The outsourcing clamour in the US refuses to die down. As the country braces for elections, the US President, Mr Barack Obama, warned of removal of tax sops for firms that ship jobs out of the US.
In his State of the Union Address on Tuesday, he called for bringing back jobs that have flown out of the US during the recession and increasing the taxes on the rich. While talking on revival of activity in the automobile industry, he asked the industry to revive manufacturing in the country in order to bring back jobs. The US had lost 80 lakh jobs in a span of a few months.
“If you are a business that wants to outsource jobs, you shouldn't get a tax deduction for doing it…..It is time to stop rewarding businesses that ship jobs overseas and start rewarding companies that create jobs right here in America. Send me these tax reforms and I will sign them right away,” he said.
Mr Obama's statement, however, did not ruffle those in the IT and ITES industry. The Nasscom President, Mr Som Mittal, felt that the US President's speech should not be seen in the context of software outsourcing. He felt that the move was to revitalise the US economy by building its manufacturing base and skills.
Assocham too felt that India could face this challenge. “The Indian industry has intrinsic strengths and will continue to be an attractive destination for foreign investments which create thousands of new jobs,” Mr D. S. Rawat, its Secretary-General, said.
Mr Phaneesh Murthy, CEO, iGate, said that the world's largest free market had started closing the doors after they were hit for the first time. “These are market forces at work,” he said.
(With inputs from Mumbai, Bangalore bureaus.)