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 A
few years ago a job in India was considered to be a prelude to a
lucrative job in the US. However, as NRIs and other foreign nationals
flock to the country to be a part of the IT industry here, India
is now being fast considered the land of opportunities, says Prashant
Govil
The last two years have been truly amazing in
terms of demonstrating what India can expect in coming years. There
is a growing global realisation that the Indian software industry
has reached its final leg of development—and that it is poised
to emerge as a major high-tech hub. As per recent Nasscom figures,
over 35,000 Indian IT workers returned to their native soil since
9/11—almost 10 percent of the current Indian IT workforce in
the US!
Why is everyone flocking back?
With the anti-outsourcing winds in the US it should
actually have been the opposite! A more closer examination of the
facts reveals the reasons for this seeming “anomaly.”
First and foremost is of course the job market
in Western markets. Ever since the downturn in the US economy, H1-B
visa holders (and even green card holders) have become an endangered
species. The bursting of the dotcom bubble was quickly followed
by a seemingly never-ending series of accounting scandals and 9/11,
a situation which ensures that cost-cutting, realistic salary levels,
heightened security concerns will be call of the day for many years
to come for the entire US industry (and in a way the entire civilised
Western world). What this actually translates into is more jobs
for “Indians in India” i.e. Indians working for US-based
MNCs but providing their services from cheaper Indian shores.
To also quote a colleague who recently came back
to India to work for Tata Consultancy Services after completing
his management studies in Australia, “My professors in business
school literally said anyone who even thinks about quitting a software
job in India and going to the US/Europe can only be considered a
fool. My professors/colleagues were fully convinced that India was
the place to be if you wanted to make a career in information technology.”
Standard of living
The second reason for this “reverse”
brain drain is a mix of factors—the current standard of living
in the country now, the inflation rate and the growing strength
of the Indian rupee.
I have never imagined in my wildest dreams a situation
would come wherein a person would opt to move to India because he
could have a better standard of living. In PPP-weighted terms, it
is now definitely realistic to expect an Indian salary that is comparable
if not superior to the US salary. PPP is Purchasing Power Parity,
an indicator of the real conversion factor you should use when comparing
dollar salaries and rupee salaries. Currently the PPP is around
six, that is, a salary of Rs 6 lakh in India is equivalent to a
salary of one lakh dollars in the US. Fresh graduates in the US
can hope to get not more then $40,000 as a starting salary wherein
the corresponding figure in India i.e. Rs 2.4 lakh is no problem
whatsoever.
Moreover, there is also the inflation rate and
growing strength of the rupee to consider as well. After depreciating
steadily against the US dollar (from Rs 31.37 in 1991 to Rs 49.07
to the dollar in 2001), the rupee has now been steadily appreciating
against the dollar, and is now at almost Rs 47 to the dollar.
Also, the inflation rate in India has been hovering
at between 2 percent and 4 percent per year for the past several
years. With salaries increasing at a much faster rate (especially
in the software sector), the real incomes have thus been increasing
at a very healthy rate for the past few years.
How does it help the country?
This return of the “prodigal” sons and
daughters only augers well for the country. As they return they
are bring back huge volumes of business with them. Some of these
NRIs having worked and studied in the US for 10 plus years are highly
skilled in niche and cutting-edge products and technologies.
The MNCs they were working for are more then happy
to shift some of the high-technology work to low-cost development
centres in India. IBM, SUN, Microsoft, Intel, Oracle, HP, CISCO
and Dell are a few examples of large corporations ramping up their
India development centres with the help of these returnees.
Other then this, those returning also bring with
them admirable “lists of contacts” .As these NRIs go to
work for companies like TCS, Wipro, Infosys or start their own firms
they are able to admirably leverage these contacts and their understanding
of Western business to push work to Indian companies.
The only thorn in this otherwise rosy scene is
none other then our famous (infamous?) government itself.
Recently the finance minister announced a new
taxation rule which basically states that for NRIs returning to
India any income they accrue abroad (including even Retire-ment/Pension
Account income) will now be fully liable to Indian taxation from
the year of their return. From now on, software professionals returning
from the US to India will have to think twice: they would be liable
for tax of approximately 33 percent on any savings they have there!
Not only are the “sons of the soil”
returning, there is also a growing realisation among foreign nationals
that as far as the information technology sector is concerned India
is “the place” to be. Companies like TCS, Infosys, Wipro
are increasingly receiving resumes from foreign university graduates
for jobs and internships. In TCS itself I have interacted with company
employees from Sweden, Finland, Hungary, USA, UK, Japan, China,
Korea and other countries who proudly call themselves “Tata”
employees!
This is a win-win situation for all and with the
government, NRIs and industry working together, we Indians have
delivered the world’s second fastest growing economy for the
past couple of years. The future can only be better, not worse.
(Prashant Govil is a Business Analyst with
TCS. The views expressed are personal.)
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