I don't know how a business school Dean can say things like this, as it is logically incorrect. For example, the japanese carnakers did change the strategy and infact initially they did incur some loss in profit during appreciation of yen. The point is, the two sectors are poles apart - IT and Automobiles. for example, a consumer will buy a car not based on cost but based on quality, reliability, engineering, gas(petrol) economy etc. on the other hand, the entire IT industry works just based on difference in currency, the moment the Re becomes stronger, the Call center profits will go down, no longer the IT BPO will get outsourced jobs. It will definitely have a domino effect, the salaries of the IT, Call center workers will go down, naturally calling for a low currency floatation in the market accounting for a sudden stop in the growth of the economy...again causing a depreciation of the rupee. However, then the scenario will be different, in the meantime, the outsourcing jobs would probably move to other countries such as malaysia, thailand, vietnam, etc. And because of that the chances that after the depreciation of rupee India will get its jobs back are miniscule. The exporters do have to worry about the strong rupee, cause they can not ask the importers to pay more for the products which can otherwise be bought from neighboring countries such as bangladesh, pakistan, sri lanka, etc.
So in short the STRONG RUPEE will have DEVASTATING EFFECT on INDIAN ECONOMY!!
RE:The Strong rupee is a concern
by prasanna prasanna on Oct 03, 2007 10:38 PM Permalink
until unless we are selling our body (body shopping) instead of selling our brain with innovative product we will not grow. if we carried out same ethic in raising indian economy it will not sustain. for ur info IT and BPO is not just indian economy. ask any It company do they own any copy right of the software. its all in the hand of american company. those guys can make money anytime with same vesrions of software and minimum amout of employees. what prof saying is come out with innovative solutions so u can rupee 1 to a $. may be initially all software companies will ask u to work on sat. So till selling body (body shopping) and Prostitution there is no difference. u will be sold till ur young.
RE:The Strong rupee is a concern
by Pradipta Bhattacharya on Oct 03, 2007 11:09 PM Permalink
Agreed ... Strong Rupee is defnitely needed for a long term sustainable growth and whether IT/ITES companies benefit or suffer for that is immeterial. But, the fact is the current Rupee strength is dependent to a large extent on the Dollar Earnings of the IT/ITES sector.
Again agreed that these are not all of Indian Economy .. there is a much larger segment of the economy where we do not sell bodies / nor earn by postitution.
But its not clear what is the option that you are proposing to replace the IT/ITES earnings? If you do not have any .. then just shut-up. BTW : I work in the IT sector - if that means anything to your argument.
RE:The Strong rupee is a concern
by N.P.Sharma on Oct 04, 2007 12:06 AM Permalink
Dear Friend
1. We get salaries to meet expenditure . 2. Salary of people serving in Govt. like MBBS doctors are good enough to meet dead means. 3. If rupee is strong import of crude oil will cost less thus lesser inflation . 4. Thus there will be a need for lesser salary . 5. Do we need to pay BPO industry chaps as high as an Doctor . 6. Every friday 80% of crowd drinks belonges to BPO . Is it ok ...If not try visit to costly bars where a beer will cost 175 to 300/- rupee which cost 40 /- rupee on shop. A raw chicken which is sold for 60/- form poultry farm is bein sold at 350-450 in these restraunts after cooking. Does it make sense.
There is a need to pay salaries comparative , Price control of essential commodities thus reducing inflation , not by weakening currency.
RE:The Strong rupee is a concern
by AJITH BHATT on Oct 04, 2007 08:48 PM Permalink
You are right Sharmaji,Bangalore was much less costlier before this IT Guys and Call-Centre Guys came here,most these guys does not know the value of the money, and most of them does not have any saving habit but only spending habits.
These silly people expect that they will getting fantastic salary hikes during their life time, due to their spending habits they are making other middle-class and poor peoples life miserable in Bangalore.
RE:The Strong rupee is a concern
by Rebel on Oct 03, 2007 10:36 PM Permalink
Thats your view point ....might be because you are working in an overpaid IT Industry ......
Why not just devalue the currency as done in Zimbabwe ????? say for 1$ = Rs 1000 .
That might show an excellent Top line as well as Bottom line growth for the IT /ITES sector ....
