, while Microsoft was close to a 1307 and Google and Apple with just 207 and 70 visas each.

So what is so special about that? Both lead to loss of American jobs, one might be tempted to reason. The truth is that the difference is BIG. When companies like Google or Microsoft bring in their foreign staff, they usually stay there and work for quite some time before being sponsored for permanent residency- a road that usually leads to citizenship. The benefit here is that even though it is NOT the Americans who get the job, the taxes paid, patents filed and the expertise such foreign staff bring in usually works to the benefit of all parties involved- including the Government. It is perhaps on these lines that last year Bill Gates made his point that if the H-1B visa program be jeopardized, America’s status as a science and technology giant would soon come under question. Other noteworthy points in this regard are that whenever a company seeks to recruit through H-1B program, they’re not always required to prove the lack of local expertise for the position. They’re also required to pay the minimum wages, although most of the staff brought in by these American tech firms are paid more than just minimum wages!

Now, it’s not the same when an outsourcing company sends their staff overseas to client locations. Some say that it’s just a case of simple greed, but tech outsourcing firms are regularly known to under-pay their staff at client locations. Well, that is just the money. The real damage however, happens as most of the time these tech outsourcing companies send their staff to client locations and underpay them too. These employees learn tricks of the trade and then come back to India or their base country to do the same work thereby depriving the Americans of taxes and jobs. This might make a lot of sense to both the parties involve but definitely NOT the government, which still ends up bailing out companies and settles unemployment claims. And in light of the recent and ongoing economic downturn, this act does a lot of damage to a nation already on the brink of economic collapse. Now THAT should make sense as to why the lawmakers have made such a move.

Finally, why should we feel threatened or worried by all this? If our economy fails due to this Domino effect, it would show only carelessness and shortsightedness of ours. Why did we choose the easy path? Why did we choose service over innovation and products? Would it be fair of us to completely base our wellbeing on some other country’s economy? Can’t we do anything on our own? Why are we always dependent on some company for our survival? We’ve finally reached moon, but if putting our intellect to good use or even to save our own selves has been challenging of late, how effective are we? Above all, how SUCCESFUL are we?

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