US ban on outsourcing projects: CM seeks Centres help

Hyderabad, Sept 10 (INN): Chief Minister K Rosaiah expressed surprise over the decision of the Ohio State Government, US, to ban the outsourcing of Government information technology and back-office projects to locations such as India as it seeks to combat unemployment which is nearing 10 per cent across the United States. He was reacting to the decision announced by the Ohio State Government the other day and also the speech of US president Barack Obama indicating that incentives to companies outsourcing the IT projects would be withdrawn.

The Chief Minister observed that more than half of the worlds top 500 companies outsource work to India, which has become the worlds back office, where western firms have set up call centres and number-crunching and software development outlets to cut costs. 'Particularly, Andhra Pradesh in recent years has become an IT hub providing employment to more than two lakh employees in various Indian and multinational companies. Any hasty decision on US side to ban outsourcing would be detrimental to the interests of all our IT qualified graduates,' the Chief Minister expressed apprehensions.

In the light of decision of the Ohio State Government and US President Obamas remarks, the Chief Minister today discussed with the IT Advisor CS Rao the possible negative impact of the same on the IT sector in Andhra Pradesh. He addressed letters to the Union External Affairs SM Krishna, Union Commerce and Industries Minister Ananda Sharma and Union Information Technology and Communications Minister A Raja. The essence of Mr Rosaiah letter to the Union Ministers is: 'I write this letter with a deep sense of concern over the state of Ohio, US, banning outsourcing of Government work to other countries and US President Barack Obama proposing to deny tax concessions to businesses creating jobs outside and not within the US.

'It is ironical that a State in the US, which has always advocated free markets and competition, is opposing outsourcing at a time when more and more countries are opening up their markets for competition. Raising invisible trade barriers on the eve of His Excellency President Barack Obamas visit to India in November 2010 does not augur well for relations between the two greatest democracies on the planet. Andhra Pradesh has grown into an IT hub, providing employment to tens of thousands of young and educated engineers and other graduates.

'The Ohio ban seems to be a precursor to more and more States in the US falling in line. President Barack Obamas latest statement endorses the same. At a time the bilateral trade and business relations between India and the US are likely to deepen and widen in the wake of the civil nuclear cooperation agreement between the two nations, the anti-outsourcing plans are jarring. May I request you to take up the issue at appropriate fora and ensure that the Indian IT industry and people do not suffer.'