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The Effects of outsourcing work on the Indian Economy



The buzzword in major Indian cities these days is BPO, otherwise known as business processing outsourcing. Business processing outsourcing is accredited for the growth in the economy, increased spending power in the middle classes and better lifestyles all round.


So what is Business Processing Outsourcing


Some time ago it occurred to the big companies that Indians work for a lot less money and they’re just as smart as workers back in the West – so why not save a pile of money by moving the work to India? Everyone from airlines needing people to punch in data to programs to companies needing hotshot programmers started coming to India and paying talented Indian workers luxurious salaries to perform the job in hand. This was where outsourcing work became ideal for all companies.


It helped that middle class Indians tend to speak good English and this gave rise in particular to the phenomenon of call centres outsourcing contracts to India. Thus every time someone in England wanted to file a travel insurance claim or question charges on their mobile phone bill they were directed to Bangalore to argue over the phone with someone called ‘Simon’ – though outside work he’d be known as Rajesh.


Indian workers in call centres have been ‘trained’ in Western culture, given cute English names and basically reply to each of the customer’s complains from a pre-prepared list of responses given to them by the company. Trouble was, their English wasn’t always up to scratch and it became so infuriating to get anything done on the phone that some English companies advertise as a selling point that they don’t outsource to India.


Call centres typically pay around 15,000 Indian rupees a month ($350) which is a decent wage in India and also saves the company a lot of cash. Although there’s very little opportunity for career advancement in these kinds of jobs, it did mean that a new generation of young Indians could start living consumer lifestyles, blowing their wages on discos and new clothes without needing any qualifications other than a nice accent. The fact that most of these workers lived at home meant that almost all their income became disposable, as well.


The business processing outsourcing culture means there seems to be a lot more cash floating around India these days but some doubt whether it actually reaches the greater part of the population through the trickle-down effect. The money is spent on good living and foreign hi-tech goods and so it’s unlikely that the average Indian individual has seen much improvement from the recent boost to the economy.


There’s also a whole other side to the business processing outsourcing culture which raises some interesting questions about what it means when a rich populations encounter poorer ones. The people working within business processing outsourcing in India are well off by Indian standards but the poor foreign exchange of the rupee to other currencies (48 rupees = $1) means that Indians can be employed to do all kinds of things that border on the unethical or just weird.


Consider the American student who can’t be bothered doing her essay on Emily Bronte because there’s a cool party on that night – for 20 bucks she can pay someone in India to write it for her. On the surface the transaction made seems to be a positive one, the essay will contain original material, the Indian writer makes a good wage and the student can go out and dance all night long with the peace of mind.


Or what about the Western gamers who can’t be bothered going through the first few levels of a new computer game as it isn’t challenging enough and want characters already built up for them – in return for their pocket money they can hire Indian gamers to play through the levels for them before handing over the controls.


These are just a few examples of the eventual extreme uses of outsourcing to India and other emerging economies. It should come as no surprise should we find that in 20 years time the option to send your suit to India for dry cleaning, to hire another to write thank you letters or to search for the cheapest laptop on sale, becomes as common place as outsourcing a website developer. The internet has made all these things possible as a new financial system based on unequal exchange rates has sprung up. Eventually the price of lunch will become the going rate to outsource some one in India to complete the office work that someone in Europe failed to do.


One might ask, is there anything wrong in that? Both parties are happy, at the end of the day it s a valid transaction, the worker is not exploited as the payment for outsourcing work meets the sustainable living standard of their home nation, and in some cases even goes beyond the that of the national average. One could argue that in this way the workers choosing to take on outsourcing tasks are themselves exploiting the exchange rates of their home currency. Some have even argued that this exchange of labour and time for capital, crosses the cultural boundaries that once defined both the worker and their foreign employer, even if it’s just ‘oh, hell, Sanjay – I wanted a warrior-monk on the third level of Monster Quest!’


When the Japanese first introduced the concept of outsourcing as an economic growth plan no one could foresee the scope and reach it would have in generations to come,. From the outsourcing of jobs in the automotive industry to the outsourcing of services and presently internet, computing and web based jobs, outsourcing has had a much detrimental effect than the business pundits and commercial owner would care to reveal or acknowledge both to the domestic and foreign nations. It may make economic sense but as we progress more and more into economies of service and servitude, the power of a strong currency leaves a funny taste in the mouth.


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