Let me ask a question first.
What type of economic strength is preferable to India?
A)
A strong Indian economy fueled by its cheap labor due to a weaker rupee against dollar, where the Indians end up working in shifts, late nights, whole nights and what not... only doing low profile jobs which foreign companies want to offload toIndia, so that they can concentrate on high end works and become even better. For instance in IT field, providing BPO services, support and maintenance work for products...
OR
B)
A strong Indian economy fueled by its strong innovations and products, no matter whether the rupee is strong or weak against dollar.. where Indians work only in regular office hours of 9 to 6, developing cutting edge technologies and solutions,selling our world class products both inside and outside India. For instance in IT field, imagine operating systems, compilers, databases etc all coming out of India ..
I do not deny the fact that the IT boom in India came to a large extent because of (A). Well and good, we have had the benefits of our cost being cheap in western markets due to a weak rupee against dollar.. We have had our share because of this advantage in the past 2 decades..
But at the same time doesn't it make sense to move towards (B),instead of crying foul against rupee becoming stronger against dollar?
What a pity! Indian IT companies are feeling bad because rupee is becoming stronger against dollar! Reason, their profits will go down when the value of rupee is stronger, as every single dollar that comes into their account now means lesser rupee than earlier..(if for instance earlier they used to get 47 rupees for every dollar that comes in, but today its about 40!)
But isn't this a matter of celebration? Our rupee is gaining importance internationally and is becoming stronger again ..How many of us know that in 1947 when India got independence Rupee was 1.2 US dollars?
These Indian IT companies instead of relying on a weaker rupee for their profit should now look at coming out with innovative products and technical solutions. What have these companies done in the arena of core system products? Why don't we have any operating systems, compilers, database systems, development platforms etc coming out of India ? Why don't we develop tools like photoshop or flash? We have talent, but they all are working in American companies on these products...
Can't our Indian IT companies setup at least small teams to develop such products? Instead they are planning to make their employees work on saturdays too! So that their profits can increase due to extra hours the employees put in... As if India doesn't have any other option other than cheap labor, workaholic labor!! Are there no brains in India who can setup companies developing products and make money just by printing out more serial numbers and burning their product DVDs?
If Indian companies continue to depend on its weak currency, then how would Indian economy survive in a world where all currencies have equal value? Survival of the fittest... Only greater innovation can help us in that case... We need to have knowledge and technological advantage if India wants to become a superpower, not low cost based cheap labor advantage! Let the Chinese do it...
I hope that rupee becomes more and stronger so that Indians are forced to use their brains and come up with innovative products and next generation technologies, than to provide low end services... We need to create a situation where other countries line up to buy our F-16s, to buy our operating systems, to buy our mobile phones and I-pods, to buy our Boeing, to buy our Mercedes... "
A stronger rupee means we can easily afford foreign trips!"A stronger rupee means Indians can buy things anywhere in the world on par with developed economies! We don't have to spend crores of rupees then to buy a Boeing! We don't have to pay tens of thousands of rupees for international air travels! Astronger rupee means greater international exposure! There won't be a difference between buying a Maruti and buying a Mercedes! One can go on a trip to the Grand Canyon just like the way one goes to Ladakh or Nepal ! How do you thinkAmericans are able to tour all over the world? Because they earn more? No. But because their currency USD is stronger...
And this is where a strong rupee will lead us to! "I am not saying providing low end services are wrong... It gave us a very good start in the 90s. But that should definitelynot be the bread and butter fueling our economic boom indefinitely in the future... For the simple reason that it can't continue to do so any longer... other low cost destinations, cheaper than India are already coming up in the world... Let us moveahead... become more innovative... the journey has just started...
This is just the beginning of all the beginnings.
1 comment:
Hi Anjali
I am looking forward to a trip to grand canyon but for that rupee has to come down to 1947 level :)What you are saying may make an emotional sense but economy does not function like that. Nobody is stopping any Indian to develop products like photoshop etc.You can go ahead if you have an idea so how come the low level bpo jobs come into picture which by the way are giving instant jobs to millions of Indians .No developing country can compete with developed world on innovations so what is left is exports to these consumption hungry countries and strong rupee hits where it hurts most.It will take a long long mail to make picture clear but the fact is that at this point of time India cannot afford a strong rupee.It will also mean cheap imports thereby endangering existence of Indian companies and creating more jobless.And remember,china today has surpasses India even though it was nothing till late 70's because of cheap yuan and today it can build mega cities like shanghai,mega projects like elevated railways etc etc.But I hope what you say turns true and India does turn itself into what you perceive as soon even the software edge that India has is going to go away.We have to change the way we think and act to be able to compete US which i have no shame in saying are way ahead in all spheres...
they are born innovators and we are born politicians who have comments over everything but actions on none :)
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