I moved to You Tube to look for speech clipping, here's excerpt from the latest anti outsourcing speech:
The problems have grown worse," Obama said. "Meanwhile, India is not waiting to revamp its economy. China is not waiting, These nations - they're not standing still. These nations aren't playing for second place. They are putting more emphasis on math and science. They're rebuilding their infrastructure. They're making serious investments in clean energy because they want those jobs."
Indian IT Industy which was in the process of recovering from the global recession. may get a setback from Obama's anti-outsourcing policy. Because India gets more than 60 per cent, or $70 billion, outsourcing work from the US because of low-cost locations. Obama took these decision beacuse thier unemployment rate reached in double figure. US Senate has allready voted for imposing strict conditions on hiring of people with people with H-1B visas by American companies receiving federal bailout money.
An embattled US President Obama, bruised by economic, political, and foreign policy crises in his first year in office, has pledged to stop US cos from taking jobs overseas and warned Americans about increasing competition from India. Obama addressed the issue of loss of jobs to foreign markets mainly India.
My Take on this:
I am no expert or critic but spending several years in stock market and watching rise and dip of market so closely ( which is my passion) I think I can use this platform to make a point.
Obama has several short-and long term pressure to cope with, but that doesnot mean that there will be any significant impact for the outsourcing Industry. The Proposed "Jobs Bill", which is aimed at creating more local employment in USA.
However there are short-sighted that many USA companies derive significant reveues from outside the country mainly from India. Some of the top outsourcing companies are Citigroup, GE, JP Morgan. These companies will create more jobs in India because of low cost operations. Citigroup generates 52% of its revenues outside the USA. Obama will only reduce tax soap to companies who will ship job to others places. But there are many others factors why USA MNC's prefare India to expand their business. When ever any companies is investing in India they sees the overall economics of the opportunity, market potential, availability skilled and preferably lower-cost workforce and the ability of time zone difference. So, Tax is only one of the several factors.
There are two Factors which will be faced by USA.
First, the changes to the US expense allocation rules may actually prompt some businesses to consider shifting certain US overhead costs overseas in order to prevent those expenses from being deferred on their US tax returns.
Second, just when US businesses need to find additional growth opportunities elsewhere to lower their reliance on a fatigued US customer, these rules will increase the cost of doing business overseas.
Clearly, this will make US firms less nimble against competitors based in countries with more favourable tax regimes.
So, Overall there will be very less effect of Obama's Policy on Anti-Outsourcing.
Let's hope the same!
|