Everyone fails to understand - 1. If Rupee keeps on rising there are going to be massive lay offs. Whether people like it or not but most of the Indian junta is in IT industry. Already big companies like IBM, Microsoft, Accenture are looking at setting up offices in alternative countries. 2. Because of all these years of export boom, the overall housing market and in general prices have gone up. The average household credit has gone up. What if you lose your job and you are not able to pay the mortgage and your creditors. 3. The article mentions that this is time to plan your trip. But if you are without a job how are you going to pay for the trip. 4. The layoffs in export industry is going to have spiraling effect. Once export people start losing jobs, most of the other jobs are gone... 5. I work with clients in USA and already clients have started looking at other options including some african countries. They don't care whether they cannot speak english. They can always hire a manager in US who can speak both the languages. Don't be under the assumption that all the western world doesn't have an alternative because India is English speaking country.
At the end, I think this is just a temporary phase to control the pricing in India. India cannot compete with higher rupee rate in global economy.
RE:My thoughts
by Swarup on Jul 29, 2007 10:52 PM Permalink
Response: 1. Big IT firms are looking towards other countries because of shortage of trained labour in India - not cost. They can easily adjust wages to compensate the rise in rupee. India will not lose business due to this. 2. Exactly, that is called inflation. And that is the reason why RBI does not want to intervene. 3. You won't be without a job, but your salary may be reduced. 4. Hmm, if you read the story properly, experts are saying this will be the biggest inflation reducing factor. 5. I work in the US too, the western world do not come to India for love of India. The want result for a price they can pay, period. They will always look for an alternative. Indian IT industry should compete by qaulity, not cost alone.
Man! your last comment took by breath away. This is the mentality that keeps us behind.
RE:My thoughts
by Ameet Phadnis on Jul 29, 2007 11:06 PM Permalink
On your point 3 - Salary getting reduced. I live in Pune and I know the cost of living which has sky rocketed right now. The real estate market is just gone way up. But still some of these IT folks went ahead and purchased those expensive apartments. How do you expect them to pay their mortgages. Salary reduction and lay offs are bound to happen in the near future.
I think the last comment is not the mentality that is the FACT. Our economy is too tied to the GLOBAL ECONOMY. Can we sustain our growth if we do not get export orders. We won't be able to sustain if the global market collapses. Get Real....
RE:RE:My thoughts
by kshitij divakar on Aug 03, 2007 02:31 AM Permalink
Dear Mr. Please widen your eyes. At all the time India is better than any other country. Think again. Not emotionally quoted by me. Be it clear. Indian economy will definitely rise more than its thoughts. And note it It will go with the greatest fluctuations. See it here .......with me. Thanks
RE:My thoughts
by Seenu Subbu on Jul 29, 2007 10:55 PM Permalink
Right. We have products that sell in India and all across the globe. I mean, other than the 14 hour working Indian IT slaves.
RE:My thoughts
by Loan Shark on Jul 29, 2007 11:51 PM Permalink
you are right ... these IT companies make employees work long hours while showing them a carrot of on-site assignment.
The competition is fierce and so if you complain that you have a family life, you are considered to e "not a team player"
But, what do Indian programmers want ... code for dinner, code for sex. LOL
RE:My thoughts
by Confused on Jul 30, 2007 01:15 AM Permalink
layoffs it industry etc are the front, my common sense tells that if the currency is powerful country is powerfull i am waiting for the day when Rs. 1 = 40 dollars.That is possible if there is strong leadership to the country and the indians shed theirs habit of corruption and work hard...
RE:My thoughts
by Shantanu Bapat on Jul 30, 2007 03:39 AM Permalink
Layoffs will be enevitable if rupee keeps rising. Actually, I see INFY and other good firms putting in hiring freeze. They should then get rid of non-productive, those work life seekers and whiners. Bad times are good for company if they can tighten the belts. So lay offs will be good for economy. I pray that layoffs happen soon, my INFY stock will go up.
RE:My thoughts
by m ganesh on Aug 02, 2007 07:37 PM Permalink
I am worried about my future what if BPO's are closed?? Waht do i eat and survive with my family whatever happens the rupee rises or falls who cares?? We need jobs and government jobs are a rarity now with quotas for OBC's SC/ST, muslim quota, and consider quota for SC/ST in corporate companies also.
RE:My thoughts
by kshitij divakar on Aug 03, 2007 02:27 AM Permalink
Hey Man, Yaar ! Had Kar Di ? What are you thinking. A Talented person can earn everywhere in the world and the work will go on. If you have not taken still a loan then you can definitely surive everywhere in the world in India Also.
This appreciation of Rupee is seriously affecting the industry & individuals as well. When I sttarted working abroad in July 2006, it was Rs.46.02(my 1st salary exchange rate) and now after one year it is about Rs.40.20 a USD.I am loosing close to 14% of my salary. The employer is not going to compensate for this, I am not sure this apprecaition is doing any good to anyone.
RE:Rupee appreciation
by Loan Shark on Jul 29, 2007 11:27 PM Permalink
why do you care about exchange rate if you work in USA? Maybe you send fome a small amount every month to your parents/family, but your bigger expenses are still in USA.
Indians living in USA do not partcularly care about the exchange rate until they have to send money home.
RE:Rupee appreciation
by Cricket s on Jul 29, 2007 10:37 PM Permalink
great human value from you. Tell us what nationality you are and will tell you where and when you guys begged.
The IT companies are miffed not because of the rising rupee, but because of rising costs in terms of salaries. If the rising rupee was not accompanied by sky rocketing salaries and un-bearable attrition, I'm sure they would be easily making a bundle.
When the US faces employment crunch, they just import more labor. India is not in a position to do that (who wants to migrate to a third world country?). The real solution is to produce more of qualified professionals. When there is more supply of engineers, technicians, college graduates, etc the costs will be contained and the jobs maintained in the long run. The government should be going out of its way to attract FDI in the education sector, instead of indulging in shenanigans about 'not-for-profit' institutions and 'job reservation in private sector'.
RE:Real issue is rising cost of employment
by Cricket s on Jul 29, 2007 10:42 PM Permalink
Improve the infrastructure and Simply move the jobs from cities to smaller towns. This is already started happening in India
RE:Real issue is rising cost of employment
by Loan Shark on Jul 29, 2007 11:33 PM Permalink
rising salaries are due to competition ... for long Infosys and wipro types have paid less and attracted the best ... now the spectrum has widened and the "best" has choices including a better paycheck. These companies have made a killing, some time to see a cut in profit to survive in this competitive world.
US does not have employment crunch. They just want to cut costs. The result is that today US software companies like IBM and Accenture are competing with sambhar drooling, unshaven programmers from Infosys and Satyam.
RE:Real issue is rising cost of employment
by T D on Jul 30, 2007 12:33 AM Permalink
Rising salaries are due to a tight labor pool; would the IT companies be hiking their compensation if the number of available IT professionals was growing at the same rate as the number of jobs?
The unemployment rate in the US is 4.5%, which is considered pretty tight. During the dot com boom, the rate was at 4%. Traditionally, the Fed expects the unemployment rate to be at or above 5%. Bernanke's reasons for not bringing down the interest rates are mostly about inflation fears driven by high capacity utilization in the labor pool aka tight labor market. Besides, Bil Gates wouldn't be testifying before the Congress to increase H1-B quota's if their only consideration is to cut labor cost, since labor in India is still cheaper than the U.S.
On the other hand, while the Indian Rupee appreciated by more than 10% in less than 6 months, the Chinese Yuan has appreciated by much less than 10% in over 2 years. One of the reasons, is that China has not really faced as bad inflation as India (they do have inflationary pressures, but it simply isn't as bad as what India faced early this year). One reason is that China has been able to supply ample amount of unskilled and in-experienced labor. Where they face labor shortage, they have seen jobs moving to other countries such as Vietnam.
Since India targets the higher end of the labor outsourcing market, it needs to constantly churn out well qualified labor. If India has to maintain its comparative advantage in this arena, it needs to
RE:RE:Real issue is rising cost of employment
by T D on Jul 30, 2007 12:50 AM Permalink
[continuing from my previous post due to char lmit ...]
If India has to maintain its comparative advantage in this arena, it needs to invest heavily in the education sector. We need to have a institution of the caliber of IIT/IIM in every state, each churning out far more students that what an IIT/IIM does today. Surely, the govt on its own will not be able to achieve it and we should endeavor to attract FDI from reputed Western universities, even if it is a for-profit endeavor.
In the long run, India is going to depend on imports to a significant degree, given our huge population and limited natural resources (India is roughly 11 times as dense as the US.) We are going to depend on the rest of the world for energy, food (see how we had to curb some food exports during the recent run in inflation? these are just signs of the times to come), industrial raw materials, machinery, you name it. The Indian Rupee cannot continue to be cheap. This means that our exporters will get hammered, if they cannot contain their costs. Either the exporters will need to move up the value chain (which requires a smarter labor pool) or they need an ample supply of skilled labor. Either way it is going to be crucial for India to generate massive amounts of skilled labor.
Surely, there is no escaping from FDI in the education sector, for the good of the nation.
US dollar is falling because of US trasury department's weak dollar policy since the departure of Paul O'Neil in Bush's first term. Both Snow and now Polson have favored weak US$ to bring US economy back on track and they have been successful.
Despite higher oil prices, inflation is still tame and under control as Federal Reserve Board says. So, USA does not have to raise interest rates unlike they are doing in UK and Euro countries. This makes dollar less attractive to investors and the value falls.
This makes US companies operating in foreign markets more profitable and US attractive to tourists. It's a win-win situation for US.
You will see that Japan and China still trade at the same multiple with $ - just two other smart big economies with monetary policies like the US.
RE:Driver of rise
by Cricket s on Jul 29, 2007 10:46 PM Permalink
engineers in India cannot understand basic economics. Economics, Accounting and Marketing should be made part of Science and Engineering degrees. These days it is so necessary to know these things.
If USD depreciates further and Gulf salaries are as such getting reduced in the name of localisation. A serious calculation found that if USD depreciates to INR 30 then all the Gulf workers will be returning back and India the growing(so called) does not provide any opportunity or envisaged any plans for such a scenario. Think Big
Lot of debate and articles going around about rupee rise and the consequences of the same. But it looks like one point is being missed consistently about the effect it has on those Indian who are working outside India. Apart from those settled in developed countries, there are thousands of Indian who are working in countries like Gulf and Africa and their families back home completely dependent on the money they send. Majority of them are earning in dollars and due to rupee rise, the conversion money they get is reduced and this is definitely affecting their life. No overseas business man is going to increase Indians pay just because dollar value in terms of rupees has reduced. No one really is mentioning a point about this problem. It is also possible that in long run high value of rupee may be beneficial for those who save money but for those who earn their daily bread from the money sent from abroad, it is a different matter all together at least for the time being.
RE:Rupee rise
by lalit gupta on Jul 30, 2007 12:27 PM Permalink
If you know it is 22 billion dollar a year remitted per year. It is big if you know what is total earnings in export and imports. In Gulf people dont spend money on luxories. They try to save as much as so later it can help them in India or to their relatives. If these guys come back then you loose 22Bn USD and no growth in Indian economy.
RE:Rupee rise
by Swarup on Jul 29, 2007 11:07 PM Permalink
This precisely is the reason for inflation in India, which the RBI is trying to curb. And you think this is missed?
A significant benefit that I am observing on this front is that the domestic oil companies are better able to absorb the shock of the increasing crude oil prices. They have to give up less in terms of Rupees when they pay in dollar terms for a barrel of oil.
We all know how important it is to control oil prices to keep a tab on inflation.
